DEVELOPING TRADER PSYCHOLOGY

Trading has nothing to do with indicators and everything to do with you.The easiest thing to do in market to learn Technical Analysis. However, they have nothing to do with trading. Many times You have to try Anti-technical. technical Indicators You can memorize or buy from market . But all the results depends on You.

you can learn a perfectly good trading system, trade it, and lose money. someone else trading the very same system makes a fortune.

Once your trading system hit stoploss you start thinking....

• Is the system really effective any more?
• Have the market conditions changed so this system no longer works?
• Do I need a new system?

and many such questions start arising in Your mind...

So here are few things you can do to help you manage your trades better:

Don't look at daily profits. Look at them over time. Who cares if you lose Rs. 1000 today? You could make Rs. 2000 tomorrow! That's still Rs. 500 a day over 2 days. So always analyze your profit loss over a definite time period


Plan for losses. For a good trader losses is not permanent. They will come, but know they're only temporary. If u lost today You can gain tomorrow.

Plan your trades and trade your plan. This is the most important part of trading. If you start the day with a plan, but don't follow it, than No meaning of your plan and you may end-up with losses without proper plan

A good trading system gives you 7 winning trade out of 10 trades....

HOW TO DECIDE TRADING QUANTITY.

This is the most frequently asked question by all day traders as you cannot move original Stop-loss level to any other levels. Than its become very difficult to decide in how much quantity you should trade. Normally 2-3% risk of your trading capital treat as good trading risk.

Lets take a case that your trading capital is Rs. 50000. as per 2% calculation you should take only Rs. 1000 risk per trade. Now question comes that how much quantity should I trade so that if stop-loss triggers than I must loose only 1000 Rs per trade. Infect Your trading quantity depends on your risk ability. Means your risk ability will decide in how much quantity you should trade. For Example you got tips to buy SBI at 2000 with stop loss of 1950. And your risk ability is Rs. 1000 per call. Than how much quantity u should buy of SBI??? Confused????

Quantity=Risk Ability/(buy price- stoploss price)
=1000/(2000-1950)
=20
That means should purchase 20 shares of SBI so that if sl trigger than you will loose only Rs 1000 as you had decided earlier.

Let’s take another example of unitech. For example you got a call to buy unitech at 70 Rs with stop loss of 68.50 and your risk ability is Rs 1000, than how much quantity you should buy unitech. Just calculate like this-

=1000(70-68.50)
=666.66
~666
Means you should buy only 666 shares of unitech. In any case if stoploss trigger in unitech than you will loose only 1000 Rs