If you are one of those traders that think psychology is the most important aspect when it comes to being a successful trader, I would say you are right. But, I feel that many traders jump too quickly to the conclusion that psychology is the root of all their problems.
Don’t get me wrong, trading psychology is very important, but in my opinion there’s one other thing that needs to be in place first before you can start blaming trading psychology. I’m talking about first finding / having a trading strategy with a proven edge.
It doesn’t matter whether you:
- Are extremely disciplined and patient
- Have the right amount of confidence
- Have your ego in check
- Are in control of your emotions (like fear and greed)
- Don’t have a problem with FOMO (fear of missing out)
- Respect risk and have a proper risk management plan in place
… and all the other aspects that make traders successful; if you don’t have a proven edge, you will struggle to make money.
How do you find a trading strategy with an edge? By doing the things that many of us tend to skip, like:
- Doing research into different kinds of trading strategies / styles
- Learning about technical and / or fundamental analysis
- Doing courses
- Backtesting
- Gathering data
- Forward testing
- Demo trading
…plus whatever is needed to get you on the right track to find a trading strategy with an edge that you trust.
Now, let’s say you start trading your strategy (with its edge and a proper risk management plan) and you find you are not doing too well. You know your strategy has an edge, but you struggle to follow it. That’s when you start looking at yourself, that’s when you start looking inward, that’s when the real work starts.
Thanks so much for reading. Hope you and your loved ones are well and safe.
Thanks and Regards,
Trading SOS SOS