Think Like a Trader: 10 Psychological Trading Rules: ⬇️
1. Never trade so big that you end up watching every price tick even though you are not a day trader.
2. Don’t trade so big you dramatically increase your pulse rate or get the sweats.
3. Each trade should only be one of your next one hundred. Never risk more than 1% of your trading account on one trade based on your stop loss being triggered and position size.
The 1% I mean is the LOSS of total trading capital and NOT the price move or the position size.
The 1% I mean is the LOSS of total trading capital and NOT the price move or the position size.
4. Don’t spend time obsessing over market hindsight. All you can focus on is following your plan in real-time and moving forward.
5. Forget about your last trade and focus on your next trade.
6. Losses should be lessons that you paid to learn. Look at drawdowns in capital as tuition and not failure.
7. If you followed your trading plan, your loss is just part of the process to get to profitability. Think long term.
8. Position sizes can’t be so large that they compromise your emotions, trigger your ego, and distract you from your trading plan.
9. Don’t revenge trade to attempt to recover your losses. Stick to your trading system no matter what the short-term outcome is.
10. Your signals have to be based on price action and not greed, fear, or your ego.
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