The Trader’s Psychology Is The Key To Win In The Stock Market

To become a successful trader, you must have a good and proper mental and physical state. Only studying entry signals, position sizing, money management is not enough; only by combining all this study and research with a good and decent mental preparation you shall be able to succeed as a trader. Unfortunately, most people do not realize this.

The majority of aspiring traders focus far too much on getting the right entry signal that they end up forgetting all the rest that involves becoming a prosperous investor. Psychology is the key in this game. You must develop a complete disregard and a lack of emotion towards the market. Otherwise, when there is money at stake, your vision and everything you have learner might become blurred and mixed with feelings ranging from fear to greed.

They say supply and demand are the driving forces of the market; I might say that fear and greed drive the market. Both can be used to your advantage or disadvantage; it will really depend on how well prepared you are to face the market. You have probably experienced this before: you have carefully studied the market for a full week and have decided the trade to take. But when the trade starts going against you, you drop all you’re previously and calmly set rules and act on instinct. Then, you are left wondering what on earth just happened?

This is a common trait among traders and investors, even experienced ones. This is, by far, one of the hardest skills one must learn in order to become a profitable trader. Only by being able to fully control your mental awareness and reactions, you will be a complete trader that will have enough ability to trade in all sorts of market. To learn a bit about this psychology that is need in the stock market, I would like to recommend you Edwin Lefèvre’s “Reminiscences of a Stock Operator”. It is an excellent book and it will certainly teach you something.