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During the early days, people focused on fundamental factors to make investment decisions. People wanted to see increasing earnings, sales growth, surplus profit margins, and the like. However, there were a few who realized that relying solely on fundamentals was not enough to have superior trading performance. Very few traders used Technical Analysis back in the day, the consensus thought people who make their investment decisions based on the price alone were in some sort of cult.

However, over time, more and more people began to use Technical Analysis as a means to pick and choose their investments. Soon enough, traders all over the world began focusing on price over fundamental factors. Although, there was one more factor that only in the previous three decades has been studied thoroughly; mental analysis, or what we all know as Trading Psychology.

Let us give you an example of a trader who likes knowledge in Trading Psychology. Imagine a newbie trader who’s been having a string of losing trades for the first time. The right way to handle this situation is to scale back and trade smaller as you improve your win rate. However, our newbie trader is angry at the market and decides to increase his size threefold to revenge trade his capital back. You all know what happens next, he blows up his account.

That’s what happens when we deviate from our trading plans and rules and allow our emotions to get the best of us. There are four types of emotions that have blown up countless of trading accounts since the inception of the financial markets, those emotions are: GREED, FEAR, HOPE, and REGRET.

How do you master the psychology of trading?

We’re all unique from one another, so the key to mastering your psychology in trading is to find out your own personal strengths and weaknesses.

Let’s take a look at the Four (4) deadliest emotions in trading. We’ll discuss in a separate article in more detail these four emotions, but for now we’ll enumerate them for you:

Greed

This kicks in when you gain a significant amount of profits in a position. Greed is when you tell yourself that you will not follow your exit plan as the trade exceeds your set target price and you believe that your stock will go “to the moon”.

Fear

There are four types of Fear:

• • Fear of being wrong
  • Fear of losing money
  • Fear of missing out
  • Fear of leaving money on the table

Regret

When a loss or a missed opportunity happens that results to a feeling of disappointment and sadness, a feeling of regret occurs.

Hope

As human beings, it’s in our nature to hope when things get rough. However, hoping for a stock to recover after going below your stops has been and always will be one of the main reasons traders lose a majority of their capital.

Here are some basic points you should consider to improve your Trading Psychology:

Embrace uncertainty

There’s only one thing that’s certain in the markets: uncertainty. You have the engrain in your mind that there’s no sure-win investment. Everything that happens in the market is due to probabilities. We can’t control how the market moves, there are countless factors that are not under our control. That’s why it’s important to embrace uncertainty and focus only on the things we can control. So what are your options? If you want to be guided and get an advanced strategy in your trading, you may check out  InvestaPrime and see how our features help you to make efficient smarter decisions.

Visualize your execution process

One of the practices that will benefit you as a trader is mental preparation. If you ever feel the difficulty in pulling the trigger on an opportunity or cutting your losses on a losing position, it’s due to the fact that you are not mentally prepared for the execution. Before the market opens, visualize yourself executing on your trading plans. If you do this consistently, you’ll find it easier to execute during market hours.

Treat losses as the cost of doing business

Losing money in the market can really affect your psyche. One moment a stock goes accordingly to your initial bias only to reverse and hit your stops. That hurts. But only in the beginning. You need to understand that losses are the natural consequence of trading. Even the best hedge fund managers around the world are wrong on their trading decisions 50% of the time. Treat your trading losses as if they’re expenses in your business.

Try to virtual trade

Paper trading is a good way to get a grasp of the market, especially if you’re still starting out. Most traders make the most costly mistakes in the beginning of their journeys, so it’s best you make and learn from those mistakes while trading virtually. You can always use our VTrade app to trade the Stock Market risk-free (Click here for iOS or here for Android mobile phones).

Conclusion

Mastering your trading psychology will help you seamlessly enter and exit trades without certain attachments and emotions. You will be able to execute relentlessly without hesitation or reservation on your trading plan in order to take advantage of the countless opportunities in the markets. Without the right mindset coming into the trading day, you will not be able to perform at the highest level consistently.

The topic of Trading Psychology is very broad, so it’s entire scope can’t be discussed in one or two articles. However, the basic points we’ve mentioned above are a good start to master the psychology of trading. If you want to read more about this, we would recommend the books of Mark Douglas: The Disciplined Trader and Trading in the Zone.

For those are looking for an in-depth topics on Trading Psychology, we highly recommend you to join the upcoming Trading Cup 2019 competition whereby our CEO, JC Bisnar a.k.a. Imbang Klase will provide an mentoring sessions about this via Exclusive Webinars available only for participants. Join here: http://invs.st/TradingCup2019

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Welcome to the Trading Cup 2019 Competition!

To be considered as an official participant, you must be able to go through the registration process including payment and ID verification as mentioned in this article.

After completion of the above requirements, here are some information that you may need to know once you officially joined the Trading Cup:

Step 1: Premium InvestaGroups

Once you have paid for your competition pass and have been verified by our team, you will automatically be added to a premium InvestaGroup.

For Prime and Regular Passes: Trading Cup Prime and Regular

For Student Passes: Trading Cup Students

You will receive the learning modules and webinar updates, news, tasks and many others via accessing the TOPICS tabs. (Regular and Prime InvestaGroup is a separate link from the Student InvestaGroup), and you may also interact with fellow participants along with our mentors.

Trading Cup InvestaGroups | TOPICS TAB

FREE LEARNING MODULES via InvestaLearn

Step 2: Webinars | Mentorship Sessions

We don’t want this year’s competition to only be for high level traders looking to be in a competitive environment. We also want this year’s Trading Cup to be an avenue to learn; especially those who are in the early stages of their investing journey.

Here’s everything you need to know about our mentorship sessions:

The mentorship sessions will be done through a series of webinars via InvestaLearn where our in-house traders here in Investagrams along with invited Stock Trading Champions and Multi-Million Fund Managers will help you guys take your trading to the next level.

Once your payment has been verified by our team, you will automatically gain access to the 400 page learning modules along with the exclusive webinar videos. Just go to InvestaLearn and click MY CLASSES to find them.

ACCESS InvestaLearn

Proceed to MY CLASSES

Webinars | Topics

The following are the topics that will be taught to Regular and Prime pass holders:

• Stock Market 101
• Understanding the Dynamics of Price Movement and Human Behavior
• Having a Risk-First Mentality
• How to Use Trading Tools to Your Advantage
• Inside the Minds of Stock Trading Champions and Multi-Million Fund Managers

The following are the topics that will be taught to Student pass holders:

• Stock Market 101
• Basic Technical Analysis
• Being a Student Trader
• Special Learning Sessions with Former Student Traders

Webinars | Release Dates

There will be a webinar released every Sunday starting Sunday, August 25, 2019.

BONUS: Exclusive Q & A Sessions with Investa Mentors

There will be an exclusive Q&A Sessions with your Investa Mentors (Jc Bisnar, Airwyn Tin, Bearyoholic, and TomaTrader) via InvestaGroups every Sunday from 9:00pm to 10:00pm.

All Trading Cup participants will be free to ask anything about the topics and lectures covered in the FREE 400 Page Learning Modules covering Technical Analysis, Fundamental Analysis, Risk Management, and Trading Psychology.

Only questions that were commented on the pinned post under “Q and A Sessions” tab in the premium InvestaGroup will be answered.

Questions from participants will be answered starting 9:00pm and ends at 10:00pm every Sunday starting August 25, 2019.

See sample conversation during the first Q&A Session last August 25:

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The concept of taking control of your financial destiny and supporting yourself by trading the financial markets is a dream almost all retail traders have. However, many don’t understand the risks involved in trading the markets full-time. If you wish to be part of the 10% who make money in the markets, the very first thing you must do to have a good foundation is to commit to mastery. Without that commitment, no matter how much you study about trading, you will not succeed.

No matter how many books you’ve read, videos you’ve watched, or markets you’ve traded; if you don’t commit to master, you will not be able to make a living out of the markets. Trading the markets full-time is very attractive, but everyone must understand that it is a tremendous challenge that requires one to adapt and overcome insurmountable hurdles along the way.

In this article, we will provide you some important points that you have to remember before you choose full-time trading as a means to support your lifestyle.

1. Make sure you are financially stable

This is the most important thing you must remember. If you decide to trade the markets full-time, you should be prepared with whatever that’s coming. The market is volatile, it can make erratic swings in a short period of time, make sure you have the money to pay for all the necessary expenses. It is best to save up money that is equivalent to your annual income before you start trading full-time.

2. Have significant experience in the market

You can’t just jump into full-time trading after three or few months of experience. You should especially reconsider if you’ve only experienced trading in a bull market because once the bears arrive, and they always do, you might get slaughtered. There’s no benchmark to how long you need to be in the market before you can go full-time, but we would suggest that you must have at least experienced different market environments several times.

3. Have a well-tested trading methodology

You can’t go to war without having the right weapons, you also can’t make a living out of the markets without having an effective trading methodology. Whatever strategy you choose to apply, a sufficient amount of backtesting will need to be done in order to prove its effectivity. Most importantly, you will need to have a methodology that can adapt to different kinds of market environments.

4. Do not let your emotions control you

There have been and always will be four types of emotions that have lead to financial destruction for traders: Fear, Greed, Hope, and Regret. There’s so much to tackle about these four emotions that it will require a separate article in the future. Just take note of these emotions and make sure you learn all there is to about them. Reminiscence of a Stock Operator and Trading in the Zone are two great books that talk about these emotions.

5. Never stop learning

Once you feel like you already know everything about trading the financial markets, you’ve already lost. To become a successful trader, you will need to become a perpetual learner. The markets do not remain static, they’re always dynamic and change over time. This means a methodology or framework you may be applying now might not work in the next 5 to 10 years. If you always think of yourself as a student of the market, the process of continuous learning with impact you greatly.

Full-time trading also comes with several advantages and disadvantages that you will need to take into consideration. Let’s take a look.

Advantages

Freedom

This is the main benefit of trading the markets full-time that everyone is after. Once you go trading full-time, you will have the freedom to do and accomplish other things in life. If you are a family man, you will have more time to spend with your loved ones. However, don’t take this freedom for granted. You will still need to put in early mornings and late nights in order to continuously improve as a trader.

A means to maximize wealth

If you’re doing it correctly, and with a sufficient amount of capital, trading the markets can be a way for you to maximize your wealth. The profits you generate can also be more than enough to supply for your living expenses, but it won’t be easy. The financial markets are the ultimate equalizer of wealth, but it can also take back every single cent you’ve made.

You can be your own boss

You don’t have to work with managers or supervisors. When trading the markets full-time, you’re only accountable to yourself. However, there is still one entity you will need to respect to the highest level; the market herself.

Disadvantages

Huge amount of risk involved

When you choose to go full-time trading one mistake will not only wipe out your account, it will also wipe out your means of living. That’s why choosing to resign from a stable job to trade full-time is not always recommended. As mentioned earlier, only take the leap once you have a well tested and defined trading methodology.

It can be emotionally stressful

Trading is not for weak-hearted people, there will be days where you will feel like the market is coming to get you. There is added stress and anxiety involved knowing that you will need to perform at the highest level in order to sustain the lifestyle you are living.

Conclusion

Trading the markets full-time is definitely possible, but it’s not easy. There have been countless of traders around the world who have been humbled by the market throughout the previous decades. If you want to be part of the 10% who make money trading the financial markets, you must be willing to put in tremendous amounts of hard work. Always remember: if you want the things you’ve never had, you got to do the things you’ve never done.