The Trading Psyche
Each trader, before taking up a Trade will have a target like making a 100 pip increase or 50 pip pick up and will have his Money Management system properly implanted to ensure the Trade Capital. The mind is exceptionally positive and his psyche in slanted forthright to expect some positive results. His mind is undisturbed and moves relentlessly until that time the price action is moving towards his intended direction. Once the value began to invert and closer to approach the stop loss, the mind changes drastically and the Trader begins to think adversely in view of apprehension of loss or begins to freeze or acts nonsensically. Such a variety of musings and thoughts begin to immerse his cerebrum making a mind boggling equation or hypothesis in the journey to battle the loss that the price action drawing closer.
The Correct Approach to Trade
Before starting the trade, the Trader ought to have a reasonable attitude that this trade is going to end up in loss. At the point when the attitude is sorted out to acknowledge a loss, the following move is to lessen the loss esteem gradually and relentlessly. From there on, when the stop loss is going to move towards the expected direction that can guarantee a few benefits, the stop loss is balanced in order to decrease the underlying loss, the mind turns positive and every one of the contemplations and activities will prompt right choices, in light of the fact that there is no trepidation of loss now which can aggravate the outlook of the Trader.
The sample can give you a better comprehension of what I intend to express. I have opened up a Trade, a Buy request on Nifty at 7450 and the stop loss is 7400 and take profit at 7550. On the off chance that I am wrong, I will lose 50 pips and in the event that I am correct, I will wind up with 100 pips which is my unique desire. The present market price of Nifty is 7475 which has climbed by 25 pips, now you are changing the stop loss from the first position at 7400 to the opening value which is 7450 and have decreased your underlying loss from 50 pips to 0 which implies you have changed over your open position into an unhindered trade or a free trade. This is an incredible triumph that gives the Trader a chance to ride his benefits until the steam of the pattern is reduced.
Trade set up is about tolerating the amount of cash that you are readied to lose on a solitary trade. Subsequent to choosing the careful loss, the Trader can work after lessening his loss as the trade advances. The primary focus of the Trader is to begin decreasing his loss until it had ended up zero, when this happens, you are certain to take right trade choices. This is how trading is to be done. There is no royal road to success, one at a time and rest to follow one after other. This alone can keep the Trader's mind calm and steady and will allow to trade the bourse in a subconscious mind, eliminating all the nuisance of emotions.
Simple Rules of Trade
- Understanding the trend
- Your objective to take up this trade
- How much loss that can be accepted on a particular trade
- The exit strategy
- Restricting to "One Trade A Day" principle