Trade psychology happens to be one of the aspects I consider very important in trading, whatever it may be crypto, stocks, forex. Sadly, most traders never pay attention to this aspect, "it's all about the charts", they say. I just need to learn to identify this pattern, oh! that's an ascending triangle, shoot! It's a double bottom and so on leaving the most important part, your mental health before, during and after a trade.
Your psychology matters a lot when trading. It's important to note that most of the time the reason things just don't play out the way you imagine or expect them to be isn't always because you are wholly a terrible trader but because your trade psychology is simply messed up.
Humans are sophisticated individuals, having the most developed brain of all living organisms we are capable of not only solving problems but creating them as well. Our brain functions in a way to keep us away from danger. With the possession of a survival-based response, it manages to do so effectively but also ends up placing undue limitations on our behaviour. As traders suppressing this is the goal if we aim to make consistent success in trading.
Whenever you place a trade and your mind gets flooded by thoughts and what if's... What if I end up losing this trade, should I exit this trade and wait till price goes down some more before entering? I know the market will rebound so ill keep extending my stop loss, Should I book my profits now, last time I hesitated I lost everything.
I'm sure a few of those clicked. Why most traders don't make consistent profits is because they end up having to react to one of these thoughts. You don't imagine a predator in the jungle asking itself "what if I don't catch it, I couldn't catch it last time and I went hungry for days".
Humans by nature become prisoners of their own making especially dealing with previous losses. Funny how a loss can create a domino effect leading to other strings of losses in trading simply because of the way we react towards them.
Psychology in trading is a very complex ideology and its complexities cannot be highlighted in a single post but I'd tell you this. If your aim is to be profitable in the long run, you can start by working on your psychology. Get rid of the "I can't deal with failure" part of you.
Failure instead should be viewed as a chance to begin again, but this time more intelligently.
I'd advise you to grab a few books on trade psychology and let it sink in, I personally recommend The essence of trading psychology by Yvan Byeajee, just get one and begin your journey of inner change. It's up to you to discover what works for you.
Be yourself, there's no one better :)
