Thinking Like A Professional Trader

A trader uses market analysis to spot trading patterns. He determines when to buy and sell and where to buy and sell. Define his risk management rules and position sizing. Rules and guidelines to take profits or setting the target price. To manage your outcome and expectations you must realign your mental environment.

• Train your brain to think in terms of probabilities
• Never think in terms of absolute results
• Create a strong belief in your consistency as a trader
• Execute your trading system without any emotions
• Trust and believe in your study and don’t get distracted by what’s happening around you

Develop self-discipline, and create a new mental framework. Self discipline is not a personality trait people are born with. Developing self-discipline is about personal transformation, anybody can choose to use self-discipline.

A trader should create a belief system to be a consistent winner. To be a consistent winner you should identify your trading edges. Define risk on every trade, you have a complete understanding of the risk involved in the trading business. You act upon your trading system and implement the same without any bias. You deploy your trading system without any reservation or hesitation. Continuously monitor yourself and be aware of your errors and negligence.

One of your basic objectives as a trader is to perceive the opportunities available. Opportunities with respect to an asset class, different markets and trading style. A trader should learn how to stay focussed on the available opportunities. Prepare a plan and stick to your plan. After planning, the focus should be on execution and not looking for better opportunities.

Profitable trading is tough and challenging but not impossible. More than 90% of traders fail and quit trading. The blame is always on the market, which is wrong. Tarders are unsuccessful because they don’t work on acquiring the skill and education to be successful. One key to success is to identify strategies and trade setup that provides better return as compared to negative returns. Many traders fail in trading because they fail to adapt to changing market conditions and the environment.