There’s various topics with in the trading world we could discuss here, but I’m just going to go through a couple more things I’ve learned trading so far. Lets go into trading psychology. Now I know I’ve spoken on this subject in a few of my prior post, But I’m going to tell you guys again trading psychology can make or break you. This goes into the way you form your strategy. If you can’t handle much draw back build your strategy around that and trust your strategy if it’s working for you. Also always work on your trading psychology because that maybe the reason your strategy doesn’t work. The first part of your strategy should be trusting yourself and your decisions. It’s OK to be wrong, statistically out of 10 trades you’ll only need to win 3 to make profit given you’re using good risk management practices.
Trading psychology also goes into risk management. You thinking it’s time to go with a higher lot size because I lost trades and have to make my money back or I need to buy more because I lost money is back risk management. That type of thinking will make you lose all your capital almost every time. Sometimes you get lucky and save a small amount of your capital lol. In certain situation bad risk management and trading psychology can put you in debt to your brokerage. So be smart practice good risk management strategies and don’t get caught up holding the bag. Another thing I should mention is don’t follow bag holders, These people more then likely have no idea what’s going on behind the scenes of their holdings (The bag). Now I’m not saying every time you see someone down they’re holding the bag, I’m just saying it’s probably not the best idea to listen to the guy that bought dogecoin at $ 0.50.
Rather you know this or not but being blind to other asset classes is a bit of a flaw in trading psychology. I say this because it’s so many times when I see people confused about why a market maybe moving the way it’s moving. If the stock market is down I understand you can just short sell options but why not go check out check out commodity futures or precious metals maybe crypto. Just because one markets down doesn’t mean there all down. For example we may see a stock market crash now I’m not saying this is a guarantee but there’s a lot of signs that point towards that. In another thought something that is almost confirmed is a crypto bull run. The reason I was able to learn these things is because I study multiple markets and like I said in the A piece of what I’ve learned about trading so far (part 1) post use information from other markets to make your decisions rotate when need be.
Last thing, Don’t do thing in the hopes of getting rich. It takes an actual affinity for the trade to get to where you need to be to make consistent profit. A real trader can make money in any market not only in a bull market. This is a trade and you should treat your learning as such. As for me my next step is to go back to college but this time for economics along with checking out prop firms to see how things go with that. I hope this short excerpt helps you think about some thing to look for while your trying to learn the markets. Check out my youtube channel trading with shaq where I will be talking about mainly forex but I can go into anything you guys ask, go by youtube subscribe and leave a comment tell I would love to hear your feed back.