Mind set is important for trading

A Typical Scenario for a Trader Without Discipline:

You enter your trade based on a spontaneous decision that is not part of your trading plan, and the trade starts off in your favour with a small gain but suddenly drops beneath the entry price. Because you did not make the decision for entry within the parameters of the trading plan you have no exit strategy…..

You’re now in a position where you’re losing money and the only thing you have is your emotions to make your decisions……

Your mind will be telling you don’t take the loss, it will bounce, and even if I get out at entry I will be happy (the hope phase!) but then it drops further! You’re now in a position where you have to take the loss as it is either going to get you margin called or you simply cannot take the emotional and financial pain 

This is a cycle we have to go through to understand and learn how to be a trader but is the hardest financial lesson you will ever learn. It is how you deal and cope with this that makes you a great trader! Discipline is ultimately a very important factor that needs to be conquered in order to survive trading the markets.

A major subject in trading is the mindset, or psychology of trading, but it often goes unnoticed until after the losses have mounted and the frustration has hit unprecedented levels. Here at Stock-Market-Strategy, we believe trading is 75 % mindset and the rest is using a trading system, such as technical analysis and fundamental analysis. This comes as a big surprise to new traders especially because new traders are bombarded with trading systems, technical analysis books etc but it is the truth and we want to help you identify ways to improve your mindset.

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