The Five Psychological Moments of Losing Money and the Behaviors and Mindsets of Successful Traders

The Five Psychological Moments of a Loss

To finally overcome those harmful emotional reactions and help us establish a beneficial trading response system, we must find loopholes in our own operations. Go back and review every operation of your own, whether it is successful or failed, find out the pattern from it, discard the failed pattern, and repeatedly strengthen the successful pattern. This is the basic method to establish a correct trading psychology.

1. The first psychological moment of loss

The number of our trading positions cannot be stabilized. After many consecutive successful transactions, many people often increase the number of positions held in the last transaction, but often at this time, irreparable losses occur, not only eating all the previous profits, but also bearing The blow to the ledger loss. ... ... Summarizing the reasons, we found that when we invest a small amount, we are clear-headed and more meticulous in the analysis work, but one or two successes often dazzle our minds, and adding more positions at will further expands the risk, and the trading position The quantity cannot be stabilized, which is a source of failure.

2. The second psychological moment of loss

Long-term short-term trading is a more dangerous trading mentality, and it is also the main reason for huge losses. If we look back at our trading history, we can see that in many cases, we have a terrible tendency to turn losing trades into long-term trades. Although our original intention is to recover the loss, this kind of behavior always expands our loss... The stock may be locked up for 5 years and then unwind... In the trading of warrants, once we commit this Wrong, the result may be devastating, because the warrant may expire out of the price in half a year, and all your investment will be wiped out! Remember, if you make a mistake in warrant trading, you can only stop the loss, and you must not wait for the set to be resolved, let alone increase the position as the price goes down to spread out the cost!

3. The third psychological moment of loss

Another wrong mentality that affects our realization of profits is short-term long-term trading. Experience tells us that usually, the main profit comes from the grasp of the medium and long-term trend. ...We often ignore the big trend because we pay so much attention to a little bit of small changes, and many trades that could have been big wins were closed just like this...

4. The fourth psychological moment of loss

Whether it is "taking an elevator" or "riding a roller coaster", it is a common problem for traders to be able to buy or not to sell. We spend far more time analyzing entry timing than exit timing. The lack of a clear exit strategy makes us often at a loss when facing a decline, that is, when we need guidance the most...

5. The fifth psychological moment of loss

The price of impulse. Instead, they find themselves repeating destructive trading patterns over and over again, and even when they are aware of it, they seem unable to control and change these patterns.

Behavior Patterns of Successful Traders

Anyone can be a successful trader if you put your mind to it.

However, many people seem to be more willing to achieve this goal by improving their operating methods, but the experience of those who are truly successful tells us that psychological factors are more important than methods...

The first step we have taken is to establish a stable trading model.

However, after finding out the profit model, it is not easy to implement it stably. Most people, although they know the method of stop loss and stop profit, they can't insist on doing it in daily trading...their own is the worst enemy.

To this end, the second step we take is to create a transaction log. This log is not to record profits or losses, the point is to see if you are acting according to your trading plan.

The Mindset of a Successful Trader

The reason for a successful trader's success is not that his analysis skills are relatively high, but because he is more able to control his emotions. To be successful, he must learn in three aspects, namely beliefs, psychological states and psychological strategies.

After analyzing a number of successful traders, psychologists found that these people believe that money itself is not important; they don't care about losing small money; The important thing is that before they enter the field, they firmly believe that they will win.

Great traders will still suffer from multiple stop losses, but they know that if they do it the right way, they will be winners in the long run, and the price of a few small stop losses will always capture a big trend.

In terms of psychological state, on the one hand, we must reflect on ourselves, and do not complain about the market, analysts, insider trading, technical indicators or analysis methods. If you only complain about others, you may make mistakes again and again. On the other hand, be patient, control your anger, and be neither fearful nor overly optimistic.

Psychological strategies are actually the steps of personal thinking. For example, we establish operating principles (technical graphics or indicators) and use them as the basis for buying and selling. When these technical graphs or indicators appear, the correct psychological strategy is: the signal appears -> I am familiar with the meaning of the signal -> I feel good and I am willing to operate according to the instructions of the signal. On the contrary, if the reaction to seeing the signal is "may go wrong if you accept it -> feel very frustrated", you are wrong!

In short, if you want to become a successful trader, the most important thing is determination. In this regard, attitude is everything. If a person is not willing to become an excellent trader, then no one can help him. Once you make up your mind to follow the practices of those successful traders, you will find that you will trust your decisions, and the development of the situation will follow your own will.