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Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible. -Ed Seykota
Traders can make psychological mistakes that can quickly endanger their career. Here are a few examples:
They take on more risk than they can deal with. When stress takes over, traders start making bad decisions.
They become married to a trade. They ignore their stop losses, letting stop losses mount because they wan to be right.
Their egos take over their trading. They are more concerned about proving how smart or clever than they are about making money.
Their system does not match their personality or lifestyle. Someone who likes fast paced action should not be a long term growth investor, for example.
A trader loses many times in a row, so they panic and change systems. If you have a proven system, trade it for the long term benefits.
Here are some solutions:
Understand the possible risk of loss in any trade and accept that from the start. If you are stressed out, you are trading too big, size down.
Honor your stop loss or trailing stop the first time. Trust me, it is not worth it on your nerves or psyche to hold a losing trade.
If you are a disciplined trader, then it is your system that wins and loses on every trade, not you. It is not a victory or loss for your ego after each winning or losing trade. Trend traders make money when there is a trend, growth stock investors make money in markets rewarding growth stocks, day traders make money when their planned entries work out.
You must adjust what you are trading, the time frame you are trading, and how big you are trading until you are completely comfortable with your trading plan.
Decide who you are as a trader. Find the system that fits you, and stick with it over to improve your trading success.