Breaking Bad Trading Habits

Success as a trader means being consistently profitable which  requires developing a good trading plan and, most importantly, sticking to it. One of the most destructive habits a trader can have is ignoring the rules of their own trading plan about when to enter and exit a trade. Breaking this bad habit means critically examining how you view the success or failure of any single trade.

“The chains of habit are too weak to be felt until they are too strong to be broken.”

– Samuel Johnson

Common Bad Habits in Trading:

  • Taking boredom trades because of lack of patience
  • Chasing trades due to FOMO
  • Revenge Trading
  • Moving stops and taking big losses
  • Cutting winners short
  • Risking too much on any given trade
  • Giving back profits throughout the trading session

Traders are constantly telling us that they are aware of the habits that are weighing them down but for one reason or another, they just can’t seem to stop themselves from repeating them again and again.

These patterns occur at a subconscious level without our being able to control them and this can become frustrating very quickly and lead to trading on tilt which is when things can really start to spiral out of control.

Most of Traders have Reward Mechnism but NO Mechanism When they Break there own trading rules. Like if we Break any Traffic Rules we get Challan.

Rules are Rules, and there are consequences for breaking them. And In  trading also we should follow this. 

After Every Loss Most of traders goes through same set of Emotions,At first, I got angry, and then I looked to make excuses for why it happened, why it wasn’t his fault.Inevitably, we all face those same thoughts and emotions following losing trades or anytime we break a rule, right?

That’s a natural reaction, and our way of trying to dodge the punishment system. After all, nobody really wants to face difficult truths, or own up to the fact that they were wrong. As humans, we’re not programmed to want to punish ourselves.

The very same concept of having a reward and punishment system to help traders promote only desired behaviors is what we need to develop if we want to Break Bad Trading Habits . You break a rule, you get punished…simple as that like we do in our Normal Life.  Many Prop Trading firm employ this punishment system to there traders.

Pusnishment can be like 

  • Shut down and not trade anymore that day or 1 Week depening on the Quantum of the Loss
  • Anything which Gives You Emotional Pain

If it means you have to relegate yourself back to demo trading to work on specific skills and use proper discipline, then so be it.You have rules for a reason, and a punishment system in place to make sure you follow them. Every mistake—when handled correctly—is a learning experience that shouldn’t adversely affect your trading.

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