The first step to successful trading is the right mindset and psychology. The proper mental discipline and attitude don’t guarantee that you will be a profitable trader, but the wrong mindset almost guarantees failure.
Here are the few steps that will take you in the right direction to the correct trading mindset that increases your probability of success.
- Focus on creating your own system that fits your risk tolerance and profit goals. You have to learn to filter all the information available to you on social media.
- You must have realistic expectations of what your equity curve will look like. All trading systems and traders have losing streaks and drawn downs in the capital. The market is dynamic, and it changes from trading to range and from volatile to tight trading ranges.
- Stop looking for other’s tips or signals and develop your own system. In most cases, you don’t know other’s time frame, position size, and stop losses, so it is difficult to follow someone else’s trades.
- Every single trade is uncertain, and you must accept that. Focus on the probability of the trade playing out for your system over the long term.
- You must accept the risk of loss on every trade you make and be sure that potential reward is worth that risk.
- You must balance the ability to let your profits run for large wins but also have an exit plan to lock in profits while they are still there.
- You have to stay flexible with every trade and be ready to exit if a trade is invalidated no matter how strong is your opinion or how much you believe in your prediction.
- If you get a valid entry signal, you have to take it. You can`t afford to miss a big win, but you can afford to make a small loss.
- Always focus on your discipline, positive trades, and the potential opportunities in the markets. You can trade for the long term only if you keep a positive attitude to help you manage your stress levels.