What Separates the Good Traders from the Bad Traders?

There are many forms of investing online. While I can give you a list that is a mile long, these are the most common forms of successful investments. Some of the following know how to invest terms are:

1. Option trading

2. Future trading

3. Currency trading

4. Stock trading

5. Future trading

6. Forex trading (or) foreign exchange trading

I want to start this investing online critique out with a story… On a beautiful late spring afternoon, twenty-five years ago, two young men graduated from the same college. These men were very much alike. Both, better than average students, were personable and filled with ambitious dreams for the future.

For the sake of my example, I will set both college graduates off online trading using a day trading plat form. Through a gift, both start with the same online investing investment risk capital, the same daytrading plat form, and the same trading system with precise rules for entry and exits.

Shockingly, there is a difference. After one month, one day-trader went broke / bust, while the other day trader returned a 20% profit.

Have you ever wondered, as I have, what makes this kind of difference in people’s trading? It is not always a native intelligence, talent or dedication. It is not that one person wants success and the other does not.

The difference lies within the psychology of the brain. Your psychological mind set is likely to play a larger role in your trading online career than your chosen technique or any other details associated with your day-to-day practice.

Here are some good examples:

1. One person looks at a glass ½ empty, while the other personality looks at that same cup as ½ full.

2. Someone may look at problems and call them stress, while another individual looks at troubles as challenges.

3. Another one may look at a ship in a storm as an adventurous roller coaster ride, while another human being sees the same situation as a hurricane that has a death call.

I am not the only one to discover this…

In his book, “Trade Your Way to Financial Freedom“, the renowned American psychologist Dr. Van Tharp discusses the role psychology plays in trading success. He divides trading into three Ingredients.

In his pie chart:

— System is 10%

— Money Management Success is 30%, and

— 60% pertains to the psychology of thought and emotion.

Tharp discovered that the trader’s psychology make up of the mind has more to do with his success than anything else does.

However, what exactly is the psychology of the mind?

In short, the psychology of the mind refers to your thinking and emotional actions and responses to any given situation…In trading, fear, greed, vanity, pride, hope, jealousy, denial – all these can affect investment decisions. Although, your aim in the market is to maximize your profit and minimize your risk, thinking and emotions often make this easier said than done.

FOR EXAMPLE – Traders, who cannot control the psychological process of thought and emotion, make the wrong decision – such as the common amateur mistake of holding a losing position in the belief that someday it will become a winner.

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