Examine trading psychology from "summary" of The Trading Edge by Rickey Cheung
Trading psychology can be a powerful tool to help traders make more informed decisions. Analysing how you think and act while trading can lead to improved performance and ultimately better returns.- Trading can be an emotional rollercoaster, with alternating phases of euphoria from successes and the 'not good enough' feelings due to losses. Being aware of this fact is key to success.
- Many traders do not think rationally while trading due to their untested beliefs, which may lead to impulse decisions at times.
- While some successful traders have higher tolerance for risk, having a clear plan in place can help reduce uncertainty.
- Having an edge in trading requires that one maintains a consistent mind-set and constantly refocus on strategies instead of short-term results.
- Patience and discipline go hand-in-hand; trying to rush into trades without thorough analysis can leave you exposed to huge losses.
- Turn off the noise and focus on the data - too much information can blur your judgment.
- It also pays off to keep track of your performance over time; understand mistakes and figure out how to improve them.
