1)
Fundamental analysis doesn't take fellow traders (especially the traders
who can manipulate the price, whom we call as OPERATOR) into
consideration. It often tells what the price should have been rather
than what it is now
2) Technical analysis helps us to anticipate the
future price movements based on certain patterns and historical data. It gives endless opportunities for entering into trade.
Mental analysis -
3)
Even if we have understood markets and come to level of predicting
directions, we would not have earned as much profits as we would have
expected.
4) Even if we have identified certain patterns and expected it to move in the expected direction, we would not have entered into the trade. Instead, we keep thinking how much money we could have made. This is called as psychological gap.
5) Only very few successful traders trades in real market as easy(without fear) as they do virtual trading.
6) Difference between successful consistent traders and normal traders - thinking in a different way.
7) The defining characteristic that separates the consistent winners from everyone else is this: The winners
have attained a mindset of attitude that allows them to remain disciplined, focused, and, above all, confident in spite of the adverse conditions. As a result, they are no longer susceptible to the common fears and trading errors.
8) Best trader accepts the risk and all possible outcomes before putting a trade.
9) Successful trader is the one who executes a trade without any slighetest of doubt and conflict in mind. With the same mentality, trader will exit in loss if it is not going as desired and admit that trade is not working. And this loss won't create a emotional discomfort in successful trader's mind
10) Loss making trades will not make successful consistent traders lose their focus, discipline and confidence.
11) If we don't accept the risks involved, then we will try to avoid the risk. Avoiding the risks will have disastrous effects on trading loss.
12) When we learn the trading skill of risk aceptance, market wont be able to generate information that we interpret as painful. Market is just the information which tells what all possibilities exist.
13) There is no trader who hasn't done the following:
a) Entering into trade before market has generated th signal
b) Entering into a trade very late
b) Exiting trade soon
c) Turning profitable trade into loss making trade
d) Accumulating a big loss by convincing ourselves to not to exit on time
e) Having a small stoploss - After hitting the stoploss, price might have moved in the direction as we would have expected
These are some of the errors of traders
14) These are not market generated errors. Market is neutral. It just moves, generates informations and provides us with opportunities to take some action.
15) These errors are due to faulty attitudes and perspectives. These will make make traders more fearful instead of making them confident.
16) The differnece between best traders and normal traders is that that best traders are not afraid.They aren't afraid because they have developed attitudes that give them the greatest degree of mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective. At the same time, the best traders have developed attitudes that prevent them from getting reckless.
17) When we are afraid -> narrow our focus - we cant think properly and cant take appropriate action; cant think about any other possibilities; cant think about available information in the market; cant think about what we have learnt previously.
18) If we don't understand how our beliefs and attitude affects our perception about market information, it will look like market behaviour is causing us inconsistency. Then we will think to study more about the market behaviour to be more consistent.
19) But the tricky part is, we can't master the markets and anticipate every movement of markets as so many persons are involved in this price movements and each person has different perceptions.
20) So if we are afraid about being wrong or losing money, we can't be confident in trading. Unless we accept completely the risk involved, we will end up in wrong side of trading due to self generated errors.
21)
Market analysis is required to identify the opportunities for trading.
But market analysis alone can't make a trader, a successful consistent
trader. Market analysis won't solve the problem which are created by lack
of discipline, lack of confidence or improper focus.
22) Confident and fear are two important factors. To remain confident in this uncertain world of markets, we require trust in ourselves. We will gain this trust only if we learn to override our natural inclination to think in ways that are counterproductive to being a consistently successful trader.
23) Learning about the markets alone wont help us to be a successful trader. We have to define our trading activities in a such a way that we have truly accepted the risks and not afraid at all about negative outcomes.
24) When we attain a mindset that truly accepts the risks, market information (price variations) won't be painful to us. When we don't perceive market information in painful ways- we won't hesitate, jump into markets early, hoping for a movement in the price or hope market to save us from the loss.
25) When we have appropriate attitude(trader's mindset) and remain confident in uncertain markets, trading will be very easy.
26) We need to adjust our attitudes and belief about trading in such a way that we trade without any hesitation and fear with a proper framework in place.
Conclusion : Have trader's mindset. If we accept the risks completely in a trade, we wont be afraid and will trade confidently and without hesitation. Be disciplined, focussed and confident. Use the market information without any bias or inclination. Have a framework and trade confidently.
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