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Psychology

Bear Market RallyBINANCE:BTCUSDT Bear market rally Prior to anything else, it's critical to realize that we are currently in one of them. Bear market rallies are brutal because it's difficult to predict how long they'll last, how strong they'll be, and how long they'll last. It is challenging for most individuals to comprehend this because they lack patience and think in terms of the most minute time frame. Rallies that periodically occur inside the downward macrotrend create a downward trend with lower highs on high periods (from 3 days to 1 week). Some of them result from cutting short positions in order to profit and start new short positions at higher levels. Ultimately, a redistribution takes place after several weeks of growth of 30–50% (or possibly twice that, depending on the market's structure). Before they pull the rug out from under people, they need to think that the macro trend has altered. The market's function is to take money. Although he is capable of giving in, movements usually happen when traders are not around. The price rises if everyone is short. Down if they are long. Although it seems strange, it is true. The market is an evil steed. You are forced to buy when prices increase. Moving lower encourages selling. You must act because of the price. Keep in mind the feelings you have as you move up or down. There won't be much market share lost if the price declines uniformly. However, the availability of rebounding enables powerful players to profit from movements in both directions while also taking the most money possible from you. Months of decline, followed by a recovery. You don't believe it at first, but it keeps getting stronger. When you finally give up and put your chips back on the table, they again take them away from you. Before you declare that a fresh bear market has started, consider how long downtrends often persist. You should expect downtrends of one to two years and possibly a year of unpleasant sideways movement. Both in the cryptocurrency market and the stock market, there are a ton of historical examples of this. Look at the numbers and consider whether the extra funding can sustain the FDV of a sector whose overall valuation has increased 7 times. Do we have a sudden increase in users? new currency The levels of BTC , ETH, ADA, and SOL as of today were marked to the nearest dollar six months ago. These are merely precursors to a bearish comeback and nothing more, as the primary macroeconomic issues still exist. There will be multiple chances over the coming weeks to sell the rise and rebuy lower. After that, the decline will likely continue or there will be a long flat. If someone tells you there will be a new bull market but doesn't know how or why we got here, don't believe them. Any powerful move up will inevitably be met with a countermove below. You'll now start to wonder why you didn't take advantage of the opportunity to make a profit. Don't be frightened to simply progress upward gently. Protect your capital to survive. Unknown are the scope and length of the current era. However, given the background, it is likely that the trend will last for some time. There will be multiple chances over the coming weeks to sell the rise and rebuy lower. After that, the decline will likely continue or there will be a long flat. If someone tells you there will be a new bull market but doesn't know how or why we got here, don't believe them. Any powerful move up will inevitably be met with a countermove below. You'll now start to wonder why you didn't take advantage of the opportunity to make a profit. Don't be frightened to simply progress upward gently. Protect your capital to survive. Unknown are the scope and length of the current era. However, given the background, it is likely that the trend will last for some time. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch!
COINBASE:BTCUSDEducation
by Crypto4light
The Brutal Reality Of TradingMost of us want to succeed and we want it fast, this is just our nature. We live in the age of Amazon next day deliveries and content binges across social media, Netflix, etc. However, trading is about being able to follow a systematic plan consistently over time. This consistent execution then translates to probabilities playing out in our favour over a fair amount of trades. Due to most traders wanting to succeed and do it quickly, combined with all the information and opinions flying around online, they begin forming unrealistic expectations about what they need to get to achieve what they want. I know because I wasted over 2 years cycling through over 100 strategies, backtesting them all, trading them all and STILL losing money. In practice traders think they need extremely complicated systems to develop an edge, this often leads to more room for human error. What's a fantastic catalyst for increasing the frequency of human error? Emotional stress. What are the markets great at? Generating extreme amounts of emotional stress! The result? A lot of mistakes and a lot of losses. To compound this, we are always monitoring our progress and comparing it to what we want to achieve. This is normal and healthy. However what's unhealthy for traders is how they measure their progress. For most, trading progress is measured by profitability. However, profitability has so many components within it that if multiple elements are faulty, judging yourself on whether you are "profitable" or not is completely pointless. For example, if you struggle with FOMO entries, not holding your trades to target and extending your stop loss, then just because you fix one of these, doesn't mean your results will be profitable. Your P/L could improve, get worse or stay the same. However if you conclude that you haven't made progress, you'll disregard the changes you made to fix that problem and you'll repeat this cycle over and over again until you look back months later, stuck on the same issues, hopping around from method to method. I don't want to drag on, so let me just share an exercise I think is extremely important for traders to implement: Make or find a very basic plan. Sometimes even finding a plan that barely works or even doesn't have an edge is effective. Follow those rules for 1 whole month without breaking a single rule, forget the outcome. This simple 2 step plan most will say they don't have the time for, but will waste years going around in circles making no progress. When I did this about 4 years ago, everything changed. I could go and slowly improve my strategy because my foundations were strong, I was focused entirely on my processes (backtesting, journalling, self review, ATA), not the outcome. I really hope this helps you because it's always the ones who see things like this out that achieve results the fastest, your rush to "success" will blind you to it and keep you chasing the holy grail which doesn't exist. Let me know if you have any questions !
Education
by sampsych
1
Going Long from a support zone aiming for resistance.I’m just made a demo account after taking about a two or more months from trading. I took the ftmo challenge and I passed the first step but I failed the verification. @baileythebarber I’ve known about trading for about five or more years and I’ve made money and lost money but I’ve never gotten to making money consistently and seeing six figure days. I’d like to make thousands a day and five figures would be great a week I really want to make large sums of money on a weekly and daily basis from trading. Even making cash money from other business ventures. Blue hundred dollar wads of money stacks in my pockets paid getting paid and experiencing the power. money. This trade idea is based off quarter theory trade on the gbpusd 7/8/22 12:56 am Buying from support at 1.2000 large quarter point. Stop loss below the close price of 1.9087 Take profit at 1.21958 I trade from the body of the candles, not the wicks, I think that’s where the liquidity will began and I like to be out early as possible in my take profit ranges, especially if I have a good risk to reward ratio. Let’s see how this one goes and if I’ll remember to come back to this idea. I’m working on being consistent.
Long
by Baileyfx
Eurostoxx Ultimate Pivot PointsReading charts is just one part of trading a bear market, another highly significant part is a solid understanding of market psychology, heuristics and biases. Having spent 14 years in a QE fuelled bull market where there were few inexplicable events and certainly no major forced liquidation events, it is easy to understand why so many participants get so excited about two days of asset flows out of commodities and into tech names. Yes, the market can go higher from here, yes it can go lower, but calling a major bottom and repeatedly getting attached to these short squeezes is all part of the psychological conditioning that has been happening to many over the last 14 years. Therefore we would suggest waiting for extremes where there is nobody else left to buy or sell, this is where the odds are stacked firmly in one's favour. Patience. Discipline. And more patience.
TVC:SX5E
by Newcomb_Analytics
A little something to help others beginners market is in a gully new retail traders are coming to trade let me tell you something important even if you know technical analysis that is not enough what you need is a proper risk management rules and get rid of all your psychological issues I suggest that if want to become a trader first thing you do is work on your psychology only books will not help you in that you need a mentor who will guide you in developing a system and help you understand different types of market and help you make no mistake in executing your system lots of people have system but they do not trust there system and because of that they lose money always have learning mindset it will help you because market trends always change
NSE:HDFCBANK
by mehandijafriboyandyoukick
1
Shocking Truths about Trading no one talks about EP1.After 5 years of self-educating myself in the art of trading while undergoing brutal consistent losses, these are the truths that set me on the path of surprising consistency after internalizing them.....I hope it will for you guys and give more inspiration to the already consistent ones. Shocking Truths no one talks about in trading: 1. You may have the best strategy, signal provider or learned everything about trading, but what counts is what happens to that knowledge 5 seconds before pressing the buy/sell button. 2. What is Mathematically optimal is Psychologically impossible. If you have a strategy that gets wins of 25R but has like 12 losses in a row, DUMP IT. Mathematically, you will make money at the end, Psychologically you will quit before you take trade 13. 3. You start winning in trading when you believe you can lose (Trading Paradox). Consistently profitable traders have one thing in common: they place their next trade like it was already a loser. 4. Extremely good analysts are most often bad traders....you can be right about the direction but fail in the critically important aspect of Entry timing and still lose the trade. 5. IT IS THE SIMPLE THINGS THAT WORK!. Most people will tell you to look for complex strategies that look for "Random walk algorithmic discrepancies that rhyme with Chaos theories....and all that blah..." But I have been on that path and I hate to break it to you that a guy/girl using only support and resistance and simple moving average crossovers with a verified and bactested edge and discipline will most likely be more profitable. 5. THE MORE OBVIOUS A TRADE IS THE GREATER THE CHANCES YOU LOSE IT. Most people think that if a trade has soooo many confluences it is more likely to work....well that might be true to an extent after which it is a blatant fallacy. From historical data and my own personal LIVE trading results, the probability of a trade working out reduces DRASTICALLY when the number of confluences crosses 5. I theorize that this happens because market makers will see all the orders placed at that point is soo much(cause everyone will see the opportunity with their different approaches) and take them all out. 6. No one can sell a money printer, cause it has no price. If someone offers to sell you a robot or STRATEGY that triples your money every month, laugh and pass, if you don't and end up buying that....you deserved to be scammed. Think about it the person can just take $100 and apply his/her magic to it and print out Elon Musk's networth in lower than 3 years using compounding......and he/she will sell you that for $2000?, you must be kidding me!. 7. Your consistency has nothing to do with your strategy but your mind. I can bet you my life's earnings, that there is someone out there, using your exact entry and exit rules but is profitable and you are not. A better strategy brings in more profit, but any random edge with the right mindset and risk management MUST be profitable. 8. Almost everything in life is a pyramid-scheme, & survival of the fittest and trading is not left out. No matter how much we desire to the contrary, it is IMPERATIVE THAT TRADING HAS MORE LOSERS THAN WINNERS. The winners in trading have to be relatively fewer cause they win a lot and hence they need soo many losers to give them that money. There is no bank that hands at money to you when you win, your job as a trader is to outsmart some other fellow and TAKE his/her money and once you come to terms that every dollar lost by you trading, is a dollar gained by someone else in this zero-sum game, you will realize only YOU has got your own back. 9. You can NEVER completely eliminate emotions in trading but you can set rules that allow you trade only when you are at your optimal state, and gives you a day or two vacation when you are down. 10. Reading this article will definitely NOT HELP YOU, it is remembering it the moment before you place your next trade that will. Pls LIKE and Subscribe, I want to know what you think about this article and which point you agree with the most or disagree with. Tell me whether it helped you in any way and if we get 50 likes and 20 comments I will consider making the next episode.
BITSTAMP:ETHUSDEducation
by LexyenHille
3
Don't worry there will be many more opportunities!sometimes you dont get what you give or what you are expecting! ive been looking this chart for few weeks now and i was expecting a nice trade from this, i did what i had to i read the chart understood it, and made a decision to look over the price and the structure that i drew. and after these days of analysis and studying the idea i had for this market didn't do what i expected. that also happens during our course of life, you want to see the things as you wish but they dont go that way. THATS NORMAL! JUST KEEP ON LEARNING FROM EVERY SITUATION, EVERY UPs & DOWNs, DON'T BE FOOLED BY THE CONCEPT OF RESULTs AND WININGs JUST GO WITH THE FLOW. LOVE THE PROCESS. and you'll sure find satisfaction.
TVC:USOILEducation
by lofitrend
Don't let the dopamine get you 🥴Do you feel excited? 😅 This is why. It's all down to the chemical reaction in your brain. Dopamine. Dopamine is a chemical in the brain that makes us feel good. Should you be feeling excited when trading?🤔 No.🙈 As this isn't gambling and shouldn't give you the same dopamine rushes like a gambling win does. What's starts as initial excitement will move to fear, anxiety, stress and excitement again. 🤷🏻‍♂️ You become irrational and unable to stick to your plan.🤯 Entering trades through boredom for the 'rush' and closing profitable trades too early because of fear of the profit disappearing - all because you risked too much for that 'buzz'. 'So what can I do about it?' I hear you shout loudly....📢 Well this depends on if you really want to change or not, the downside is you'll think you will make less money .... Think about it - you have a £5000 account right? Option 1 - you trade 15 pairs at 0.5 lot size and your account is up and down like a yo yo - but it's exciting right? Option 2 - you trade 3 pairs at 0.01 - your account movement is marginal. Option 2 is less exciting for sure, but if you want excitement go and jump out of plane. Option 1 will eventually lead to a blown account. Option 2 will give you sustainable consistent trading - you'll let your winners run and you'll lose less on the losing trades. A win win. Only when you get this bit right will you start to see positive change. Emotional control is key Be present doing other things without checking your phone to see how trades are going. Exercise patience by sticking to your plan and letting your trades run instead of closing them early. The only thing you can control in trading is YOU Just don't end up letting the dopamine take control! Have a good weekend everyone and thanks for looking Darren👍
Education
by pow_removetheguesswork
5
The reason for the stagnation in tradingMany times people trying to reach a new level face an invisible obstacle in their business. At that moment, life turned into a routine. It seems to us that there are no changes in life and there is no way forward. This is quite unpleasant. In those periods when it seems to us that our development has stopped, we become unhappy, because, after all, progress is the key to happiness. There are three reasons why we feel like we're marking time, and sometimes it's a combination of these three reasons: 1. Your physical condition Poor physical condition can increase negative emotions. Sports activities cause positive emotions. When you are physically active, you change your mental state and destroy your negative model. Thus, maintaining a good physical condition will cause positive emotions, which is one of the key ways to get out of stagnation. Develop a positive state of mind and get rid of all the negative by changing your physical condition. 2. Time limit One of the reasons we think we are stuck in one place is excessive attention to the past or the future. But constant thoughts about the future or the past will not change anything. As you know, the past cannot be changed, and the future is unknown, so there is no point in worrying about them. We have the right to change only the present, that's what we need to focus on. Stop flying in the clouds of the future, stop suffering because of the past, get busy with the present. 3. Sitting on the plateau Why do some people make breakthroughs that take them to the next level, while others can't? What is the difference between a master and an amateur, a creator and a speaker? The first dig deep to find an answer that will help them overcome stagnation, they do not stop fighting and searching and eventually achieve goals, reaching a new level. 5 signs that bring you closer to a breakthrough 1. Routine. You're tired of everything. You are tired of your financial problems, tired of your boring job, tired of carrying an extra 20 kilograms. Everything annoys you and you want to change something. 2. Unsatisfied. Whatever you do, it doesn't work for you anymore. Maybe it is unprofitable or uninteresting. Or maybe you are tired of the lack of energy, which, in your opinion, is necessary to achieve the desired result. Perhaps your current method has been successful in the past, but it is not suitable for your current conditions. 3. Border. This is the moment when change is needed. If you are on the verge of bankruptcy or, for example, if you have serious health problems. This is the point of no return, you are on the edge of the abyss and all you have left is to take a step, make an effort to become better and reach a new level. 4. Insight. You are illuminated by an idea or a deep understanding of something that opens up a new world for you. You begin to see the world in a new way, you have found a goal that can help you get out, your eyes are burning. 5. Open the door. The door opened... You enter it. At this stage, you will feel a surge of strength, realize that everything is not in vain, and you will want to move forward with great enthusiasm. Do not give up, do not stop, study. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
12
FrogAlgo: 5 Simple Ways to Control Your Emotions in TradingThe markets are emotional and so are the people who trade them. But that doesn’t mean you have to let it affect you. Instead, learn how to control your emotions and make more money. Here are five simple ways you can control your emotions in trading and make more money. Don’t let your emotions dictate your trading It’s important to remember that your emotions are a part of who you are as a person. But they’re not part of who you are as a trader. Nothing in trading requires you to let your emotions dictate your trades. The best traders are in a state of flow — a state of complete absorption where nothing else exists except the task at hand. In a state of flow, the only thing that matters is what you’re doing. It doesn’t matter if you’re in a down market or a strong bull market — if you’re in flow, you can’t be affected by the outside world. You can’t let your emotions get the best of you and make bad decisions because you’re on autopilot. Set a threshold for when you’ll trade When you get started in trading, you’re going to have a period of time where you’re emotionally charged and feel like you have to trade every day. You might have a specific time period where you’ll only feel like trading when the sun is out and the markets are up. If that’s the case, then trade when you’re in that “charged” time period — but set a threshold for just how “charged” you’ll get. Let’s say you only feel “charged” from 9 am to 12 pm — set that as your trading time window. You’ll still feel “charged” enough to trade, but not so “charged” that you make mistakes. Train yourself to be aware of your emotions The best traders are in a state of flow — a state of complete absorption where nothing else exists except the task at hand. In a state of flow, the only thing that matters is what you’re doing. It doesn’t matter if you’re in a down market or a strong bull market — if you’re in flow, you can’t be affected by the outside world. You can’t let your emotions get the best of you and make bad decisions because you’re on autopilot. The best traders are aware of their emotions. If you don’t know what you’re feeling, you can’t let your emotions get the best of you and make bad decisions. The more you know about your emotions, the more in control you’ll be and the more money you’ll make in the markets. Know the difference between a trade and a position In trading, every position is a trade. It’s just a matter of how much money you’re putting at risk. The most important distinction is between a position and a trade. If a trade occurs when you risk a set amount, a position just happens when you risk an amount that’s less than what you’re long or short. What’s important is that you keep track of both your position and your trade. You might think a trade is only 1 or 2 shares. But if you end up adding to that position, then you actually have a position that’s thousands of shares. Your position is what you have, but your trade is how much you risked. Find a good trading mentor The best way to learn new skills is to have an expert show you how to do them. Trading is a lot like golf — you’re better off with an experienced teacher than trying to learn from reading books. A good mentor is someone who will help you build your skills as a trader. They won’t just tell you what to do — they’ll show you how to do it. They’ll help you develop the skills of patience, discipline, and the ability to be in the market even when the market is not in your favour. A good mentor will also be someone who shares your same passions and interests. A good mentor is someone who shares the same passions as you — someone who likes the same things you like. Being in the same place in life helps — but don’t let it stop you because it’s the best way to learn. Conclusion Emotions play a big part in trading, but they don’t need to dictate your trading. The best traders are aware of their emotions and know the difference between a trade and a position. They also find a good mentor and use them as an expert to help them build their skills. When you control your emotions, you’ll make better decisions in the markets and increase your profits. And the best part is that once you have the skills, you can trade anywhere in the world.
NYSE:SNAPEducation
by A1TradingHub
30
What to buy and how to ride the commodity bull?Discussion: 1. Example on Natural Gas - breaking away from its range 2. Beginning stage of a “Growth” stage 3. Identifying and trading in its uptrend with multiple timeframes Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
NYMEX:NG1!Long
by konhow
5 Reasons for and against trading forex 🤷‍♂️They make it look easy, posting lifestyle posts all over your Instagram feed.⠀ ⠀ Truth is, that's not real. 😒 Sorry.⠀ With that being said lets break this down into reason you should and shouldn't trade forex. The reason I'm covering this as a forex idea is I am predominantly a forex trader and made my way to where I am trading forex. This however does apply to any trading you might be thinking of getting involved with. So lets get into it👍⁠⠀ FIVE REASONS NOT TO TRADE FOREX 1. Can you afford to lose money? If you cannot afford to lose money or you are desperate to make money then this really isn't for you. Only trade with money you can afford to lose. If you are trading with money you really need to survive then your problems are about to get a whole lot bigger! 2. You don't know what you're doing! We have all been there at some point of not knowing what we are doing. But before even considering placing a life trade focus on learning and developing strategies. Focus in on the process and the desired outcome will naturally happen. We live in a world with so much resource and information at our finger tips. Go do the research before getting in to deep to quickly. 3. You can't handle it when you're wrong or you're losing. You will be wrong at times and that's okay. So long as your winners cover the losses. You also have to handle and learn that no matter how good of a strategy loser runs and periods of draw down happen to every trader. No one can be 100% right all the time. 4. You are risk averse. In any form of trading you are taking a risk. If you are to risk averse then it's really not for you. Risk management is key but if you are to averse trading wont fit your personality. 5. You don't have time. A lot of people say they want this and then say time is a factor stopping them. That's fine if you either make time and sacrifice or simply forget about trading. If time is precious and you really don't have time due to important life commitments then focus in on them. If you spend all your time on PlayStation and Netflix and say you haven't got time. Well then it comes down to lifestyle choice. We all want trading success few realise how time consuming especially at the start when learning it can be. There are also 5 good reasons why you should take up trading so lets cover them now. FIVE REASON TO TRADE FOREX 1. You want freedom Bored of working 50 hour weeks? Be your own boss take control of your own destiny. It's hard work but when achieved you'll wonder why you didn't do it sooner. Very fulfilling seeing your kids grow up instead of getting in at 7pm as they are tucked up ready for bed. ⠀ No more missing school sports days or the certificates in assembly.⠀ Time for more golf maybe? ⠀ Remember to do it for these reasons and not a big shiny Lambo. 2. You have learned the basics and understand the upsides and downsides. It's crucial to get educated and then still understand you will have up days and down days in trading. Don't even trade until you are emotionally sound with all possible outcomes when placing trades. You understand what is required along with being aware of the positives and the dangers. 3. You can deal with a high risk environment. You understand the risk at stake but above all else you understand and practise good risk management. Anxiety, worry, stress, not sleeping, losing money - I could go on.🤦‍♂️⁠⠀ If you're feeling any of the above you haven't ticked the box on this one. If you don't feel any of these you on the right path. 4. You are patient and will persevere. We all want that quick money. Social media makes us think it's easy Fast money fast cars, trips to Dubai. Commitment patience and dedication are the most important traits in trading. This is not an overnight success game it takes time and will to learn the skills needed. If you haven't got patience or commitment don't even bother. So much more to this than just placing a few trades on your tea break. 5. You can stick to a plan and understand probabilities. Once you have a plan that you have tested and take confidence in, understand probabilities and stick to it. If you're hoping from one thing to the next with no real time spent on one plan you not got the traits needed. If you understand probabilities and can let a proven plan with a known edge play out then your on the right track already. FINAL THOUGHTS Most fail - the common denominator in the ones that make it work are they don't quit.👍 Simple as that.😎⠀ Trading isn't for everyone. 🤯⁠⠀ ⁠⠀ Yes, there are upsides for sure - I touched on them. ⁠⠀ But it can be f**king horrible. 😢⁠⠀ The negative emotions when trading can hit hard. ⁠⠀⁠⠀ That's not how trading 'should' be or feel, but its still a reality for a lot of traders.⁠⠀ ⁠⠀ If you're chasing money, if you're desperate to make a quid or three - don't do it.👌⁠⠀ ⁠⠀ This isn't the game for you.⁠⠀ ⁠⠀ There is simply no room for desperation - it will quickly find you out.⁠⠀ If you can get emotions on point and a proven plan however the upsides are massive. The key here is knowing to grow and get to where you want to be will take time. ⠀ If you had more time doing whatever you wanted each day, that's pretty cool right?🙌⠀ ⠀ Going on holiday whenever you want - like tomorrow? Just because you can.⠀ ⠀ Or just chilling in your garden on a nice day ☀️⠀ ⠀ Whatever floats your ⛵.⠀ ⠀ Time for you? Prioritising your health and fitness because you have never had time before?⠀ ⠀ Exactly - the benefits are endless. But be ready to put the long hard miles in to get there and make sure you're doing it for the right reasons. ⠀ ⠀ Also, the cost to start this is like no other 'business' you could go and start.⠀ ⠀ No stock, no big start up costs - just you and your initial deposit. ⠀ ⠀ However big or small that may be it doesn't matter.⠀ ⠀ Learn to trade properly and there are now a wealth of funded trader programmes that can give you the freedom you crave without you having to save up for a lifetime. Focus on getting your process right and then enjoy the inevitable outcomes. Thanks for looking and enjoy your weekend. Darren 🙌
Education
by pow_removetheguesswork
1
4 Steps To Become A Confident TraderIf you lack confidence in ability as a trader I am here to encourage you. Being a forex trader can be hard, but when you learn the steps it takes to become confident in your abilities it can become more simple. In this video, I am going to give you the 4 steps I give to my clients who work with me for 6 weeks in our 1 on 1 sessions. I'd love to know if you've been struggling in this area and what questions you may have to help you overcome your struggles. Write them below and let's chat.
by ShaquanLopez
8
New To Trading? Avoid These Mistakes!Starting out in trading is definitely an exciting experience but you must be very careful not to make these dangerous mistakes that most beginners make. While there are many dangerous mistakes for forex newbies to make, I’ve highlighted the two that are subtle enough not to be noticed but can have a big influence on your trading career. 1. Undercapitalization Insufficient initial capital is the first mistake by beginners, and it usually ends up killing them. I’ve seen traders, including myself, blow their whole trading account during the first month or week. Your trading capital is lost even before you have the time to properly learn to trade. This is what usually happens to new traders: They don’t have sufficient trading knowledge and experience. They are not familiar with risk management principles. They underestimate the risks involved in their setups, which leads to impulsive and often expensive execution. Another habit I’ve seen among trading newbies is using tight stops on small lots and even smaller trading accounts. Using small trading lots is not a death knell for newbies’ accounts but using small and tight stops might be. By using short and tight stops, you increase your chances that the stops will be triggered more frequently and your total loss will consist of many small losses. Your trading account should be as large as possible in order to correspond with market conditions and provide the necessary flexibility in making trade decisions. Position size matters, too! Like any business, you have to make sure you are adequately funded. Don’t try to lower risk by only depositing a portion of your available trading capital. Fund yourself right but use proper money and risk management! 2. Overtrading Overtrading is a process of buying and selling Forex pairs, stocks, or other securities excessively. It involves trading all-day without stopping and eventually, making ineffective decisions that lead to financial ruin. Considering the typical market activity, it’s easy to lose half or even all your trading capital with this. This problem is sometimes directly connected to boredom, the thrill of making money, or lack of education and guidance. Your trading capital is used to earn money. You should treat each dollar like a newborn baby. Your first and foremost responsibility is to protect it. If you lose it, you have less to help you earn money. Have you ever made any of these mistakes? Please share your experience in the comments below. I’m sure we’d all be interested in possibly learning from each other. What additional advice would you give to a newbie trader?
Education
by BKTradingAcademy
📌Position Sizing AND Stress CurveTry to find where your current stress level is on the diagram. If you are a trader and already have taken position , how much is your position size % ? Do you think there is a correlation between your stress level and your current position size , then subsequently your performance ? If you are in red level, now is a good time to seek some serious change. Trading in itself is a very stressful job, especially when we are not proficient in the psychology of trading and do not pay much attention to the important rules of risk and capital management. maybe Slipping only one 1% of these rules has terrible consequences for us. WHAT IS STRESS (in general)? Everyone experiences stress at different points in their life, and in small doses it is essential to motivate us. Too much stress, though, can be overwhelming and leave us burnt-out, filled with anxiety or anger, and unable to act. Stress is a feeling of emotional or physical tension. It can come from any event or thought that makes you feel frustrated, angry, or nervous. Stress is your body's reaction to a challenge or demand. In short bursts, stress can be positive, such as when it helps you avoid danger or meet a deadline Stress causes wear and tear of our bodies due to demands made by our life. The Public Health Services estimate that there are one million premature deaths in America each year. In this, 75% of the people were suffering from stress-related disorders. Americans are suffering from various problems. The number of Americans suffering is high in number. The various problems are: 30 million blood vessel diseases 1 million heart attacks 8 million cases of ulcers 12 million cases of alcoholism WHAT DOES IT FEEL LIKE? Problem stress can manifest in many different ways: wanting to relax but being unable to let go feeling prolonged anxiety or worry feeling depressed and unmotivated sleep problems increased use of alcohol / drugs to self-medicate Stress can also cause a variety of physical symptoms: change in appetite tightness and pain in shoulders, neck and back increased use of alcohol / drugs to self medicate digestive problems autoimmune problems (eczema, arthritis, ulcers) Trading-Specific Stresses: In the above paragraphs, we have seen the different stress subsequences in our social life. But there are also many stressful situations in trading that traders perceive. Trading is inherently a job full of anticipated and unforeseen risks. .Each of which can cause stress on the trader and affect his performance! Even Being idle and not doing anything can also be stressful. The fact that you could make money if you were present in the market is itself very stressful. You can watch your position double overnight sometimes if you don’t do anything. Similarly, you may sit on a losing trade while it goes down in value. This loss situation is stressful, which is a result of doing nothing. As a trader ,we trade the risk to make money , it sounds very exiting and enjoying when we can control our risk and profit ! there is a tiny distinction and span between successful traders and unsuccessful traders ! When they can manage their position size and risk/reward in such a way that they can have the most profit and the least loss with maximum performance. abnormal Stress limits our ability to handle a large amount of information in trading. Which is why we are not successful most of the times. For some traders who use to trade with big position size( more than1%- 5% of their total net) , stress is equivalent to losing. If they suffer a lose In these cases, because a large amount of position is involved and it is difficult to control it can be the Biggest in the speculative loss, which is a trading-specific stress. Since losses are unacceptable for many, they tend not to close their position in the hope of recovering their losses , so their losses will get bigger and bigger . The psychological impact of a large loss upon an average trader can be devastating, because Daniel Kahneman in the book of Thinking, Fast and Slow by , he says that for human- being the impact of any loss is bigger than impact of equivalent profit ! -In a pessimistic scenario ,Suppose you open an average of 10 positions a day, and if all your positions are closed at a loss >>With a risk of 1% per trade; You do not lose about 10% at the end of the day >>But with 5% per trade, you lose more than 37% at the end of the day >>And with 10%,you lose more than 60% of whole capital after 10 unsuccessful trade per day . So in the same proportion; Size position can greatly affect our stress level and disrupt our performance! In this situations, our brain can no longer make any right decisions and emotions overwhelm us especially when we are at a loss, and then the likelihood of committing human error is greatly increased. Conclusion So in this article, we can figure out what can greatly affect our stress in trading is the amount of volume in a trade especialy in perpetual future markets , Why does a trader increase the position size with thoughtless, recklessness and carelessness, maybe it is due to ignorance or maybe it is high self-confidence. Anyway, if one can 100% predict the future trend of a trade, one might be able to earn hundreds or thousands or even millions of dollars in a short time with the Leverage X100, but the problem is that we are in the trading and financial markets with probabilities. We are dealing and no one can predict even 10% of the next moves with confidence. So It's so important to control the exact amount of your risk ,loss and possible profit in each trade by choosing the right amount for position size and then the risk /reward ratio. Every person reacts to stressful events differently. What might be stressful for one person might not be stressful for another one or maybe a pleasurable game . All these together produce fear and anxiety in people. The purpose of this article is not to let you know various types of stresses in trading , It was more about the stress of position size in particular and how it can affect your trading style. But the result being in high stress level for all is loss in trading. You can at least now realize how dominating stress can be. In coming articles, we will help you protect from its effects. You can self-evaluate yourself on parameters like stress susceptibility, stress exposure and stress protection. In general, we will try to reduce general stress and trading specific stress. Later we will also discuss stress prevention techniques, relaxation procedures, and how not to allow stress to affect your trading performance. (The reason that inspired me to write this article was mostly because of a friend who is a trader and he had invested in Luna and was severely bankrupt and now more than his financial problems he is struggling with a lot mental and psychological problems , and was asked me for help. Maybe it was his bad luck but his problem was when He was optimistic for a immediate recovery after any Luna's downfall , he traded in a large position and with every further reduction he bought again at a lower level in the hope of a return to compensate, but we all saw how far Luna decreased . although this strategy( DCA ) may work well sometimes , but if he had considered the position size and risk measurement , he didn't lose more than 200k overnight.) Source: lifehack.org- wetalktrade.com- phil-hills.com
Education
by PRO_SMART_Trader
3
Three pillars of trading success 📈💲It's time for my mid week educational post. Today I want to talk about the three pillars needed by all traders for success in the markets. This isn't just the forex market either this applies to trading all financial markets. Be it forex, crypto or stocks, so lets get into the the three pillars of success. PILLAR NUMER ONE- STRATEGY You MUST have an edge before entering the markets. When will you enter the market? When will you close? What % per trade will you risk? What pairs will you trade? What timeframes will you trade? If you don't have any answers to the above you are entering the markets blind and it will end in tears. In trading, edge is your ability to select trades that perform better than random. You can think of edge as the process used to generate and execute entry and exit signals. Do not enter the markets until you are working a strategy with a proven edge. The stronger your edge, the more profitable you’ll be. PILLAR NUMBER TWO- RISK MANAGEMENT We can't avoid the white elephant in the room on average 80% of trader lose money or fail in the markets. Some say its even more and you will become one of the stats if risk management isn't applied to your trading. Some of the reasons losses like these exist in trading is down to the fact that aspiring traders don’t put any thought into their risk management tolerance. We only ever see the upside when we start out and many never do anything to protect themselves from potential losses. If you never made any money as a trader before or entered the markets before ask yourself the question below before starting out. How much money am I comfortable losing? Your first priority with trading is to stay in the game So manage your risk per trade and total risk at anyone time. Understand probability and ensure you are comfortable with your maximum exposure at any one time. Understand the maximal draw down in your testing when finding your edge. That way it will help you see what a potential losing run you could experience. PILLAR NUMBER THREE- TRADING PSYCHOLOGY We need good trading psychology to keep a balanced mind whilst trading, this stops your emotions leading the trade. The trade outcome cannot be controlled and you MUST detah yourself from each trade outcome. You will know when your trading emotions are nailed on when you do not 'FEEL ' anything when trading. If you have 'emtions' with your trades or when trading simply reduce your risk further. Two emotions that need particular attention are GREED and FEAR. You need discipline in controlling these two emotions or you are going to end up making losses as a trader. We all been there we make a few profits confidence kicks in and then greed before you know it your in whole world of pain. We all be there at some point with fear to and not executing trades due to a fear being in our trading game say from a poor run of form. Emotions will always be there we are emotional beings, but they will need controlling in order for you to be a successful trader. Practice developing the emotional control needed to trade successfully. FINAL THOUHGHTS Trading requires 100% commitment most see it as a hobby to start with but this can be costly hobby if commitment to trading is lacking. The sole reason most get into trading is to make money. One purpose of a business is to make money. Treat trading as a business at the end of the day it's your personal money that's on the line. Every trader needs to have a disciplined approach to the markets. Following these three steps will help you. In order to be a successful trader and run a profitable account, it is essential that you have these three pillars in your trading. Thanks for taking the time to read my idea. Darren 👍
Education
by pow_removetheguesswork
1
Confirmation bias in trading, why 99% crowd drain deposits?A lot of material has been written on the topic of psychology in trading. Especially often you can stumble upon unpretentious articles on the Internet, where the author, like any self-respecting “psychoanalyst”, is trying to talk on the topic: “Why are deposits being drained”. And everywhere, as if according to one learned pattern, they write about fear, about greed, about the fact that one should not sit out losses, one should allow profits to grow, one should put stop orders, observe risks, keep a diary, work according to the system and other banality, oh which everyone has heard. Our idea is that in trading there can be only two options - either you know what you are doing and then just systematically work on your trading setups, or you don’t know and just play “guess the tune”. Unfortunately, most traders are bright representatives of the second category. A typical beginner's decision-making scheme: open any instrument, choose a “convenient” timeframe, try to draw a line, throw in a couple of indicators, and then sit and carefully watch the price... Many people call this self-hypnosis “market analysis”. And then something happens - the price goes down sharply and we begin to "see" the entry point for the purchase - now the price will return, it always rolls back. Click on BUY, choose a fatter volume in order to earn more - the deal is open. We sit, tremble, wait for the price to rise and... oh my God, the market gives us 2 points of profit! We cut profit immediately. We repeat this operation N times, and when the market does not give immediate profit, we average it by the same volume. The account sometimes goes into a small drawdown, but this is not terrible, in most cases the “system” works like a Swiss watch. Having calculated the profit, we already imagine ourselves as millionaires and market gurus. But suddenly the moment comes when the system gives a small failure - we see a drawdown of half an account, the price continues to fall down ... What to do? We go to analytical sites, feverishly read reviews, especially lingering on those that say that the market is oversold, somewhere near a strong level, we are waiting for a reversal. Having calmed down a bit, we look at the sentiment and see that 85% of traders are also buying ... phew, the majority cannot be wrong! After reading the analytics, looking at the sentiment, we return to the chart. Looking at it from a different angle, we make an expert opinion - no, it definitely won’t go lower, now let’s turn around. We add to the rest of the margin and, with bated breath, look at the monitor. And then, unfortunately, the price stubbornly ignores analysts, the market goes further down, and our trades are closed by stop loss. There is no limit to disappointment, how is it, everyone predicted a reversal, and the chart is moving further along the trend! This is the so-called confirmation bias. When we act not according to a pre-arranged plan, but for good luck, we are looking for confirmation of our innocence in every possible way and completely ignore the opposite information. From this, the main conclusion is - if you are not sure, do not play! We need to be open to the perception of all the information available, and not just the one that “suits” us. Only a systematic approach can defeat cognitive distortions!
AEducation
by Crypto4light