The Psychology Of Trading

This is as important as the rules set-up. You have to master trading psychology before you can become a successful trader. You should pay as much attention to managing your emotion, patience, fear and greed as trading techniques itself

Managing Trading Psychology
 - The market doesn't care if you want or need to make money or if you are right or wrong
 - All traders have emotions and make mistakes
 - Setting Expectations
 - Accepting Losses
 - Managing Fear and Greed

Setting Expectation
 - Trading is NOT a Get-Rich-Quick scheme
 - Set realistic expectations
 - Over-rated my abilities
 - Reality vs Vision
 - Don't build decision today on what I hope to be tomorrow
 - Need to perform = Stress
 - Focus on the process of trading rather than $$ goals
 - Remain in my circle of competence
 - Take it slow and steady

Accepting Losses
 - Loss is part of trading
 - Plan for string of losses
 - Good trading =/= profitable trading
 - Losses =/= Loser
 - The outcome of every trade is always uncertain
 - Stop trading or trade less if necessary
 - Practice, practice, practice
 - Jesse Livermore: Losses is paying for information

"If you trade well, there is no losing trades, only trades that make money and trades that give you information to make money later"
 - Brett Steenberg, author of "The Psychology of Trading"

Managing Fear and Greed
 - Avoid chasing stocks ("miss the boat" mentality)
 - Think abundance
 - A few wins don't make you great
 - Understand the price and market
 - Manage your risk within your equity
 - Know your entry and exit before the trade
 - Plan the grade and trade the plan
 - Associate with like-minded traders

"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. The will die  poor"
 - Jesse Livermore, How To Trade In Stocks

Trading By The Rule
 - Ask yourself the following questions:
    - Do I have a winning formula?
    - Have I really tested it to know it's winning?
    - Do I have the needed confidence?
    - Am I executing for formula faithfully?
    - Am I truly tracking each and every trade to know I am following the formula?
    - Do I have the confidence in my ability to follow through?

Nice Things to Have
 - A trading mission statement
 - A trading plan
 - A trading journey
 - Risk managements system
 - Monthly/Yearly performance review

Review the items at least once a year

Common denominators of a successful trader
 - The desire to be successful
 - The confidence that they could win over the long run
 - Discipline to follow a given methodology
 - Taking trading seriously
 - Rigid risk control
 - Patience to wait for opportunities (Persistence)
 - Acting independent of the crowd
 - Accepting losing is part of the game
 - Loving what they are doing