How to Prepare for a trading day

Years of my interaction with traders , I’ve realized that most of the traders do not have proper mindset for trading. Its a difference between a Champion and Normal Sportsman.  Mindset make such a major difference,  and  most traders have gambler  mindset till the time trade and when they lose out all blame market . From the beginning, middle and after the end of a trade, most people have their mind and focus on the wrong things.

Many traders during my coaching session have asked How we should do trading, let me try to explain this

Preparation Required before Trading Day Begin

• Prepare a trading plan based on your trading strategy

• Calculate Stop loss,Trade Size  and ask yourself , Am i comfortable if this trade go and Hit my Stoploss. – don’t place it too close to your entry just because you want to trade a bigger position size. Do not place too close and to far, It should be decided based on your strategy which a trader MUST backtest.

• Get Comfortable in taking losses–Enter a trade with mindset that it will be a loser and will I be able to digest loss and move to another trade.  You need to mentally accept that any one trade can lose. Always remember every trade is random in nature and outcomes of last trade should not effect the outcome of next trade you are going to place. Trading is a WAR if you lose few battles you do not lose the WAR. Learn and Move ON.

When You are in Trade

During the trade is where most traders lose out, Most of traders find it very difficult to follow their trading plan. They sit for hours staring at their trades, watching the charts, etc. This is unhealthy and it’s not part of proper trading nor the proper trading mindset.

• Wait for target and SL  – Have a predefined level where you will either book loss or profit. Your goal is to leave the trade alone and market decide to give you money or take away from you.  Do not change your plan once the trade in placed.

• Trading is a Waiting Game – Money is made when you sit on to your trade. But, if you sit there watching every little one, you’re probably going to react by closing the trade early or making some other stupid trading mistake. The most important thing you can do once your trade is all set up, is nothing.

• Never Deviate from Plan –If you find that you’re constantly wanting to adjust profit targets, stop losses or close or add to positions, you are probably over-thinking it and becoming over-involved. Over of anything is harmful to trading

 

To Be Continued