Emotions plays vital role in trading success and failure. Emotional trader can never be able to trade profitably as An emotional trader is likely to act impulsively and make trading errors. Emotions of Greed can come when you are in good profits instead of booking you get overpowered by your emotion and move away from your trading plan and continue holding position thinking of getting more profits and eventually exit in loss.
So how can one identify an emotional trader? Please think on each and every question in details correlate with your trading and give a Honest as its you only who will know the results and will improve your trading in longer run.
Do you have Trading System which has been back tested for at least 2 years
Do you have Clarity on entry and exit criteria on any given trade
Do you have a detailed trading plan including all probabilities before market opens.
Do have Stop loss in your trades, If Yes do you follow them.
Do you adhere to your Stop loss once it gets triggered
Do your loss making trades are bigger than your winning trades
Do you have “Big Swing” in profitability ie. having 1 months of profit and followed by heavy looses.
Do you carry losing intraday trade into the next day?
Do you have a plan that gets you back on track when you’re off?
Do you keep track of all your trades?
Total Number of Yes:
Evaluation as per Number of Yes you have got:
1-3 You are not in control of your trading. You should be very cautious. Continuing in this direction you will blow off your trading account.Better to Stop Trading right now and protect your capital. Invest in Education
4-7 You, are not in the amount of control needed to succeed and need to develop a plan and possibly get some mentoring to help.
8-10 You, are in good shape have a plan and are disciplined to succeed
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