Do You Have A Trader’s Mindset?
This is the Part 3 of Money Management article. If you haven’t read the first part then you can read it here “Money Management : A new Approach”
As a trader I need to keep in mind that even the most successful system will have series of losses. This is called Drawdown and it is part of life. I am mentally prepared that this is going to happen sooner or later, it helps me prepare and control my risk.
When I look at my equity curve and it points up steadily over the period of time, I know that I’ve been disciplined and successful in controlling risk. This is gives the confidence boost beyond imagination. Getting into the zone and acquiring trader’s mindset will take time, here are tips that may help:
- Try to be calm when trading. If your mind is occupied with some other concern than try to avoid trading until things settle down and you believe that you can trade calmly.
- Develop ability to focus on present reality and not how you would like reality to be. No one can see the future, so try not to predict it.
- Understand that making money is not the only point. I personally don’t look at dollars when trading, I look at pips and keep a log in pips made or lost.
- There is always room to learn more. Never stop your self from reading more, keep your updated with news at all times.
- Being open minded, keep opinions to a minimum. Don’t let others opinion affect you before you make a trading decision.
- Avoid anger at all cost.
- Learn to enjoy the process and make trading as your passion.
- Only trade one system or method at a time. What hurts the novice traders the most is the impatience when testing a system. Stick to one system at one point of time.
- Understand that we cannot control or conquer the market. Market is so big that no one can really control who wins and who lose.
- Stop feeling that brokers or market has taken you for a ride. There is no conspiracy, there is hidden agenda. Stop feeling that you are being cheated by the market.
- When it goes bad, take responsibility of the results. Don’t blame market, broker or some one else for your loses. Accept your losses and move on.
The points above helped me a lot to get where I am today. However you may disagree with some of the points, feel free to comment.
I throughly went through your given tips that will really help me to do best trading and increase my profit.
Firepips is a great site for a newcomer to forex offering many valuable insights. Just one small observation. I think there is a typo error in the paragraph : “Understand that we can control or conquer the market”. I think that should read “we canNOT”. Anyway, really good material. Thanks!
Thanks Sleepydog, I’ve fixed it now.