Psychology Plays most significant role while Trading the Markets
I experienced Psychology plays most vital role in Trading. I observed many traders do not follow their strategy for a long time. They apply the strategy for few days or few months and then they are busy for finding new trading strategy.
Traders always spend most of their time in searching new strategy. Traders do not pay attention to understand Trading Psychology which is the most and essential part in trading.
Trading Psychology plays major role to get success in trading. Actually trading psychology is more important than any trading strategy.
How psychology makes difference in trading.
Many traders trade the market using their strategy for few days and do not follow the rules and discipline of their strategy. They just change their strategy and use new one , Thus they use different strategies and finally they fail in trading and blame the whole system or the market.
Actually if they have applied their strategy for long time following the rules and discipline they might be successful. It is very difficult to have patience and control in trading.
Once the trade is executed, traders are just watching for there target desperately and change there mind psychology according to the fluctuation of the market.They are not planned for the trade and finally they exit the trade making big losses.
If you have perfect trading strategy but if you don’t follow the rules and discipline of that strategy you will never be successful in trading.
How stop Loss is very Important while trading.
Believe it ! You cannot take big losses and expect to be a profitable trader. If you are not ready to take a small loss, then you will take the mother of all losses !
How Money Management makes difference in trading.
Money management also plays a vital role while trading. If you have worlds best strategy in trading but if you don’t follow the money management you will definitely fail in trading business .If you don’t calculate your risk per trade and trade blindly without calculating your lot size then it is just like committing suicide.
Before trading just calculate that how much risk you can take.Whether you are comfortable with the risk you trade or not.If the trade is going in opposite direction then how much risk you can take so that you will be comfortable for next trades.
Remember always you should know your risk before executing the trade. Money management is the main key for success in trading.I experienced risk management is the most essential and necessary factor in trading.
Importance of strategy in Trading industry .
I think trading strategy comes to be the third important factor in trading after Trading psychology and Money Management. I experienced many traders find new strategies and without applying that particular strategy for long time they declare that this strategy does not work. And they get busy in finding another strategy.
Actually traders does not follow the rules and principles of the strategy.Traders focus on there trading account. Traders are busy in calculating there money in trading account. They don’t focus on the trading science, they focus only on money and they expect each trade to favor in their direction.
If their stop loss gets triggered they got angry and blame the all system and risk their all fund in just a single trade to recover their losses. But one opposite trade spoil there account completely and most of the traders exit this beautiful industry.
Therefore following the rules of the strategy is more important than the trading strategy.
Mostly it is observed that traders priority in trading is first strategy and then the remaining factors. I think in trading traders should focus first priority on Money Management and Trading psychology and then the trading strategy.
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