Recently, they move in psychology professionals high-performance, in order to raise their performance to the next level (best). Athletes and executives were promeletimenis and now includes psychology to ensure that there is nothing "instruments" means preventing their improving their performance.
Trading psychology, brought the common acceptance of Dr. Van Tharp Van Tharp, a clinical psychologist and trader decided to combine the two and to reach a whole new way of looking at and improve the performance of the trader.
Trading psychology largely deals with the emotions that disrupts the ability to negotiate, and especially negative impact on the execution of transactions. These are largely concerned about performance issues, draft trader fears of failure that likely impact on the ability to observe the specified transactions.
These stress performance issues can occur when a trader's moved from your demo trading to live trading increases trading account with a psychological level of performance ($ 1,000,000 or 100% for example) or started negotiating a new market.
Big emotions that result performance anxiety is fear and greed.
Fear is a feeling that prevents a trader in a trade in the first place, makes the trader near loses seats before they have hit the predefined stops and close win in front of the profit and distribution goals because of fear that turn it into a loser.
Greed is the emotion that causes traders hold positions more than enough and causes traders move stops away from the price-one of the cardinal sins of negotiation.
How the dealer Shall ensure that its trading psychology is in tip top condition; The two major methods for a trader to manage their psychology set negotiation goals and the development and maintenance of commercial project.
Setting business goals is not just a matter of setting a goal expected profit is easy to say "I want to make $ 1mln negotiation with the next month, but there are other areas of the objectives to be set as well.The trader can set objectives in relation to time spend trading, time spent educating themselves on negotiation and which markets to trade.
The best way to set the objectives is to use the "SMART" goal setting working box. Smart goals are:
SpecificMeasurableAchievableRealisticTimely
Using this system, the setting of target merchants should be easier and writing actually draft objective, would be an easy reference document for the trader to remember.
Successful traders should also use institutionalized commercial plan to limit their commercial psychology issues.A complete business plan includes general system input and output and a money management system.
The input/output system is, as expected, how the operator inserts in fact trade what markets to trade, whether it be long or short price. Most traders use technical analysis on the entry and exit system as needed for "gut feeling" out of the decision. technical analysis is the use of graphs and mathematical algorithms to deduce the voltage and voltage power, support and resistance levels and potential profit targets.
Money management system describes how risk can accept system trader. handling sets where the dealer must place their stop (how the trader is willing to miss a trade) and the risk/reward ratio is defined as required by the system.
Break-away is one of the most difficult aspects of trading money management system trader seeks to simplify this by specifying a maximum loss that will accept the dealer for a trade if the system determines a maximum risk 2% of the balance of the account for the post, the trader will not take will accept to where appropriate stops may be placed in the preferred maximum loss of system and distribution.
The risk to reward ratio helps trader specify where it should be placed profit target is the ratio of profit is expected to accept loss. If the trader is willing to risk 2% of their account and the account balance is $ 200,000, then the maximum acceptable loss is $ 4,000. If the profit is needed to make this trade is $ 8,000, risk/reward ratio of 2: 1 ($ 8 000: $ 4,000).
As shown, using a specified system transactions and money management system, the trader may seek to mitigate issues concerning commercial psychology.
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