Home Advanced Psychology and trading Top Psychological Practices An Aspiring Professional Trader Should Master!

Top Psychological Practices An Aspiring Professional Trader Should Master!



Most traders have certain fundamental psychological issues. They arise from the experience of the first five years of life. For example, the problem might be self-esteem, childhood fears, getting along with other people, etc.

Once a person can deal with these issues adopting a low-risk game plan becomes easy. As long as those issues remain, the market is simply a place where you can play different games. But your real goal is to work your interactions with the market and learn how to deal with such issues.

How to develop a low-risk game plan?

The key point for a trader is to profit from low-risk ideas. Most traders don’t know the meaning of low-risk trades. A lot of people with knowledge about the market are stuck in the process of analysing it and they forget their main purpose is taking low-risk trades. All traders must develop a written low-risk game plan.

Creating a low-risk game plan makes you error-free to some extent. When you have developed a proper plan, you will not hold any bias towards the market, and you can also continue testing your plan. This is necessary to determine whether or not your plan is risk-free.

Overcoming hurdles in developing a low-risk game plan

  • Spontaneous trading occurs for several reasons. Many traders are spontaneous because they are unaware of what they are doing. As a result, they trade randomly. A written plan can change the way of trading. Many traders do pattern trading. This sort of trading is natural for any trader. If this is what fits you the best, then the game plan needs to be made accordingly. Every style of trading has a different game plan.
  • You should be in a position to create your own set of rules while planning. You can only develop consistency by following the rules you have made. Making a mistake is not about losing money. We say you have committed a mistake if you have not followed your rules. You should have a written set of rules. If you made a plan, then any decision you take outside that trading plan is a mistake.
  • Only businesses that have a plan survive. Trading is a form of business. Traders who want to thrive in this business needs to have a low-risk plan.

Trading exercises

The most important mental trading exercises are Mental Practice, Focus and Intention.

Mental practice

Why do we need mental practice?

Mental practice is necessary is for the following reasons:

  • Our brain cannot process huge amounts of information all at once.
  • We cannot perform to our fullest when we are under stress.
  • Mental practice helps you to avoid mistakes where otherwise it could have cost you money.
  • To prevent a trading disaster, you need to practice different solutions to the same problem. So, it becomes easier and automatic next time and onwards.
  • The two types of mental practices are; Worst case contingency planning and Daily mental rehearsal.
  • Finally, mental practice can save a lot of money by preventing you from making mistakes.
Key mental states of mental practice
  • Do not hesitate to try many options while trading.
  • Be willing to accept anything that the market will present to you.
Achieving mental practice strength
  • Think about the reasons for why are you not able to follow your rules.
  • For each reason, come up with a solution that reduces or avoids that problem.
  • Mentally practice that solution by rehearsing it every-day during trading.
  • Make a note of the differences in your trading behaviour. And also, how has your performance changed.

Focus and Intention

Why do you need Focus and Intention?
  • By keeping focus and intention, you get closer to the idea you want to execute.
  • You increase your ability for internal guidance. This ability can be developed through experience. There is no need to ask anybody else’s advice.
  • As your relationship with internal guidance gets stronger, you can come up with solutions to all kinds of problems.
  • When you want something, you need to believe that it is already present with you. Begin behaving in a way as if you have it right now.
Key Mental States for Focus and Intention
  • You need to have the highest focus and concentration on what you want.
  • Keep a positive feeling. Always keep the happy feeling of receiving that thing.

Achieving Focus and Intention

  1. Start your day by establishing two goals that you would want to achieve. Represent them using two arrows.
  2. Remove the first arrow of intention and then take the position of an archer. Now put maximum weight on the front thigh.
  3. Locate an imaginary point on the board by keeping both eyes open. Then try to focus on your goal.
  4. Now take deep breaths for at least 30 seconds. Continue this exercise as long as you can.
  5. When you are done with this, you then release your arrow.
  6. Change your thigh and reverse your position and, then repeat the steps from 2 to 5 with the other goal.
  7. Have strong faith and believe that you will receive what you want. And then feel elated knowing that it will happen.
  8. Try doing all things possible needed to achieve this focus. It also means changing your trading plan if necessary.

One thing to remember after you complete your archer pose is to thank the Universe by giving its due credit.

Final words

When you do your periodic review, once again read your rules and plan. This means going through your business plan step-by-step. By reviewing you get a deeper understanding of your strengths and weaknesses.

It might also take a whole day to do a thorough review. If you trade three to four times a week, then you need to review every three to four months. If you are trading just a few times a month, then a semiannual review would be appropriate. Lastly, if you find trades once a month, then an annual review is sufficient.

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