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How to Become a Better Trader Through Psychology

You'll have to conduct your trades like a trading machine when you're working as a trader, without any emotions or being impacted by the fact that the price has increased so much that you now need to initiate a purchase transaction because the up movement has really moved some pips.

So to trade like a trading machine as a trader you need to transform your psychology. To transform your psychology then you'll require to write down rules which you will follow in your trade plan.

The example below shows how to write the psychology rules

MENTAL STATE/TRADING PSYCHOLOGY

  • Trade without Emotions (greediness, fear, anticipation, impulse, bias, over-excitement)
  • I trade what my eyes see not what I feel.
  • I will be patient.

I Am Not Intended to Be the Trading System

The objective is not about making a judgment call on which trade positions appear favorable and which do not.

My system takes care of that. It has rules I stick to. Don't get lost in price action and invent rules as you trade.

MY JOB DESCRIPTION IS

I maintain patience, awaiting my system to signal either an entry point or an exit point. Following this, with absolute and maximum concentration, I implement the planned trade execution.

Starting trades that aren't part of the plan, doubting the system and not making trades when you should, being unsure and getting in late, or guessing and getting in early are all common problems that come from not trusting the plan and not really wanting to follow it closely.

PURPOSE: To maintain an unwavering, singular dedication to perfecting the execution of my overall trading methodology.

The more you can pull back from how the price moves and watch the market without getting involved, waiting for a trade signal, the easier it will be to see your feelings without letting them control you and mess up your trading.

By establishing trading psychology rules like those mentioned above, you will start to adhere to your trading system, enabling you to trade with the consistency of an automated system.

The more you, as a trader, follow these psychology rules, the easier it will be to trade without being affected by the different movements in the market.

Ensure that your decision to open or register a trade is based on your system's rules and an identifiable signal, rather than reacting impulsively to sudden market movements.

Stick to a strategy, and you trade like a machine. Follow your system's rules. Your trades will profit more.

Shifting your mindset takes work. As a trader, keep following your psychology rules from your plan. Practice until you trade without feelings, like a machine.

To know more about psychology study the following psychology guide

FX Trade Psychology for Traders.

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