It is the mindset of successful, professional traders that makes them successful. These traders don’t necessarily have better trading strategies than the average losing trader, but they are infinitely better at executing their trading strategies in a disciplined manner.

The first thing any aspiring trader must do is make the necessary effort to learn the fundamentals of trading: pip values, spreads, order entry, stops, indicators, etc. Trading is a craft and a profession like any other, and to succeed in it one must have a good foundational education. The second step is to settle on a good, sound trading strategy, one that—through demo trading, back testing, or other analysis—you have determined is a strategy more than likely to be profitable overall.

But once you have completed those two basic steps, then comes the part that is most difficult to master—actual trading. It is at this point that most traders fail, not because their strategies are faulty, but because their trading of the strategies is faulty. A large part of becoming a proficient trader is simply engaging in the act of trading; as with any skill, you get better at it the longer you practice it. Initially, trading properly may seem awkward, and you’ll likely make several mistakes (again, it’s just like perfecting any other skill), but in time your trading should become a smooth, fluid action that flows naturally from the rhythm of the market’s movement.

Their psychological mindset is what separates winning traders

You learn, through the continual practice of trading, to focus your attention not on momentary, meaningless market fluctuations, but on the overall flow of the market’s movement. Inexperienced traders often overthink or overanalyze, which often traps them in indecision. But increased experience in trading will enable you to develop a more intuitive feel for the strength or weakness of a market or particular price movement. You’ll develop a disciplined, unbiased focus that will allow you to more clearly discern the importance or unimportance of price action, and respond to it in a calm, confident, logical manner (rather than just taking trades almost at random, and then two minutes later completely changing your mind).

Winning traders know that they DON’T know what the market will do—therefore, they watch it carefully to help them develop an intuitive feel for the market’s action that trading day

Master traders execute their trades in a patient, disciplined manner. They have a set strategy that they trade: they clearly know what their trade set ups are, and they patiently wait for those set ups to appear—and once those set ups appear, they unhesitatingly pull the trigger and take the trade. Let’s say, just for example, that a trader’s strategy is to buy or sell in accord with the long-term trend at the 10 SMA (simple moving average) level. If he turns on his computer in the morning and none of the pairs he trades are anywhere near the 10 SMA, then he knows—and accepts the fact—that there are no trades for him to take at that time. That’s what a successful master trader does. The average losing trader faced with the same situation abandons his trading strategy and impatiently takes some other trade—and sure enough, it usually ends up costing him money.

Master traders know their trading strategies, and they trade in a disciplined manner. They don’t go chasing a market or forcing a trade that isn’t there. They aren’t swayed by impatience, fear, or greed. They methodically and consistently execute trading strategies that they have confidence in. If they don’t have confidence in their strategies, then they develop new strategies.

That is the mindset of a consistently profitable trader.

Successful traders execute their trades in a disciplined, unemotional manner, realizing that some trades will work and some won’t

Successful traders do the work of mastering a trading strategy, constantly learning to improve their trading, updating key levels (like Fibonacci points) on their charts—and then they patiently watch the market for opportunities that arise to utilize their trading strategy. They realize that not every hour, or even every day, is going to present them with good trading opportunities, but they also know that the market will provide them with more than enough good opportunities if they simply wait for those opportunities to come around. By contrast, unsuccessful traders are all over the map with their trading—they chase after markets out of fear of missing something and end up buying the top or selling the bottom of a move; they abandon their trading strategy at the drop of a hat; they constantly pull their stop orders or move them further away from the market, ultimately resulting in larger losses.

When you approach trading with the mindset of a master trader, it improves your trading automatically, because you are relaxed and confident in your trading—you aren’t just mindlessly “hoping” a trade will work. You approach trading confidently rather than fearfully. You’re methodical, not emotional, in your trading. Emotions—primarily the emotions of fear and greed—are the enemies of good trading. Therefore, successful traders have learned to trade in a disciplined, unemotional manner, not allowing fear or greed to influence their trading decisions. It’s very simple really: Do you think you’ll fare better trading a logical strategy or trading on emotion, allowing every tick of the market to start your heart racing one way or the other?

Successful traders have strategies they are confident in, and wait patiently for the set ups specified within the rules of their trading strategies. When their set ups occur, they unhesitatingly pull the trigger and enter the trade

One key element that helps successful traders to be master of their emotions, rather than the other way round, is that they never take a trade that they can’t shrug off. They never risk so much on any trade that a loss will upset them so much that they will be unable to trade well the rest of the day (or week). That loss point is different for everyone, but it’s critical to know your loss point—and then trade accordingly. Never let a trade become so big a loss that it upsets you to the point where it cripples your ability to trade well going forward, like, for example, making you too afraid to take the next good trading opportunity that comes along, because you just can’t bear losing even one more pip. Know the point where your emotions will start to affect your trading, and keep your potential loss level below that point. Never take a trade that you can’t shrug off if it turns out to be a losing trade.

One of the secrets to keeping your emotions in check is to never take a trade that you can’t shrug off

Bottom Line

Successful traders are focused not on every $1 fluctuation in their equity levels, but on whether or not they are executing their trading strategies in a consistent, disciplined manner. They know that some trades will win and some will lose, and that the market will fluctuate up and down. They know that they don’t know what the market is going to do next, and that awareness helps them stick to their trading strategy, rather than trying to outguess the market. They are confident in their trading ability, and disciplined and unemotional in their execution of trades. They don’t know that they will win every trade, but they do firmly believe themselves to be winning traders. They follow the market action and only act when genuinely good opportunities arise to utilize their chosen trading strategies.

Summary:

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Their psychological mindset is what separates winning traders

 

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Winning traders know that they DON’T know what the market will do—therefore, they watch it carefully to help them develop an intuitive feel for the market’s action that trading day

 

P

Successful traders execute their trades in a disciplined, unemotional manner, realizing that some trades will work and some won’t

 

P

Successful traders have strategies they are confident in, and wait patiently for the set ups specified within the rules of their trading strategies. When their set ups occur, they unhesitatingly pull the trigger and enter the trade

 

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One of the secrets to keeping your emotions in check is to never take a trade that you can’t shrug off

 

 

We welcome your comments and questions, and appreciate you sharing this article with other traders.

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writer bio

JACK MAVERICK

Jack Maverick has over 20 years of experience in futures and forex trading, first as a broker and then as an independent trader.  He enjoys sharing the trading wisdom and knowledge he has gained from his own trading experience and from other successful traders.

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