Today we go deeper than usual on trading psychology, emotion by emotion, through the different phases of a trade.
Then I want to show you the simple habit almost no mentor talks about, the one that gives you a real edge and even helps you build intuition.
Key takeaways
You face fear of missing out and fear of failure, and both pull you away from an abundance mindset.
Do the thinking beforehand, then just take the trade, because overthinking in the moment invents fear or overconfidence.
The main emotion is hope, and there should be no hope in trading, because hope is what turns a small loss into a bigger one.
Greed pulls both ways, so use tools like two positions, one exiting at 50% and one at 100%, to take the emotion out.
A loss brings frustration and a win brings overconfidence, and neither serves your next decision.
Ten minutes of mindfulness a day lets you see your own thoughts and manage the emotion instead of acting on it.
The emotions before and during a trade
Before you enter, fear of missing out makes you want to jump in, which is the opposite of the abundance mindset trading needs. On the other side, fear of failure stops you taking your own setup.
As Mark Douglas says, when your setup shows up, do not think about anything, just enter the trade. The thinking is done when you built the strategy.
Once you are in and running at a loss, the emotion is hope. You keep hoping price returns, and that is exactly how you let a loss get bigger.
“There should be no hope in trading, whether hoping for profit or hoping a loss comes back to break even.”
After the trade closes
If the trade ends in a loss, you feel frustration. You might blame the broker, which does happen sometimes, or worse, think the market is watching your trade personally.
It is not. The forex market is the most liquid in the world, with 7 trillion traded every single day, so nobody is looking at your position.
If the trade ends in profit, you feel overconfidence. You think you have figured it out, and that leads you to risk too much and take setups outside your plan.
The hidden advantage: meditation
The simple solution is to meditate. Mentors are far too focused on drawing lines and finding the best indicator, and they skip mindfulness.
Meditation gives you a third person view of your own thoughts. Next time you are in a loss, you can see that you are feeling hopeful and know that is the wrong emotion to act on.
It also builds intuition. I have exited trades because I had a negative feeling even though my plan was fine, and they went straight into loss. That feeling is the last thing you rely on, but it is good to have.
How to actually do it
There is no complicated method. You sit still for a few minutes and try not to think about anything, not even about whether you are meditating correctly.
A simple tip is to count your breaths for ten minutes, and a guided meditation will walk you through each step. It is low commitment for a very big benefit.
Do it every day before you start trading. Even if you have not placed your first trade yet, it improves focus so you learn and retain information better.
With your mindset handled, compare firms on Propvator and choose one that fits how you trade.