Many skills are required for trading successfully in the financial markets. They include the abilities to learn price action and to determine the direction of a forex/stock trend. But neither of these technical skills is as important as the trader's
mindset..
MINDSET:Trading psychology refers to the emotions and mental state that help to dictate success or failure in trading. Trading psychology represents various aspects of an individual’s character and behaviors that influence their trading actions. Trading psychology can be as important as other attributes such as knowledge, experience and skill in determining trading success.Trading psychology can be associated with a few specific emotions and behaviors that are often catalysts for market trading. Conventional characterizations of emotionally-driven behavior in markets ascribe most emotional trading to either greed or fear.
Poor Risk Management:Risk management in trading is essential for averting the risk of bearing the losses arising from stock market trade. Risk management involves identification, evaluation and mitigation of risks which usually arise when the market moves in the opposite direction from the expectations. So, it is really important to set your expectations on the basis of a thorough analysis of the market and after anticipating all the risks.
No Trading Plan:A trading plan is a systematic method for identifying and trading opportunity that takes into consideration a number of variables including time, risk and a traders objectives. A trading plan outlines how a trader will find and execute trades, including under what conditions they will buy and sell, how large of a position they will take, how they will manage positions while in them, and other rules for when to trade and when not to.
