Why Shifting Your Habits Will Improve Your Trading
This is quite a crucial topic in which I thought I would share with you guys. It is extremely crucial to ensure your negative habits does not affect your trading, emotionally and financially. There are 4 main habits that I urge anyone that is new to the trading world to immediately adopt and those are…
The habit of discipline
One has to ensure that they are disciplined when trading the financial markets – as the conventional human is inclined to be attached to money due to it’s current purchasing power. Eradicating emotions enables one to be disciplined an also ensuring that the long-term business mentality is always turned on.
Witnessing 4-20% gains in a short period of time can excite anyone that is new to the markets – creating temptations to have a larger stake size than usual, which does not coincide with the 2% risk. This ultimately leads to over-risking their account, which can obviously be advantageous financially – however it ruins the overall risk to reward exponential account size growth flow.
For instance, if one scores 6 successful 2:1 risk to reward trades – that trader is ultimately 24% up for that given week…bearing in mind only 2% is only at risk; meaning the likelihood of a account increase by the end of week overall is high.
Conversely, if one decides to risk 10% of the trading account for an easy 1:1 to secure 10% on each trade – creating them 60%. However 6 wrong trades risking 2% will bring this trader back to square one and 6 wrong trades from the order risking 2% will bring their overall account size to 12%, which is still not bad work for the week.
Now you can discern the difference between the disciplined and un-disciplined trader. Emotions are more attached to the un-disciplined trader due to more capital than suppose to being at risk. The low risk, exponential growth trader can take trades with ease and peace of mind – knowing that he’s trades are secure with tight risk management.
The habit of adopting a fearless attitude
‘’A fearless attitude is the key to allowing your light to shine” – Charles F Haanel
Completely agree with the above quote as removing fear unlocks all the doors you never even knew existed. When carrying out your chart work, viewing the set-ups as opportunity, rather than fear of losing is the correct approach to adopt when trading. Being able to discern opportunity early, and most crucially trusting and believing your own trading set-ups and triggering your market orders accordingly.
At Golden Seeds FX we really go in depth on the history of our monetary system, and how money is created in order to shift our members perspective of ‘money’ itself – with intentions to completely remove their emotional attachment towards it, which as you might expect will enhance the fearlessness and decrease the worry and doubt when in positions.
Fear is a weakness, if certain brokers acknowledge your fear – they can potentially use it against you. Fearlessness is a way of life; it brings out the best in your trading abilities as you are always apt to speculate new ideas, which can contribute towards your prevailing market approach
The habit of adopting a business mentality
Adopting a business mentality in your trading pays tremendous dividends as you are treating your trading account just like your own business – this is usually when one takes trading as a career and it is the lifeblood of their income.
By adopting this mentality, you are more inclined to assess yourself more – which is crucial. You’ll be interested in analysing your performance long term/short term and also what main instruments work best with your trading style. Money management is crucial outside of the trading world, just as it is crucial in the trading world. A business mentality enables one to understand that spending all of your profits every week does not create exponential growth, and one has to use profits for a higher stake size or to expand balance sheet with other assets.
This habit also urges one to normally and naturally risk only 2% of their account as they view their trading account like a long-term business that will exponentially generate revenue.
The habit of staying loyal to your trading set up, regardless of drawdowns.
This is the most important time where discipline has to take place, as all rational thinking fly out the window usually whenever a newcomer experiences a drawdown – the conventional human mind attempts to instantaneously devise ways of bringing that account balance into profits – or even back into equilibrium.
As a newcomer, when a losing trade occurs always remember the profits that the same set up you used yielded you time and time over. Understand that there will be winning trades and there will be losing trades. The technique, strategy and market approach is what counts – have faith in your set up and never fear adjusting it if more information has been discovered.
All newcomers who use the platform ‘TradingView’ will have the ability to connect with other traders who are also on that platform – most of the time they share their trades, their own personal market projection. It’s socially beneficial to be able to share your trade ideas to others, however if that trade set up yielded you a profit and it’s a completely different approach that you are used to and goes against your personality, you should never get comfortable taking their trades as this does not increase your self-reliance.