1. Don’t force trades.
As a trader we spent a lot of time trying to identify a trade that will make our day/week/month, but it is important to remember that we can’t force any trade to materialize.
When you focus too much on something to happen, it is very easy for our brain to deceive us into believing that we are seeing what we wanted to see.
Our advise is for you to relax and trust your initial plan and let the market show you its hand – it definitely will and then there will be a lot of opportunities that you can predict, thus always save your ammunition for those moments.
2. Pick your battle
There are a lot of counters in Market, some are easy to trade but they might not be very profitable and then there are some volatile market which require more experience and skills but in return they offer tremendous opportunity and outstanding returns.
As a trader that is the dilemma we are exposed to – the best trader finds the right balance between profitability and risk, calm trading and nerve wrecking trade.
It doesn’t mean as a trader you need to enter all the counters or trade everyday – slowly figure your strength and weakness and pick trades according to your appetite.
3. Tune out of News
Remember – stick to your plan. Once you have trades on, you have got to learn to let go and let your trades work for you. You must give them a chance to do so without letting short-term variations in your profit and loss get to you.
Personally, it’s one of the reasons why I never pay attention to news, and in terms of my mindset, it makes a huge difference.
When I pay attention to news, I become more neurotic, doubtful, and less at ease. I become obsessive and outcome-oriented, which causes me to micro-manage my positions.
Yes, there are instant where overnight events can create a large gap that can hurt my trade, but it is rarely happens and even if it does sometimes it can be in my favor.
4. Focus on your own method and analysis
So, news is a form of noise. We’ve established that, but then, what about the traders you might be following on social media? They share valuable insights about the market, don’t they?
Here’s the thing: The great abundance of styles, methods, and analyses shows that there is not a one-and-only way. Hence, everyone has a unique perspective to offer.
An attitude of openness to diverse approaches and a willingness to learn from different perspectives can only help inform your own understanding. But the problem is that you must not allow those different opinions to determine what decision you ought to take when it comes to the trades you have on or plan on taking.
At all times, you must prioritize your own plan and method over that of others. No matter how much expertise these people have. If you want to consider their viewpoint and change your method, accordingly, do it when the markets are closed and when you don’t have any trades on.
But don’t just take things at face value, in the heat of the moment. It’s a recipe for disaster.
5. Don’t hesitate to put that trade on
You don’t learn to play the guitar within 2-3 months of sporadic playing. No, you develop the skill over time, through consistent practice.
Trading is similar. If you want to develop skills and get better at trading, you need to trade more often. For this reason, day traders tend to learn faster than swing traders or position traders, because day traders get to trade more often.
Don’t get me wrong: I’m not saying that day traders are more profitable or that day trading is easier. What I’m saying is that statements like “It takes years to become a proficient trader” are overdone.
While it does take time to learn to trade, it is practice that makes you better, and it’s difficult to learn if there are weeks or months between your trades, so don’t hesitate to put that trade on. Keep your risk under control and seek to learn from whatever happens.
Whatever direction you’re betting on, if you’re trading when the risk vs reward is good and the probabilities are in your favor, you’re doing it right.
6. Protect your account
Don’t shy away from losses. Just make sure they’re small and manageable so that you’re not booted out of the game. If you blow up, you can’t learn, grow stronger, and transcend what limits you. But above all, you close yourself to future lucrative opportunities in the market, so make sure you manage your risk well.
As a rule, your sizes should not be too big and not too small. Try to strike a right balance, a place where losses don’t have the power to destabilize you on an emotional level, and yet, where gains are still meaningful. If you can trade within that zone, the magic will happen.
7. Take it Easy
Don’t be too fixated on hitting a daily/weekly/monthly monetary goal. By doing so, you are raising your levels of stress unnecessarily, just accept what the market gives and see how that goes.
Trading is as easy or as hard as you make it.
· Never put too much hope in your analysis.
· Focus on showing up.
· Take trades with good risk vs. reward potential.
· Think long term.
That’s the secret.
8. Enjoy the Journey
Some people get into trading and immediately hit a jackpot, some people get into trading and immediately lose everything, some people get into trading, lose a lot, but then go on to make a lot more and there are some people get into trading, win a lot, but then go on to lose a lot more.
Remember, you’re not behind, you’re not in front. You’re not too late, you’re not too early.
You’re right where YOU are. You’re on time.
9. Take care of yourself
In trading, mindset is incredibly important, and yet easily overlooked.
· Trade in an environment that calms your mind.
· Spend time with people who truly inspire you.
· Read books that expand your mind.
· Eat good and healthy foods.
· Sleep a lot.
All these things will positively impact your ability to make clear and rational decisions in the face of uncertainty. Develop a positive state of mind. Look at the positives in every situation. There is always a reason to smile.
Never take a recent period of winning for granted. The tide will change. Be prepared and ready.
Act consciously and consistently and do your best not to fall back into some old patterns of yours.
Toxic habits and behavior always try to sneak back in when you’re doing better.
By Suren Subramaniam | 27 August 2020