THE RIGHT MENTAL STATE
 
 
Many traders feel that if they have a good method then trading success is assured. They go in search for such a method, moving first to Fundamental analysis and then on to Technical analysis. If these two could do the job, then people would all be analysts! The very fact that analysts are not exactly in the high tax bracket should tell you the story. Analysis can set up the odds but translating those odds into success depends on the skills of the Trader. Only a detached and unemotional state of mind allows us to make our decisions objectively. The hardest part of trading is the part that YOU must do to win. The link from your method to enhancement of your mental approach will develop your winning and confident attitude each trading day. What is a mental state that will let you trade effectively? When you are happy, rested, alert and ready for any challenges that come your way. You feel in control. Keeping your emotions in control, you are choosing to change your mental state to optimal for trading and winning. Your heart is not racing, pulse is not pounding, fear is not interfering with your ability to make effective decisions, thinking is clear on any stage of any trade you take. A trader that experiences strong emotions loses the ability to see the reality of the trade.
 
Many traders check out their strategies on paper. Here the accuracy is more than 80%. But when the money is on the line, the pressure is so high, the money so important to them that all objectivity (which is so present in paper trades) is lost. Trading can be profitable and fun when you are not focusing on money. Sounds paradoxical? It is however true. Money is a by- product of proper actions in trading. And trading is far more than just making money. You define a winning trade and when you see the pattern or setup, you take the trade - easily, without hesitation, feeling good about it. You work the trade right and the money comes as reward for the job well done.
 
What makes the difference between a winning trader and a losing trader? Only their thinking. Because action is dependent on the right quality of thoughts.
 
In daytrading the price patterns form very quickly and require a disciplined, automatic response on trading signals. A disadvantage of a intraday trading is the compulsion to overtrade. The constant price changes and the dancing lights on the Nse terminal lure you into action. Quickly responding to signals and a deep need for action when you really should not take a trade must be dealt with by every daytrader. This is not something that everyone is able to do easily. Examine yourself. See how well equipped you are to making fast decisions that may sometime involve loss of thousands.
 
Another problem is not taking action at all, even when valid signals tell you probabilities are on your side. Not taking action simply means you are not in the game. For some reason you believe that not taking a trade will be less painful than taking it. The truth is : if you want to be a trader, you must trade, you must change yourself from fearing to take a trade to cold-blooded readiness to react on valid signal. Working toward your goals and dreams, not sitting and doing nothing.
 
When selecting or creating an investing methodology, you must consider the following aspects: Entry, Exit, Money Management, the Market, and Personalization of the System.
 
A trader that cannot execute a trade is not likely to be successful at trading. Whether you can execute is related to the amount of fear your brain generates and amount of confidence you have. Fear is the result of your beliefs about the nature of the market. What you actually fear is not the market, but your inability to act without hesitation when you need to. You have to learn what to fear and realize that you are free to act or not. Is market really threatening you? The market can’t do anything to you that you don't allow.
 
What produces the fear we experience? Biggest fear producer is Loss. You enter a trade, you find yourself to be on the wrong side. Majority of losing traders will wish, hope and pray that the trade will turn around, waiting one more tick, one more second. The loss meanwhile continues to grow. In fact you are doing nothing. Effective way to get rid of fear is to change your perception.
 
Ability to act is based on your mental state at exact moment you have to take a trade. This state is controlled by your values and beliefs. When you are in power, you easily take action. When you are in a state of powerlessness, you wait, trying to avoid the situation, and avoid the pain you do not want to experience. Part of you wants one thing, but another stronger part wants something entirely different. Act immediately, once your criteria for a losing trade has been met. Next trade awaits right around the corner. Each trade is a new trade. Forget about how you did on the previous one, profit or loss. Start clean.
 
Success is unlikely to come without consistency. Believing that you can actually master the Game is crucial. Everyone is capable of being a successful trader. Good attitude, passion and undivided responsibility when mastering the Game of Trading are the must and can make a good trader even from self-doubter.