Do you feel like a professional trader? Wait before the singing victory. If you have even one of these “thoughts”, you are on the wrong path.
What does a trader do? A professional trader and especially a winning trader? Of course, it is also a matter of technique. Those who do not have a solid background, those who do not have specific skills cannot think about coming to the market and building a career in it. However, technology is not enough. This is the real secret: being a professional trader means having a winning mentality. It all starts “from the head.” It is the right mental framework to give that reward that allows you to take advantage of opportunities, minimize losses and grow trade after trade.
Having the right mindset means having positive thoughts, gains. It follows that those who consider themselves as professional traders, but who really are not yet, have harmful and unnecessary thoughts. In this article we will deal with them, presenting them in the form of statements. If you are there, there is bad news for you: you are not yet a professional trader.
This time I lost, but I will compensate with the next trade
It sounds like a harmless thought. On the other hand, even in everyday life, there is a tendency to react to defeats in this way, hoping to compensate all or part of the next opportunity. However, if we talk about online commerce, it is a very dangerous purpose. The reason is simple: it feeds the “game style” approach, which is the worst drift for a trade. Worse, paved with good intentions is the road to Martingale, which professional traders consider as the road to hell.
And then, it’s the math. If you even plan to invest 10% of your total capital, perhaps to compensate for one or more losses, you will only need five losing operations to burn half of your resources.
This thought, therefore, must be replaced by self-denial and respect for its strategy, which must be improved with a prudent Money Management program.
I lost five transactions in a row. I feel in favor of the market
If you want to be a professional trader, you have to put one thing in your head: in the market, karma does not exist. In real life, “out there,” karma may be expected, but in online commerce, providence is a completely foreign concept. If you have lost five operations in a row and do not change your record, you have a good chance of losing again. So I banish this harmful thought: the risk is to loosen control, waiting for a gift from God that will never come.
I blindly trust the trading system and will follow it at any price
Here we must distinguish between trade systems created in person and trade systems assimilated by others. In the first case, self-denial is a duty. In the second case, no. In fact, blind trust is risky. The reasons for this are a fairly simple fact: that the trading system, which has been transmitted to you as “universally” effective, may not fit you, in your negotiation style, in your risk profile. So why trust me? Wouldn’t it be better to rework or adapt it?
The fault is the news of the market!
It happens to many who fail in operation because, at some point, a story was published that has shuffled the cards on the table and sent to ruin their predictions, perhaps thanks to a careful technical analysis. It can happen. The important thing is not to cradle, blaming what happened outside the letter. The fault is yours because you have not consulted the economic calendar. To think otherwise is to ignore a mistake and be destined to repeat it.
I don’t start trading because I don’t have the means to do it
Obviously, those who make these thoughts do not even think they are a professional trader (also because they have not even started). However, being a rather harmful thought, it is good to mention it here. In fact, it is only an excuse, a tool to postpone, not to deal with their insecurities.
To operate online, you do not need a state-of-the-art computer or a 4K TV. Unless, of course, you want to participate in automated trading. However, even then, the solution to the technology problem is there, and it is at your fingertips. The reference, very clear, is to Forex VPS.
I already know how I will spend my money!
Desires to feed are legitimate and, in fact, beneficial from the point of view of motivation. If these desires, however, dominate your thoughts, you have a problem. You are consuming your mental energy for something that, at best, will come true in a couple of years (unless the exception confirms the rule). Some might even say it is bad.
Someone, who has nothing to do with trade, would say “don’t say cat if you don’t have it in your bag”. Here, this maximum also applies to online commerce.
I don’t need a trading diary
Writing a diary may seem childish, naive, perhaps useless. In online commerce, however, you can make the difference between a burned race almost immediately, and a race that is about to take off (if you haven’t already done so). The truth is that the operations diary is very useful. First, because it sheds light on mistakes, and secondly because it is the main tool for “overcoming them.” Thanks to the newspaper you understand what is wrong and can remedy it.
Psychology is not important
This is a mistake, especially for newbies. In fact, anyone who has had problems at least once (and sooner or later happens to everyone), knows very well how important psychology is to a trader. Or, rather, how much it affects the emotional sphere, the impact that the “mind factor” has on performance. Therefore, it is not enough to have a good trading system, perhaps backed by a strong body of experts. It is also necessary to cultivate one’s mentality, to strengthen it.
The surer I am to win, the more I can invest
Linking the figures you are going to invest per operation to your sense of security is really dangerous. Money management and risk management are not based on self-confidence, which is extremely subjective, but on objective evidence. So, about historians, about the total amount of capital available, about the factors potentially capable of refuting the analysis.
If a strategy is complicated, it means it works
This is a deep-seated prejudice even among experienced traders behind them. That is, if something is complicated, then it is “technical,” and if it is technical, then it works. In online commerce, in practice, it doesn’t work that way.
Complicating things only works…. to complicate them. Not to mention that managing complexity is a good job, and it’s certainly not available to newbies. The advice is, at all levels, to choose simple but effective tools. The reference is mainly to the indicators. Very often, classic pivot points and some moving averages are sufficient.
I will refine my risk management once I have earned enough
This is a very widespread thought among the neophytes since the idea of acting with caution only diffuses after having produced some results. Well, it is not only dangerous but also illogical. Caution is the path to success, not an obligation that must be fulfilled as such. Those who think backward have no chance of making money, unless – and this should not be excluded – a few strokes of luck one after another. But it is obvious: luck is not a weapon to rely on too much.
If a system works on a daily chart, I can earn ten times more on the 30-minute chart.
Well, that would be great. Unfortunately, the change in the time horizon also changes many other factors. It follows that trusting the principle of proportionality, in this case, is very dangerous. If the chart is modified, the strategy must be adapted.
Stop Loss is for the weak
Thank God, it is a rare thought among traders with a minimum of experience. Beginners, beginners of the highest degree, however, often do this thinking. Stop Loss is considered as an action that, in itself, hides the certainty of defeat, a kind of putting hands forward. It seems, in his inexperience, a demonstration of failed mentality. And instead, the stop loss is a useful tool, in fact indispensable, one of the few capable of saving the saved, of optimizing the losses, of not getting hurt too much. The stop loss lays the groundwork for recovery, therefore…. It is for the winners.
I want to be a merchant, so I quit my job
That is the thought that goes with the thought of desires. Of course, there are many cases in which merchants have given up their original work and have dedicated themselves to the merchant full time, given the results. However, they did not immediately. First, they got the first results, at first they gained economic freedom and only after they left their professional work. In short, leaving the truth for the uncertain, both in commerce and in life, is always a bad idea. At a minimum, you have to wait for your operator skills to break free from the “sphere of uncertainty.”
I’ve failed again, I’m a loser
Let’s be clear, if you just lost, and have tried everything, it may be that the trade is not for you, and there is nothing wrong with it. Exactly, after having tried them all. Leaving difficulties at first is really a shame. Many winning stories begin with a defeat, and this is true in life in general. So, before throwing in the towel, give yourself some opportunities.
I did the test and it worked, so I can’t lose
Before adopting a specific trading system, it must be demonstrated in previous market conditions. If it works, it can be used here. However, even in this case, there are no guarantees of infallibility. Many things can happen, such as an event that makes the present “incomparable” with the past (or at least with the historical data that was used for backtesting). So, get ready to take the lead again and change in the race.
Before entering the market, I must be confident that I will win
It was said that Pompey, the historical adversary of Caesar, never entered the battle if he was not sure of winning if his army did not exceed that of the enemy in number. Well, Pompey lost. This means that it is useless to seek 100% security, because this will never be there and, in fact, you run the risk of losing opportunities.