There’s a lot of great information about Trading Psychology. One person whom I have a lot of respect for is Dr. Brett Steenbarger. His blog has been instrumental in developing a proper trading mindset over the years.
Apply Trading Psychology for consistent profits
So, after a single negative trading day last week, I’m back strong… I had an idea about what the market could do today based on some longer term charts. Just to reiterate, I don’t care what happens intra-day on the monthly, daily or 60 minute chart. But it gives me a good high level overview that can create a nice objective bias.
How we apply Trading Psychology in our professional trading group…
As I mentioned in our trading room this morning, you have to use trading psychology by learning to think one or two steps ahead of the market. Basically, look at trading like a chess game. Here’s what that means to me…
When I’m looking to get in a trade, I want to see the trade hit my target before I even get in the market. If I can’t see the potential for the trade to work out, then I just sit on my hands. Doing this gives me really strong conviction in my trade, and the confidence to hold for the target.
A few students asked me how to develop a strong trading psychology and the ability to “think two steps ahead of the market”. And the simple answer is this: practice, repetition, and burning those damn images into your mind. You have to be able to close your eyes at any given moment and “define” a winning trade in your own mind’s eye. I think about this stuff so much that I dream about it… dead serious! And in some dreams I can actually feel the emotions and physical sensations of what it’s like to be in a trade. If you gain control over trading psychology, then your day to day decisions making in the live market will become so much easier!
Learning to manage your trading psychology and mental state game is a process
There are no short-cuts… Only dedicated study to develop your craft.