Trading Psychology – Emotions and Day Trading

“Soros is the best loss taker I’ve ever seen. He doesn’t care whether he wins or loses on a trade. If a trade doesn’t work, he’s confident enough about his ability to win on other trades that he can easily walk away from the position. There are a lot of shoes on the shelf; wear only the ones that fit. If you’re extremely confident, taking a loss doesn’t bother you.”

Trading is a probabilistic process, results in the short term do not always distinguish between good and lousy processes. David Sklansky wrote in The Theory of Poker: ‘Any time you make a bet with the best of it, where the odds are in your favor, you have earned something on that bet, whether you actually win or lose the bet. By the same token, when you make a bet with the worst of it, where the odds are not in your favor, you have lost something, whether you actually win or lose the bet.” If your process is sound taking a loss in the short term shouldn’t bother you, as Druckermiller learned from George Soros

Lets take an example of Rahul who is doing Intraday Trading, and explained with the Below Example of Today Nifty Trade.

He was being pulled in different directions by competing fears. Initially his thinking was contaminated by a fear of uncertainty that kept him tentatively on the sidelines of trading as he missed morning As he sat out watching the price climb, a fear of missing out on a profitable trade fueled an impulsive entry into a trade.

Without a capacity to manage his emotional states, Rahul’s took an impulsive trade and entered trade way above his entry price and did not even think about Loss.It did not work this way in trading and as shown in above graph he avg and did all mistakes a trader do as he is unable to manage his emotions.

The breakdown for Rahul, and many traders, is that there is no room to avoid the fears and self doubt in trading. They had to be dealt with head on – a talent he had never developed. Its time had come.

To help him identify and resolve issues that affected his trading performance, Rahul Joined our Psychological Trading Course . By taking responsibility for his profitability, Rahul came to recognize that he could develop himself into the trader he needed to be.

By learning how to calm his body and mind down Rahul was able to learn how to take mange fear and understood  that there will be losses – but there will also be a higher ratio of gains. His job was to reasonably manage risk over a larger number of trades.

Before, Rahul placed life or death significance on each and every trade. With training he was using his psychological discomfort as a reminder that he needed to trade from a calm and impartial state of mind. His ability to take a step back from his automatic fear response into a calm state of mind allowed him to develop the qualities of a successful trader.

Rahul now mentally rehearsed his trading day, rather than just allowing it to hit him with full force. He used breathing and relaxation to calm his body and mind so that accessing calmness, discipline, patience, courage, and impartialness became a possibility – he achieved emotional state management.

And with a disciplined daily practice of keeping the body and mind calm and mental rehearsal of calm assertive states of mind, he was prepared for the trading day. His inner game was in the zone.

Developing this part of his inner game of trading led him deeper into his ability to manage his emotions and his states of mind – and it positively impacted many other areas of his life. He had come a long way from being stuck on the sidelines by his fear of uncertainty and then impulsively entering trades out of a fear of missing out.

Rahul’s decision to take responsibility for his states of mind and to learn to manage them created a very different trader and he was able to make money on consistent basis.

2 thoughts on “Trading Psychology – Emotions and Day Trading”

  1. I liked ur article on camarilla pivot points but I’m not able to find much success in it, n what methods u use for intraday

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