By Alan Edward
THE DIVERGENT TRADER
A weird thing about trading psychology is that everybody knows how to handle it theoretically.
But when it comes to real trading though, 90% of traders find out that it is not so easy and end up with mental barriers.
90% of traders struggle to close the gap between ''knowing'' and ''doing.''
These barriers prevent them from executing trades as easily as they would like to.
One of the most common problems is that traders tend to exit their trades too prematurely than they originally planned.
For example, their Profit Target is 20 pips, but when they are 15 pips in open profit, they quickly close their position in fear that the price will turn.
So, instead of taking full 20 pip profit, they take “at least something“.
I was also like this, so I know what I am talking about.
There is nothing logical behind such behaviour.
Most traders react with their primitive minds and are held hostage to fear and greed.
What you can do to fix this?
One powerful way is by using a trading journal and start tracking simple statistics of your trades.
A trading journal provides an objective record of your trades, allowing you to step back and evaluate your decisions without the influence of real-time emotions.
How To Do it?
Write down what your actual result was and in another column write what your result would have been if you had stuck to the original rules you set.
After some time you will begin to see a big difference between the two.
The Truth Will Set You Free
Statistics and hard data that you collected will show you something that you can't run from and won’t be able to deny.
Whenever you will be tempted to break, bend, or ignore your rules again – Just remember what the statistics showed you.
You will know that statistically speaking – breaking a rule hurts you and your bottom line 10x more.
And you won’t do it ever again.
And that's a wrap!
I hope you enjoyed today's blog if you did comment below and let me know your thoughts!
Happy Trading!
Alan Edward
THE DIVERGENT TRADER
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