Trading is about learning, practice, and patience. But there’s also one key aspect involved: the psychological part.
The mentality can often make the difference between a good and a bad trade. Even professionals can sometimes struggle with emotions and become prone to making mistakes. However, with the correct mental preparation and the right amount of perseverance, you can learn how to control your inner self in the heat of the trading action.
Below you can find some tips taken out from the experts’ book. We will talk about them in three parts, with the first one covering how to detach yourself from live trades.
Without any further ado, let’s get into details and see how you can improve your mental preparation:
Detachment from live trades – the first critical step for mastering the mental side of trading
More experienced investors find it easier to detach themselves from a live trade. You should aim for reducing your emotions as much as possible after you press the buy or sell button. Once you get to this point, you have a much better chance to improve your trading because you will reduce the emotion-based mistakes. Next, we will discuss how you can start working towards detaching yourself from live trades.
Avoid getting obsessed with charts!
The experts agree on this one: removing your #charting obsession could be a good starting point. Starring at the charts won’t help much, as you cannot control the market and what happens inside it. You can only control yourself, how you react, and what you do.
Having enough patience and confidence in your plan to let the trade play out without your involvement becomes vital here. You can try out this neat trick: after you place the trade, walk away; turn off your computer and think about something else. Of course, this only applies when you don’t go for quick-fire trading.
Word of caution: during volatile periods, you need to keep a close eye on the charts and graphs. Volatility can often lead to significant price swings that can turn the tide of your trade in either direction. For this reason, make sure you use risk management orders all the time.
Don’t delve into screen watching paranoia either
Traders can easily fall into the screen watching paranoia habit, and that can turn out to be a bad thing instead of a positive one.
If you start watching the screens all day with live trades, second-guessing can creep inside your mind, and slowly but surely, you will become less confident in your strategies and plans. The same thing applies to continuous news monitoring: they're both bad for your trading if you start abusing them.
If you want to detach mentally, the bottom line is you have to physically disconnect from the compulsory idea of keeping your face glued to the monitor all the time.
According to analysts and experts, your goal, to mentally detach from live trades, is to set the trade and move on. It’s not always easy, but you must do it if you want to be in control of your trading. With practice, you can get better and better. Also, a strong will and determined mind help as well.
How to get into the habit of detaching – possible solutions
We’ll finish this article by presenting several potential ways of solving the detachment issue.
- Stick to your #trading #plan and your proven systems; everything else should come on the second place during those hours you designate for trading; having complete faith in your strengths should help you avoid the two major problems we discussed in this blog post; this objective should also be one of your primary goals if you want to become a more accomplished trader.
- The next logical step here is keeping a trading agenda to see what worked and what didn't, how individual decisions affected your trades, and what needs improving; if you get into the habit of writing down all of these things, it could become more comfortable to start ignoring charts and screen watching.
- Come up with a distraction; look for something you like to do every time you have a live trade going on, so that incorporating it into your trading routine is easier; perhaps you're into video games or movies – these options are as good as any, as long as they can distract you from opening up a chart or two or monitoring your trades 24/7.
Sources: investopedia.com, babypips.com
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