Before taking a trade how many times have you thought i will buy at bottom and sell at top.
How many times have you removed your Stoploss after feeding it but removed it once price started coming near Sl.
How many times have you lost all profits earned in a trade and end up being a losser
If you have the above mentioned problems in trading
Reason is need for perfection
A common trait among newer traders, or among traders that are not profitable is a need for perfection. With so much noise in the media, blogs, and forums about calling tops and bottoms, one would think it’s a trader’s job to predict such things. Expecting to nail the top or bottom is a recipe for frustration and inconsistent performance.
For the discretionary trader, perfectionism is the enemy of the good. Trading is about making money while simultaneously controlling risk, it has nothing to do with perfectionism. All traders have some degree of perfectionism, but some have more than others. The variation in perfectionism is due to personality differences, and the different career backgrounds that some people bring to trading.
Traders with strong perfectionist tendencies often equate taking a loss with failure. For these traders, a losing trade often marks the beginning of a new cycle of negative internal dialogue that often leads to trades based on frustration instead of what the market is doing. A trader who is less focused on perfectionism and has more flexible expectations realizes the inherent uncertainty underlying any market is the reason why losses are part of the business. This realization helps one to develop the ability to tolerate emotions that are associated with pre-defined losses.
Another common problem associated with perfectionism is that it often leads to rigidity and a very mechanistic view of the market. The market is akin to a living breathing dynamic entity. The market’s moves, especially in the short-term, are not determined by precision and logic, but by perception and emotion. Letting go of the need to be right will free you up to focus on doing the right thing.
Reason 2: Discipline
Discipline is directly related to the bottom line of a trader’s account. The Professional Trader keeps a high focus on being disciplined and sticking to his system. He disciplines himself by constantly having the thought of making money and being positive at the end of the month in the forefront of his mind. This way he keeps himself from getting caught in the now emotional moment. He stays on the sidelines when the timing is wrong to enter a trade and always places stops while trading. He moves his stops up as the market moves in his direction, acts as he is supposed to by seizing the right opportunities as they present themselves. He also stays within his risk to reward parameters. Professional Traders keep their priorities in order by keeping their primary objective of profit at the end of the month at the forefront of their minds. This make doing what they should be doing very easy. This discipline is the same as being in shape. If you have the desired body shape in mind then you will act accordingly while eating and exercising. Professional Traders approach trading the same way.
Let the market make the decisions, not your ego.
The rules are not hard to understand. Recognizing a profit from a loss is simple. If the rules are easy to grasp and a profit is distinguishable from a loss, where does the problem lie? What makes it so hard to apply the rules? There is something within each of us that has a power over our minds that prevents our acting according to what we have agreed is the proper course of action. That something is present in all of us and is very powerful, more powerful than anything I know. Let’s call it ego. Until we learn to get rid of our ego, we will never make money in the market consistently. Those who haven’t identified the ego’s ways will eventually be destroyed in the market because of their ego’s tendencies. It is just that powerful. The market rewards those who have subdued their egos. Those who rid themselves of their egos are rewarded greatly. They are the superstars of their fields. In the market, rewards come in the form of profits. In the world of art, masterpieces are the results. In sports, the players are all-stars and command enormous salaries. Every pursuit has its own manifestation of victory over the ego.