In the world of trading, a vast majority of traders are bound to fail as this is a zero sum game. A trader who wants to survive in the market must have his/her own trading system. In terms of mindset, which is a very important part of the trading system, the point is draw lessons from failures in order to avoid making similar mistakes in the future. There are many ways to make profits, but patterns can always be found in the losing trades. One can only trade in its element by continuously drawing and summarizing lessons. To do this, a peace of mind is the key. The following lists a few suggestions to keep a sound mentality.
Make a trading plan. Trading is a war, you must follow the rules before placing trades. Some traders act rashly on comments they get from somewhere or they just place trades according to their friends' advice. Traders' minds always fluctuate as the price goes up and down and they may become panic as soon as the price goes abnormally all of a sudden. Therefore, one of the most effective ways to overcome fear is try to get relevant information as much as possible and make a careful preparation. Have your own thoughts and strategies. Make independent judgments.
Establish money management awareness. How many lots should I place at what price point? What should I do if I choose a wrong direction? These questions should be considered carefully before placing any trade. Control your positions reasonably, do not trade with half or full of your funds and stick to the habit of right side trading. Any unreasonable positions, such as holding 50% or 75% position, would cause traders susceptible to a situation that they could go out of control emotionally once there is any sudden changes in the market, thus provoking any unwanted chain reactions.
Have a calm and optimistic attitude. It is normal that the market goes up and down. Even there is any uncertain factor that produces emergent events, it is useless to fear. Keep calm when you realize you make a mistake. Only in a calm state, you can make judgments rationally to determine what to do next and minimize your loss. While optimism is a tool that helps you stay composed and remove your hesitation about which way you should take.
Develop your own trading style. Every player has its own style. If a trader prefers to be aggressive, their minds would fluctuate greatly as the price goes up and down. Especially for short term or intraday trading, which would enable them to gain profits quickly, but would entail big losses too if they make a mistake. A sound trader would keep a peace of mind, and dismiss any unnecessary worries or joys when the price goes up and down. Therefore, a trader should keep a robust trading style in order to make profits constantly in the market.
Learn to be patient and perseverant. History tells us the real fear that traders face is the markets that are meandering up and down with no discernable long-term trend, so we must be patient while waiting for any determined indication for a trend to establish. Once a trend is determined, it will not change easily. Be perseverant in believing the trend will be formed one day.
