3 Common Psychological Mistakes E-Mini Traders Commit
3 Common Psychological Mistakes E-Mini Traders Commit
Trading e-mini contracts is as much a test of emotional control as opposed to intellectual acuity. One of the most difficult concepts to convey to new traders is the level of importance that psychology and emotional control play in profitable trading. It's not enough to know all the good trading setups; good traders are in complete control of their emotions throughout the course of a trading day. Make no mistake about it, a busy day in the markets provides a roller coaster of emotions for every trader to negotiate.
In no particular order, 3 common psychological errors traders commit are:
1. Make sure you focus entirely on how much you have made or lost. One of the strongest recommendations I could make to traders is to consider only how many points they have earned/lost it during the trading day. Forget about trading in terms of dollars and cents. When traders find themselves having that a good day or a terrible day it has an effect on how they trade. The ability to maintain a consistent trading style and trade selection is essential, regardless of where you stand in terms of gains and losses.
2. If you made a poor initial trade, try to get back to even money as fast as possible. No one wants to spend time on the losing side of the ledger but there is a natural temptation to try to get your money back all at once. Take your time, and stick with high probability setups and the trades will be successful. On the other hand, there is a tendency to get back in the game by trying to hit a home run by taking the first set up that occurs, whether it is a strong set up or a weak one.
3. You made several good trades and are well into the money, so you decide to take a risky trade and have a record day. This is a habit that I personally battle, and the proper course of action when you are having a good day is to become more conservative, not more aggressive. There was a time in my life when I got ahead I forced myself to stop trading for the day and because of my tendency to want to hit one "out of the park."The result of being too aggressive when you are well ahead is to take a great day and make it into a very average day, or a losing day. Regardless of whether you are having a great day or a bad day, stick to your trading plan.
One of the most overlooked aspects of trading is the effect your emotions or psychological outlook on the day have on your trading. Further, most traders are loath to discuss psychological factors and trading. I have never been able to fully explain why traders are reluctant to discuss trading psychology or just miss trading psychology as unimportant, but the wise trader realizes his or her emotional limitations in relation to trading and makes appropriate adjustments.
In summary, we have emphasized the importance of emotions and psychological factors in trading. Throughout the course of a roller coaster day, a trader experiences a wide range of emotions that may have an effect on his or her trading. Whether trader is well behind or well I had in the win/loss column, it is important to maintain a consistent style of trading and not try to overcompensate for a bad day or become too aggressive on a good day. Bill also noted that psychological factors and trading are often overlooked or given short shrift because of a reluctance of many traders to discuss this topic. Be aware of how you are feeling as you trade, but stick with your trading plan and succeed. 3 Common Mistakes Made By Forex Traders 3 Common Mistakes Made By Forex Traders 3 Can't Miss Online Branding Strategies 3 Biggest Blogging Mistakes 3 Big Reasons To Attend A Live Small Business Workshop by:Kerry Beck 3 Better Ways To Search Online 3 Better Ways To Search Online 3 Best Ways To Earn Money Online 3 Best Patterns For The Candlestick Trader 3 Best Daytrading Emini Ideas for Traders 3 Benefits of Online Forex Training 3 Awesome Reasons for Buying Swimwear Online 3 Awesome Reasons For Buying Swimwear Online