Trading Psychology and Can Be Your Best Financial Friend

Let me explain to you how it all falls into place. It is nearly impossible not to fall into this trap when you’re first starting out; it is easy to assume that what you don’t know about the markets is the cause of your losses and lack of consistent results.

What the trader doesn’t take into consideration during this period is the fact that no matter how much the trader learns about the market’s behavior, no matter how brilliant an analyst the day trader becomes, he will never be able to anticipate every possible way the market will move or cause him to lose money.

One of the factors that reinforces this belief is the fact that the markets are always in a state of uncertainty and peoples naturally don’t feel comfortable and get nervous around uncertain situations and this creates further vulnerability in beginners.

Furthermore if the trader perceives the market information as fearful or hurtful, he will struggle and it will feel like he is struggling against the market. The struggle however is taking place inside of the trader’s mind. If you feel like you are struggling when daytrading stocks, it is because you are struggling against your own internal, conflict, and fears.

As you can probably imagine, this creates a major psychological obstacle for most people because the positive results and consistency they seek in their trading is really not in the markets but inside their mind.

It is their attitudes and beliefs about losing money and being wrong, and not their technique or market knowledge that is the cause of the problem. And it is a fundamental shift in their attitude that accounts for success, not some brilliant realization about the markets or learning a secret system, as most people erroneously belief.

Understanding the real meaning of risk as it pertains to trading and understanding the belief system of a beginner is only the first step in the process of integrating that concept at a functional core level. This is particularly true of concepts that deal with thinking in probabilities and changing one’s belief system.