Day Trader Psychology for Beginners

There are different kinds of psychology that works in market at the same time. Especially for day trader it is very important to know how to prepare for trading because practically we have only 06:00 Hours to make money. In that 06:00 Hours we have to select stock to trade, best entry and exit level, risk reward management and of course trading setup. But that is only 20% preparation for the day balance 80% is Nervousness, FOMO, doubt, etc.

We all are the part of such different type of psychology when we are trading in market. What we have to do is just try to avoid all these type of psychology and just concentrate on “PDF”. It is not any file extension but I have made 3 principles that one has to follow during trading and with that you can avoid all above negative psychology.

What is PDF?. It means “Patience”, “Discipline” & “Faith”. So we are now only looking for positive psychology which is useful in both the market “Bull” & “Bear”. Trading means taking entry and then book profit or loss. That means nobody is sure in market about profit and therefore we all have to follow “Stop Loss”.

“Patience” means you have to be clear about your style of set up on chart. You have to wait until formation of your probable price action on chart. For example you have decided to take entry only when price cross above or below some simple moving average. So that is known as your trading set up. And you must have back test your set up on different stock and after that you will get accuracy level of your set up. So patience can control “Feeling of Mission Out” (FOMO), “Doubt”, “Fear”.

So you have to decide what you want to be.

 

 

“Discipline” means taking entry as per your set up with strict stop loss and monitor the price action. Here one has to remember that once you have taken entry then don’t exit just because you heard any news or anything which is against your trade. Because if you do so then you are compromising with your trading psychology. Just be with your trade max to max your stop loss gets triggered let it be, because what today happened is not going to happened every day and you have to remain in market, so if you hear someone else then everyday you get something about market and thereby you start feeling “Nervousness”. Market is full of positive and negative news.

“Faith” is must because that is only thing which gives you confidence and avoid the feeling of “Greed” and ‘Fear”. If you have back tested your setup then you have to keep faith so that you will end up with good profit.

I hope this will help for new and well as running day trader. I will come with new market mind set soon. Please comment and share if you like.

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Happy Trading…