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8 Solid Ways To Improve Your Trading Psychology


To become a more successful trader and the next millionaire , you simply have to improve your trading psychology. After all, it’s a simple fact: the stock market doesn’t have
emotions. But as a person, you do.
Many traders can fall into the trap of taking the market’s fluctuations and volatility as being personal and this bitterness/ignorance can lead to huge errors in judgment and impulsive actions.
The solution is fairly simple, though: get smart about the psychology of trading. By improving your trading psychology, you can mentally whip yourself into shape to become a stronger trader and increase your risk tolerance. Uncertain about how to up your emotional IQ when it comes to trading? Here, I’ll offer some helpful tips for how to do it.
1. Get yourself in the right mindset. As a trader, you can benefit from daily pep talks and self motivation exercises. Reminding yourself before the trading day begins that the stock prices are not personal can be a powerful reminder. Taking a few moments to get centered and make sure your head is in the right place can prevent you from making impulsive decisions in your trading. You might not totally be able to remove emotions from the equation, but it can help reduce potential damage when you find yourself making quick decisions.
2. Have a great base of knowledge. One of the best ways to improve your trading psychology is to increase your knowledge. Having a strong base of knowledge about how trading works will set you up to make better decisions, both long term and on the fly.
The Tim Sykes Millionaire Challenge is designed to give traders knowledge which is actionable and applicable. We take things a few steps beyond trading basics and work with how to use the knowledge and trading techniques to actually make money. Having this foundation gives you much better basis from which to make strong trading decisions.
3. Imagine winning. Olympic athletes will do visualizations of seeing themselves winning a race or game. It might not actually get them to win the gold, but it certainly doesn’t hurt their performance. Why not do the same with your trading? Visualizing how it might feel to win or make a big gain on trades can be motivating, and it can really prompt you to try to figure out real steps that you can take toward making it a reality.
4. Imagine losing. Visualizing a big win is important, but you should also take a few moments to consider how it might feel or what it might look like to lose big, too. Imagining the worst-case scenario isn’t an exercise designed to turn you into a Debbie Downer. Rather, it’s a preventative exercise that can keep you from making truly foolish mistakes. By considering the worst that could happen, you can take proactive steps to avoid such an outcome.
5. Remind yourself that it’s real money.Some traders actually keep a stack of cash on or near their work area. Why? As a reminder. But of what? Two key things.
For one thing, seeing cash can be a motivator of what you’re going for as a trader. For another, and possibly more importantly, it’s a reminder that you’re trading real money.
When trading online, it can be easy to forget that the numbers on your screen are actually representative of dollar signs. Those are dollars that actually belong to you. Remembering this will likely help you make smarter decisions with your money. This means you’ll be more likely to do the things I always tell members of the Tim Sykes Million Challenge to do: make a trading plan, do your research, and approach your trade in a meticulous way.
6. Observe the habits of successful traders. Imitation is the sincerest form of flattery, or so they say. When it comes to trading, you never want to copy another trader’s work exactly. Ultimately, this is because there are too many variables in trading to copy someone else’s methods exactly and hope for success.
However, that having been said, observing the positive characteristics of successful traders and cultivating aspects of them or methods into your own trading can be extremely effective for your own improvement. Piecing together the successful methods that work for others can make you a stronger trader. It can also help you observe the positive effects of good trading psychology.
7. Practice, practice, practice. You’re rarely good at something the first time you do it. Trading is no different. Time can (and will) be your biggest teacher. Practice is also the best and most reliable way to gain the mental strength it takes to trade and to improve your trading psychology.
Every tip listed in this post will be most effective over time and with practice. None of them are intended to be a one-time exercise, otherwise their effectiveness will be limited.
8. Observe your progress over time. One of the best ways to improve your trading psychology is to monitor, observe, and document your progress over time…use this software’s paper-trading functionality.
One of the best ways to do this is to take daily notes in a trading log. This might be in a document on your computer; it might be handwritten notes. But keep a record of what you’re doing as a trader. Document your successes, and try to see if there are trends or things that you are doing that are reliably making you money. On the flip side, take the time to keep track of things you’re doing that are reliably wasting your time and making you lose money.
Over time, this log will act as an invaluable resource to streamline and improve your trading and to make your mental clarity stronger on each and every trade.
Trading is absolutely psychological. By investing your time and energy in improving your trading psychology, you will benefit mentally and financially as well. Follow these tips religiously and you will see your results improve.

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