Trade With Precision Newsletter - Psychology

I'm pretty sure that anybody who has ever placed a trade in the markets knows the feeling that as soon as your money is on the line you feel a certain tension and want to watch how your trade is doing. You did all your homework, double-checked the essential and bonus factors for the setup and you feel confident that this trade definitely has to be a winner. How can it not be?

It takes wisdom and self-control to resist taking trades that aren’t the best fit for your trading strategy. Especially if you have not traded for a while. Sometimes the temptation to trade for the sake of trading can be so great that you end up taking shortcuts or miss glaring red-flags on a potential trade set up. Being addicted to action clouds your judgement and is detrimental to your long-term success. What can you do to overcome the urge to jump right in?

In our experience working with thousands of traders worldwide, it is surprising how often we get asked this question! While we do not have a specific amount that works for everyone (it varies from trader to trader), it is interesting to delve deeper and look at the emotions in play that cause so many to be hung up on this one particular issue. You need to address these emotions before you can decide on the amount of capital suitable for you.

Following on from Part 1, now that we understand the mindset involved in trading full-time let’s delve a little deeper into the strategy side of things. Besides having a business owner’s mindset, you will also need to adopt a trading strategy.  A “strategy” is simply a fancy word for having a plan of action that shows how you are going to achieve a long-term goal, which in this case is an ongoing and profitable trading business. What are some of the factors professional traders might consider when creating their trading strategy?