Trade With Precision Newsletter - Psychology

One of the challenges faced by both professional and aspiring traders alike is staying in the right frame of mind when trading. In our last article we spoke about the importance of timing, and like poorly timed trades, other factors in life can also adversely affect your trading if you do not have a plan to handle them.

As professional traders we often get asked to share our experiences from when we first started trading. This is a common request and we are happy to share what we have learnt since almost everyone we encounter wants to avoid amateur-ish mistakes. However, just as you can’t fly a plane after listening to a pilot talk about flying, it is unrealistic to expect that you will be able to trade like a pro right from the get go simply by listening to a professional trader talk about trading.

With the Cricket World Cup nearing the quarterfinals and the Aussie and NZ dollar with only 4 cents apart, it is hard not to come up once again with sporting and trading metaphors.  It is after all a TWP speciality!  

Successful traders who make money consistently over time have learnt how to deal with losses. They know that taking a loss on a trade is just the cost of doing business for a trader. They think of trading losses as a business expense, they are inevitable, but as long as they are able to generate more profit than loss then they’ll end up profitable.