How to Master Trading Psychology in 6 Steps

We figured out the emotions that affect trading, but how to work with them?

These six tips will help you!

1. Practice with a demo account

You may still need to feel ready to invest your hard-earned money. This is just fine! Then open a demo account. You can practise real-time trades without the stress and emotion that comes with real money.

2. Treat your first losses as learning rewards

Nothing is better than opening a real account — even after several months of practice. Using real money can ignite your trading emotions! You may panic and exit too early when one of your holdings starts to fall.

In any case, consider your initial losses as tuition fees in the marketplace. This is part of your trading education.

3. Observe the habits of successful traders

There is no need to reinvent the wheel. Instead, learn from successful traders who have known how the market works for years, if not decades! Adhitan mentors are just like that. They spend time learning the basics, working on a constant search for new knowledge and research. They set goals and keep growing.

4. Set stop losses to protect your account

You must set stop losses in advance. No excuses! The market will not bend to your will. It can (and often will) do things you don’t expect. This may be contrary to reason and everything you have learned. Accept the random nature of the market.

5. Choose your favourite strategies and stick to them

Finding patterns is an essential part of trading psychology. Patterns tend to repeat themselves so identification can help you in your trading. You must find what suits you: pick two to five of your favourite strategies, practice recognizing when they occur, and stick to them.

6. Learn to read news catalysts correctly

You can do perfect technical analysis and still lose if you don’t consider news catalysts. Most people read the news and assume it will be the catalyst. But by the time you read them, so will all the other traders. And they have already acted on this matter.

A more thoughtful approach is to do the opposite. Check stocks first; then look for a news event that explains the stock’s performance.