Three unconventional psychological methods of trading

When a trader has already studied the basic methods of price analysis and worked on a real account, it’s time to study the psychology of trading. If you do not take its nuances into account, you won’t get stable positive results.

“Insanity is doing the same thing over and over again and expecting different results.” A. Einstein

Many of you are familiar with the most common complexes and psychological mistakes in trading. Especially since we also pay a lot of attention to this topic. However, in this article we will talk about some psychological approaches to trading, which obviously do not conform to the standard ones. And we are sure that after reading the article to the end, you will change your view of some aspects of trading.

One. Work against yourself

It doesn’t mean that you have to trade upside down or outdoors in a heavy rain. Our recommendation is to choose a trading style that is absolutely not specific to your behavior patterns. For example, in real life you are a calm person who can not be destabilised. It may seem that your character is perfect for trading, but in fact, it isn’t. There is no character or type of personality which is suitable for trading. All traders are regularly provoked by price bounces or strategy signals. Even the most stable psyche can be shattered or even destroyed.

This is the reason why you should not look for a safe haven in the form of a trading style or strategy which will match your character. Work in someone else’s field, but keep in mind the risks.

Choose a relaxed trading style who carries out a small number of transactions, if you are an impulsive person, who is difficult to stay at rest in everyday life. Or become an active trader and carry out a lot of deals, if you are as calm as a Buddhist monk. The psychology of trading is the science of how to deceive oneself.

Two. Treat your vision as an instrument

Your brain gets about 80% of all information through your eyes. Your mood improves when you see something pleasant in front of you. That’s why funny videos about cats are so popular. Due to the lack of positive information, we often have to resort to such kind of visual doping. But it’s not just about that. To avoid visual fatigue (and psychological distraction), one’d eyes need a constant “change of scenery.” While trading, you deal with a lot of screen information. Constant eye strain affects your trade negatively: you can simply skip the right moment to close or open a transaction. Just follow our advice: to keep your eyesight toned, change the wallpaper of the trading platform from light to dark or vice versa. Experiment with the brightness and contrast of your monitor. In addition to the positive effect for the eyes, this will shake up your brain, which gets tired of the chart monotony. By the way, the videos about cats mentioned above are also highly recommended to watch.

Three. Fall in love with every third bad transaction

Do you want to keep calm after three, four or more unsuccessful transactions? Learn to find good about them and you will forget about the losses. We agree that it is very difficult to “fall in love” with a transaction which caused real losses. Therefore, we suggest that you try the following method. Promise yourself to describe every third unprofitable transaction using the following algorithm:

  • Why did you open a transaction? (Was it a true signal of your strategy or just your imagination?)
  • Would you do it again, if you do not think of its loss?
  • What do you plan to do next: change the strategy or the asset, stop trading until tomorrow or continue?

Reread these answers and make the conclusions. Be sure you start with the words: “I love this transaction because …”. The phrase can have any ending, from “it reminded me of the need to trade only using the signal of my strategy” to “it was carried out properly, and I know that I will level the situation off.” Don’t forget about the importance of trading psychology. Constantly try and look for some new, individual psychological trading approaches. People are different, there is no single success recipe. Remember that trading is not just following recommendations. Trading is the search for what is best for you. Are you ready for the improvements? Just start now.

Related posts
Technical Analysis

The “Moving Average” indicator

Moving Average (MA) is a trend indicator in technical analysis, that many strategies are based on. It is a line on the chart, which shows the average value of an asset over a...