Professional Traders Focus On Protecting Capital

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Letting your profits run and cutting your losses short. A countless number of trading books advise traders to do exactly this. Yet, my research has found that it is most difficult for novice traders to overcome. The simple exercise of generating profits and cutting losses short goes directly against current mindset of most humans.

In theory, this is a simple exercise. In practice, however, we see clear evidence that most traders do a poor job of putting these strategies into action. Having confidence using a proven trading plan promoting predetermined strategies enhances calm during LIVE market conditions.

The prepared trader is waiting for specific situations knowing in advance what to do if markets go with or against the trade he places.

Conquering Fear and Controlling Emotion in FOREX trading is an ongoing battle all humans face.

Back at the beginning of this decade when I decided to learn everything possible about trading, I noticed a stunning correlation to becoming a proficient trader and being a successful athlete in sports.

Both areas demand quality attention with focus and those with superb practice regimens develop successful skills before going to battle. You must learn how to become mentally tough understanding the losses in trading, much like the major league baseball player who fails 70% of his at bats.

Developing a winner’s mentality is possible, but maintaining during adversity takes vast experience. You must develop emotional control and self-discipline that keeps you taking the most prudent investment choices instead of the emotionally satisfying ones.

Accomplishing this is not impossible, but it does take time and effort.

Those of you with a better understanding on mindset are taking time to challenge and feed the brain. This is vital part to continued success over long haul. A successful trader is confident and decisive.

Although many traders know exactly what they want to do in critical situations, very few actually follow through and do it consistently. The rest don’t, mostly because they freeze. You have heard the old sayings paralysis by analysis or jack of all trades and master of none.

With the pressure and the high stakes involved with trading the markets, even the most well adjusted trader can fall prey to emotional decisions. Those willing to keep on practicing, and not quit, will be rewarded. The key to sustain success is locating the correct outlet that provides quality training /coaching during your journey.

When you are struggling in FOREX or any trading markets, the struggle becomes all consuming. You don’t realize that you are struggling in the market. Instead, you find yourself always looking for some solution to overcome the struggle.

The disciplined approach is to consider your alternatives in advance so you know what to do, without having to think on your feet, in response to every market eventuality. Remember the old Chinese saying, “When the student is ready, the teacher will arrive.” Make sure you are ready.

Practice regimens are rehearsing trading under realistic conditions to assemble needed skills into superior performance. Gaining vast experience in any endeavor takes some time.

Maintaining success is not always easy, yet it is for the most part simple. The way to accomplishment is not hidden. It is in plain view.

None of us are ever completely free of conflict, fear or self-doubt. We are humans. I want to help all wanting to succeed by providing enough indictor tools to enhance growth following a practice regimen allowing you to locate your specific trading personality.

Trading the markets is stressful and uncertain. The natural human response is to wonder if you can perform at peak performance after a few positive trades. Conflict, fear and self-doubt are always there, lurking below your awareness.

Professionals master their emotions using a trading plan gained through vast experience to overcome adversity. They have experienced adversity and understood the rules of engagement for building a trading account. Every turtle crosses the finish line, it isn’t a race.

When a fireman runs into a burning building I assume he is afraid but he does it anyway to achieve the desired result. Unless you overcome or accept your fear and do it anyway, you will not be a successful trader.

I am sharing something of substance in advance and ask that you fully grasp and understand that fear and self-doubt along with emotion controls the trader not fully trained. These inexperienced traders succumb to strong emotions that overpower their rational mind.

The possible psychological ailments that prevent trading success seem endless. If we survive in the markets long enough, though, we eventually come to understand the importance of personal psychology or the power of our mindset.

Psychological ailments are powerful, but most of us can beat them. It isn’t always easy. Just know in advance every human has a damaged psyche from the beginning. The key is finding out how much damage one has had during their lifetime and moving quickly to overcome.

It requires a desire to improve and a long-term effort to let the change sink in and have lasting effect.  It is vital for you to be aware of the psychological ailments that may plague you, and work steadily to overcome them.

Winning traders are logical rather than emotional, for example. Sounds simple, but remaining calm under fire separates the pretenders and the professionals.

Professional traders focus on limiting risk and protecting capital. Amateur traders focus on how much money they can make on each trade. Professionals always take money away from amateurs. The trader who controls his or her risk takes money from the trader whose head is in the clouds.

Happiness is multiplied when prosperity is shared by giving to others. Of course, you ultimately will decide your fate. 

Read also:

Concentrate On Mastering One Style That Suits Your Personality

The Two Simple Rules For Trading Stock

Do You Believe This Market Is Random?