Trading Psychology – These points will quickly correct your psychology In this blog post, we have mentioned some points and books that can improve the trading psychology of the trader. Many traders have read these books and have seen improvement in their trading psychology by reading these books.
What is trading psychology ?
When new traders trade and their trade starts going into loss, they feel scared, this is also a psychology. You will be scared until you manage the risk. A trader can become a trader only when all things like emotions, greed are removed from his mind.
Trading psychology describes the emotions, behaviour and mindset of a trader which have a very deep impact on his trading decisions. It includes factors like greed, fear, discipline, patience and confidence which affect your trading performance.
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how to improve trading psychology
Trading psychology cannot be improved in a day, for this you have to work hard every day. Below we have explained how your trading psychology can be improved, you will have to make all those efforts every day.
Develop a trading plan –
Before trading you should know whether you are going to invest in this stock or do intraday trading. Your trading plan depends on this. Everyone should make a trading plan, this can improve your trading psychology.
Control your losses
As we saw above why it is important to make a trading plan, similarly before taking a trade you should know how much loss you can incur in that trade.
This means that if your mind knows that I am going to lose ₹xxx amount in this, then it does not affect your trading psychology. If you incur a loss more than your calculated loss, then it affects your trading psychology. After that you may over trade and end up losing all your capital. It is better to control your loss.
Control your emotions
If you do not control your emotions, it can have a negative impact on your trade. When emotions are uncontrolled, a person can make wrong decisions in a fit of rage.
If anger, frustration or excessive excitement are not controlled, it can lead to mental stress and depression. This will not only spoil your trading psychology but can also end up wiping out your entire capital.
Patience
It is very important to be patient in anything, you have to have full faith in your setup and be patient. Otherwise you would have seen that you took a trade and after some time you cut that trade and even after you cut it, that trade would have given your set target. Because of this you have to be patient and either take a target or a stop loss.
Risk management
You must have heard many times that risk management is very important, this is true, until you know your loss and profit how will you know whether you are profitable or not.
You need to work on 1:2 or 1:1 setup, if you take 10 trades then 6-7 of them should be profitable.
Continuous learning & Discipline
You need to keep learning new things every day, for this you can read books every day.
You have to work with complete discipline, if you do not follow discipline and the rules made by you then you may be slightly profitable but if you want to make a career in trading then you have to follow discipline.
Best Book For Trading Psychology
These are some books which can improve your trading psychology, traders must read these books.
- Trading in the Zone” by Mark Douglas
- The Psychology of Trading” by Brett Steenbarger
- Trading Psychology: The Bible for Traders” by Anirudh Sethi
- Trading Composure” by Yvan Byeajee
- Trade Like a Monk” by Harneet Singh Kharbanda
- Stocks to Riches by Parag Parikh
Frequently Asked Questions FAQ’S
Best Book For Trading Psychology
Trading in the Zone” by Mark Douglas
The Psychology of Trading” by Brett Steenbarger
Trading Psychology: The Bible for Traders” by Anirudh Sethi
Trading Composure” by Yvan Byeajee
Trade Like a Monk” by Harneet Singh Kharbanda
Stocks to Riches by Parag Parikh
how to improve trading psychology
You have to control risk reward, discipline, patience, control your emotions, and profit and loss, greed and fear only then you can improve trading psychology.
What is trading psychology ?
Trading psychology describes the emotions, behaviour and mindset of a trader which have a very deep impact on his trading decisions. It includes factors like greed, fear, discipline, patience and confidence which affect your trading performance.
Conclusion
We hope that after reading this article you have understood everything about trading psychology correctly. We hope that you will improve your trading psychology and become a good trader.
Disclaimer : The information presented in this article is for educational and informational purposes only. We do not recommend buying or selling stocks. These predictions are based on our research and technical data, any uncertainty in the market may affect the stock price, so investors should do their own research before making investment decisions. We will not be responsible for any loss or damage caused by the use of this article.
