Welcome To Street Investment
By Admin
Posted on August 6, 2024
In this world, there have been many traders, and many are still active, but only 5% to 10% of traders are actually profitable. Have you ever wondered why that is?
Despite there being so many traders, why are most people in the world still poor? If everyone trades and trading is shown to be so easy on social media, then everyone should be rich.
What do the 5% to 10% of traders do that makes them profitable, while the rest are not? The answer is very clear: they understand trading psychology, which 90% of people fail to grasp.
So guys, today’s post is about the psychology of successful traders. How do they view trading? How do they manage risk? And the most important question is, how do they make a profit?
So today, we are going to cover all these topics one by one. Make sure to read the entire article so that one day you can also be among the 5% to 10% of successful traders.
You must have heard from many traders that trading is 90% about mindset and 10% about risk management and strategies. But still, many traders start trading after watching a few videos on social media, without any proper mindset, and end up losing all their capital in one go. This happens because their mindset is focused on doubling their capital rather than protecting it from loss. That’s why trading psychology is the first thing you should learn and practice.
Look, trading is not as easy as some people show on social media, and that’s why 90% of people think trading is just what they see on Instagram reels. They use the same strategies and end up losing. That’s why it’s important to learn to trade properly. Register at Street Investment’s trading institute so that you too can become a successful trader.
Also Read: All Option Trading Strategies You Can’t Afford to Miss Before Trading in 2024
Do you know what pro traders do? They don’t take excessive risks; they invest only as much as they are prepared to lose. They are humans too and feel bad about losses, but their focus isn’t on maximizing profits. Their mindset is on minimizing losses as much as possible. Do you understand?
In trading, you’ll experience many phases: lots of wins, lots of losses. But there will be one crucial phase where you might lose your most important asset: your focus. From the day you started trading, you accepted mental stress without even realizing it. So, when you’re making profits, don’t think of yourself as the center of the earth. And when you face losses, just stay focused. If your strategy is solid, you’ll get back on track.
You might have noticed that some people are content with a little, while others stay frustrated despite having a lot. Now, you might be wondering why I’m saying all this. The point is that some traders end up converting their profits into losses because, when they’re in profit, they don’t book their gains. They want to hit their exact target, but the market doesn’t always align with their expectations. That’s why trailing your stop-loss is crucial. You won’t always hit your exact target, so develop strategies to trail your stop-loss effectively.
What I mean is, don’t make trading your career just yet. Many traders start seeing profits and then quit their jobs to focus solely on trading, but a professional trader usually only makes trading their full-time career after years of experience. Only consider making trading your career once you’ve mastered it and achieved consistent profits.
The more freely you approach trading, the more successful you’ll be. Successful traders never rely solely on trading; they always have a secondary source of income. This way, if they experience losses, they don’t have the mental stress of worrying about how to cover their living expenses. Therefore, maintaining a secondary source of income is important.
90% of traders think of trading as a way to double their money, which it is not. They believe they can quickly turn $100 into 100x that amount, which is completely unrealistic. Even a professional trader cannot achieve a 100x return on their capital. New traders need to understand that they don’t know much about trading and should focus only on learning during their initial years.
One thing professional traders do is continuously adapt themselves to the market’s nature. They know they can’t control the market, so they accept losses and focus on the next trade. In contrast, a normal or new trader might panic after a loss, either stopping trading altogether or overtrading and depleting their remaining capital. New traders need to learn that the market won’t always move according to their predictions, and they won’t always make a profit. The same applies to losses, but if you stop trading after losses, you’ll never make it to the list of 5% to 10% successful traders.
When a novice enters a trade, they often expect their money to double. This mentality leads them to the market, but when they start making a profit, they exit the trade quickly. Conversely, if they’re in a loss, they hold onto the position and end up taking bigger losses. They book profits early and take smaller gains because they lack a trading plan. Their psychology forces them to book profits immediately. If you want to better understand trading psychology, you can read my article where I explain trading psychology in detail and how to improve your mentality in trading. It’s worth reading.
Treat trading like a business, and only then will you understand how to trade effectively. All professional traders view trading from a business perspective. Trading essentially means buying low and selling high for profit, and avoiding trades where the potential loss is too high. Simplify your approach with this mentality, and you’ll eventually become a successful trader with patience, good risk management, and everything else essential for becoming a perfect trader.
Most profitable traders have certain Trading rules that they incorporate into their trading to benefit themselves. They don’t just follow the rules that circulate online. In trading, you should create your own rules based on your convenience because the 5% to 10% of profitable traders have set their own rules during their trading journey. In contrast, most novice traders don’t add these important things to their trading life, which is why they remain in the 90% of losing traders.
So today’s post was about understanding the mindset of the 5% to 10% of profitable traders, what they do differently to minimize losses, and what you can learn from them to ensure your trading journey remains profitable.
There might be some mistakes, but you need to work on them at the time instead of giving up. You have to accept your losses and understand each trade thoroughly to see how you could have done better. In losing trades, focus on figuring out why the loss happened and develop strategies to prevent it from happening next time. This is what profitable traders do, which is why they are successful today.
Best of luck to all new traders from Street Investment! And don’t forget, the most important aspect of trading is your psychology.
