Today we see how to develop traders’ mindsets, and avoid trading mistakes
Before you start your career as a trader in the stock market, you should know that in trading 90% of traders lose their money and 10 percent make a profit. everyone has their own trading setups, yet they lose their money because they do not focus on trading psychology if you want to succeed in trading you will focus on things like trader mindsets or psychology. In this article, you will see 03 trading mistakes that every trader do continuously so we need to overcome those mistakes so you can think like profitable traders.
Trading psychology mistakes.
01. No trading plan
A trading plan means we don’t talk about setups it is all about risk management .you also know about what is your risk per day per week per month. Trading is like a business just like in business they know what risk will come in the future so they are always ready to tackle that situation. Same in stock trading this principle applies so before taking any trade we should decide on certain conditions, if they come we executed our trade, or what is our entry and exit point, what is our stop-loss, risk-reward ratios that all thing comes under in the trading plan. if you have a trading plan so you don’t do emotional trading. so it is important to make a trading plan.
02. Emotional trading
In emotional trading in the stock market, it contains fear, greed, hope. For example, you decided to take a trade because you do some analysis or you heard the news about that stock and you think the stock price will go up so you need to plan your target and stop-loss like the stock price is 100 your stop-loss is 90 and target is 120. most people have not used to their stop loss but if you want to minimize your losses and maximize your profit use stop-loss regularly.
price is not always moving in one direction, do you think the price will go up eventually your stock price came near your stop loss then most of the people change their stop loss in the hope of stock price will definitely go up in next day .due to the hope they forced their investment decision so you need to control your emotion and worked according to your plan to avoid losses.
How to Manage Fear and Greed in stock Trading
Having a clear plan while trading in stocks ensures you stay on track and prevent any feelings that might deviate from the plan. In particular, a good plan can prevent you from being influenced by emotions.
Put Out Your Wealth To Get Rid Of It Quickly
the myth about the stock market you can get rich overnight. However, the fact is that the stock market is a good place to grow your wealth but, over time, only. The market offers better returns than any other investment option, but that takes time. So, if you wish to see your money grow more often, be patient and let your investment grow. Follow your plan, and do not let fear or greed overwhelm you.
So keep maintaining a trade journal and never stop learning from your past mistakes,
03. High expectation
There’s nothing wrong with relying on the ‘best investment in your investment, but you could be heading for trouble if your financial goals are based on irrational assumptions. For example, many stocks have generated more than 100 percent return on capital during recent years.
However, this does not mean that you should always expect the same kind of return on the stock market.