Below is the chart of Nifty from 20 Jan 20 till 30 April We have seen a fall from 12430-7511 and Rally from 7511-9889 in matter of 70 trading session.
Did you make money in fall and Rise. Below Scenarios are possible
- You made Money in Downfall and Lost all profit in the rally as you were unable to change the mindset from bearish to Bullish
- You Lost Money in Downfall and were able to recover your losses in the rally
- You Lost money in both upside and Downside
- You made money both side..Congrats !!
If you have lost money than you need to work on your trading and make sure you move forward in remaining part of year towards profitable and Consistent trading
Take a moment to reflect on your own trading and investing experience. Have you ever:
- Taken profits too early, before your profit level was hit? –Yes
- Run losses too far or moved your stop further away to avoid a loss?–No
- Taken trades that were not part of your strategy or approach?–
- Not taken trades that were part of your strategy or approach?
- Taken too much risk; traded too big?
- Taken too little risk; traded too small?
- Chased your losses, or revenge traded?
- Overtraded in a state of euphoria?
- Traded through boredom?
These are quite common trading behaviours.
The key challenge in trading is not so much “Knowing What To Do” (KWTD) as “Doing What You Know” (DWYK). This creates the psychological gap that exists between having a strategy with a positive expectancy and actually trading it in such a way that it returns something close to those expected profits.
To perform well in the markets you need more than just skills, knowledge and a strategy with an edge.
You need to have a mindset that is
- Resilient, that allows you to take risk,
- navigate Volatility,
- Manage the pressures and stresses of the trading
You need to have the levels of awareness required to manage your thoughts and emotions and to be able to regulate your own trading behavior, to be able to sustain focus, resist the temptations to react on impulses and reduce the impact of behavioral tendencies and biological responses.
A strong psychological approach is integral to producing consistent and successful trading performance, to maximize the returns on your trading strategy.
By being able to work with your thoughts more effectively, being more open to them and less attached to them, you begin to develop the psychological flexibility that allows you to take effective action more often.
Trading is not just about having a Good Strategy its more about your Psychology .
Trading is about paying attention to what the market is doing right now and the environment around you, being aware of your own thoughts, emotions, physical sensations and any impulses or tendencies to act. This requires improving on your psychology and mindset