Trading Psychology

I have studied all the most successful traders in history along with the more modern market wizards and trend followers. Here are six of the qualities that I have found in common with all of them. FOCUS Ability to focus their thinking into an edge. Rich traders can have different mental skill sets whether it’s […]

All traders have both wins and losses regardless of their strategy and system. Much like in sports traders don’t succeed on every trade just like baseball players don’t hit every pitch and basketball players don’t sink every basket. Trading is a game of win rate and positive expectancy through bigger wins than losses on average.

Trading psychology is the emotional and ego elements that enter into buy and sale decisions during the decision making processes of buying and selling along with how big of a position to take. Humans are emotional beings and don’t always act rationally. Crowd behavior is what causes the huge asset bubbles that become far removed

The psychology of trading can be just as important as the method chosen, the system development, the strategy used and risk management. Without the right mindset using clear rational and disciplined thinking nothing will work over the long term to create profitable trading as mental errors will sabotage any trading edge. The three primary mental

Mastering your emotions and ego are an essential part of profitable trading as the trader is the weakest part of any trading system. The three things needed for profitable trading is a quantified system with an edge, proper risk management for implementing that system, and the right trading psychology for executing the system with discipline

The Hagakure: The Book of The Samurai records Yamamoto Tsunetomo’s views on bushido and the warrior code of the samurai. It was written in the early 18th century and explains many principles of the Samurai warrior. Many of these same principles can be used in business, sports, trading, and investing to achieve a warrior mindset

Professionals don’t count their money while they are working they focus on execution. A surgeon doesn’t look at the clock for how much money they have made, they focus on the surgery, patient, and process. Professional athletes keep their eye on the ball and not the scoreboard when they are on the field of play.