Trading Psychology: Mastering the Trader’s Mindset

“Trading Psychology” … Trader psychology comes down to the full set of emotions you feel before, during and after a trade.

It’s common for emotions to slip into your buy and sell decisions on the financial markets, as well as into the position size you choose to take. Human beings are emotional creatures and don’t always act rationally — and that’s perfectly normal …

It’s crowd behavior that gives rise to the huge speculative bubbles that drift away from any fundamental valuation out of sheer greed.

On top of that, most crashes are driven by fear, which pushes the “weak hands” to sell. A chain reaction follows, all the way down to absurd valuations … especially on the crypto market.

Crowd psychology drives the market toward extremes, and it’s the individual trader’s psychology that makes them commit huge mistakes. In short, to be good, you’re almost asked to become a robot…

And yet, when you define a trading plan or trading strategies, you have to show empathy — to put yourself in the shoes of both the bad trader and the financial institutions. The idea is to position yourself between the two, anticipating their every move while staying completely free of emotion.

Trading Psychology: Which Emotions Do You Feel When Trading?!

Emotions in trading are a very peculiar thing … It’s essential to detach from them completely. To help you do that, here’s a reminder of the emotions you’re likely to feel before, during or after placing one or more trades.

Trading and Psychology | Anger

It leads to revenge trading and to immediately re-entering positions after a losing trade: extremely dangerous.

Trader Psychology | Fear

It regularly causes hesitation when it’s time to take an entry, or to hold a winner in a swing even though the trend is in your favor: missed gains

Trading and Psychology | Disgust

It can lead to a genuine loss of confidence in a trade. Don’t confuse disgust toward a market that’s misbehaving with disgust toward your own lack of discipline.

Trader Psychology | Euphoria

Surprisingly, happiness isn’t an emotion to embrace in trading either, because it’s intoxicating … If you let it seep in for more than a few seconds, it can easily lead you to trade too big and forget your risk management.

This usually happens after a big winning trade or a winning streak, when euphoria starts to interfere with a trading plan or system.

Trading and Psychology | Sadness

It can lead to real difficulty when the time comes to take the next entry or to exit losing positions. Fear can strike in a thousand ways, but in trading it generally shows up after a very big loss, a losing streak and therefore a sharp reduction in trading capital. Never forget your Risk Management — it will spare you the tears!

Trader Psychology | Surprise

A surprise often leads us to make irrational decisions and suddenly abandon THE PLAN. Careful — chance has no business here. You create your own luck; don’t think randomness defines your PnL.

Trading and Psychology | Apathy

Trading is a lot of work, and only passion and energy can drive you to do the work needed to reach ultimate success. You need the energy of passion to stay focused and get the work done; apathy has no place in trading.

Trader Psychology | Anxiety

It can lead to burnout due to excessive stress. Confidence in yourself and in your system will help you overcome inner anxiety.

Trading and Psychology | Passion

If you genuinely love trading the markets, only time stands between you and success. If you love trading for the wrong reasons, it can be destructive — like trying to get rich quick.

Trader Psychology | Depression

It usually leads to giving up. You can recover from a financial loss, but you can’t recover from emotional ruin. It’s time to rediscover the joy of life through simple things: sport, good food, going out, family, and so on. Anything that can help you smile again is worth taking, and maybe you’ll come back solid enough to withstand a thousand disappointments and setbacks without flinching.

Trading and Psychology | Contempt

Feeling contempt for the markets or for other traders will generally drag you toward bad biases and poor decision-making. Stay humble — defeat is lying in wait and won’t hesitate to ambush you if you lose sight of your goals.

Trader Psychology | Pride

It can lead you to trade too big, to not cut losses quickly enough, and to try to be right at any cost.

You have nothing to prove to anyone, so carry on with your plan without wavering. Positive interference has to be channeled too. Be proud of yourself and of what you do — otherwise it will lead nowhere — but stay humble!

Trading and Psychology | Shame

This one is truly dangerous, because if you’re a bit introverted, you can flat-out stop talking to others, you hide, and you can no longer learn as part of a group.

It’s common … we all remember someone at middle school, high school, or even in higher education, all because they made a mistake.

In that situation, are you one of those who push back and shut people up, or do you go silent forever?

Trader Psychology | Envy

Envy leads to an external focus instead of giving you the internal focus — full concentration on your screens, the data and your goals. If you put in the work, you’ll have everything you want; there’s no point envying anyone.

Trading is only a long-term success if it’s practiced rationally. Emotions are only worth something if they create the energy we need to work and reach our goals.

They’re only positive in trading if they protect our psychological limits, but they’re no advantage if all they do is prop up an ego that’s out of control.

We simply need to be aware of them so we can use them wisely. We need to be aware of our emotions and understand the message they’re sending. Because when you bottle things up, it comes back out sooner or later in a negative way, in our personal relationships or our work.

Controlling your emotions is essential in any professional activity that forces us to take risks, but in trading it’s far more subtle!

Trading Psychology: The 3 Most Common Psychological Mistakes

Three of the main psychological mistakes that can be made in trading — by new and experienced traders alike — are:

1. the fear of missing a great opportunity (FOMO),
2. revenge-driven trading
3. gambler-like behavior: the downward spiral.

How Do Traders Deal With FOMO?

FOMO stands for Fear Of Missing Out — that is, the fear of missing out on an income opportunity or any other kind of opportunity.

FOMO can stem from several things: the moonboys sprouting up all over social media are a sad example. If you see me making profits, rest assured it’s because I’ve been working on my technique and my mindset for years, not for a few weeks.

In trading and investing, FOMO is also the psychological mistake of seeing a move on a market you’re not positioned in, while feeling a strong desire and urge to follow a trend. The problem is that it usually happens too late.

The fear of missing something can push you into a trade outside your trading plan and your system, with no valid signal, driven by the emotional desire to take part in a strong move you missed but that’s still underway. The fear is of completely missing out on a great, profitable opportunity and deciding “Better late than never,” which is almost always a psychological and technical mistake!

You’re blinded by all that green and you forget the technical basics. Your filter turns into a sieve …

The best way to fight FOMO is to believe that the current opportunity is just one of the next 100 you’ll get in the future, and that all you have to do is wait for the next one. And between us, if trading were a twice-a-year or seasonal activity, I wouldn’t be here — trust me!

A trader also has to focus on their own watchlist and strategy.

It’s essential to stick to your system even when tempting things are offered to you; don’t step outside the quantified edge you’ve defined.

Playing charts outside the parameters you’ve set quickly becomes a problem when things don’t go as planned. And that’s actually pretty common when the trend isn’t clear.

A real trader also has to stay within their timeframe and resist the temptation to gamble. Running your trading like a business forces you to work your system rather than chase random bets.

A trade should never make much sense to a trader who’s thinking about the big picture and long-term trading success.

The value of an opportunity lies in the timing, and if your entry is too late, what looks like a blessing can quickly become a curse.

Temptation, jealousy and greed are all emotional signals triggered by FOMO, and the cure for them is discipline and focus on your own system and your edge. Too many traders can drown in losses chasing rainbows that quickly turn into waterfalls.

FOMO is expensive — don’t be one of those who fuel it!

How to Avoid Revenge Trading

Revenge trading is the strictly irrational desire to win back your losses on the same market, the same chart and the same asset on which you just lost, as if it were a point of honor not to lose twice in a row.

The subtle truth in trading is that your only enemy is you!

Revenge trading is usually triggered by an ego that feels beaten by a price move (WTF) and wants revenge on the chart by making up the losses with new profits. A trader can become obsessed with winning their money back on the very chart where they lost it, just to feel even by trading it again.

To each their own, but it can come from several feelings; for example, feeling superior or having won against an imaginary opponent … Ridiculous, you’ll tell me.

That said, who has never sworn at their computer, shouting “IN YOUR FACE!”?!

Among the most competitive of us, it wreaks havoc! We hate losing and we always want to prove we’re right. It’s human, so to counter it you have to clear a major psychological threshold.

Like any mindset problem, the solution to this flaw is far easier said than done …

1. Don’t take losses personally,
2. Follow a system with a diversified watchlist
3. Move on to the next trading opportunity “without looking in the rear-view mirror *

With proper position sizing and risk management, every trade is really just one of the next 100 trades. If you put your ego on the line every single time, you’re in for endless headaches.

Why Is It Important to Avoid Revenge Trading?

1. It blinds you to other trading opportunities.
2. Your emotions take control.

The crypto market is vast. No one in this market is required to win their money back the same way they lost it.

There was a reason you missed that trade; define it clearly in your journal, but don’t come back to it before doing your weekly or monthly review.

A Quick Word of Warning: Revenge trading is not part of any profitable trading system known to date.

Whatever happens, never make your desire for revenge a priority. This isn’t a bet among friends, and no one is going to come and tell you “Nice one … you got me!” if by luck your diabolical plan works out.

How to Avoid the “Gambler’s” Psychological Mistake

This mindset mistake lies in the failure to understand the independence of chance from random events.

It naturally leads you to believe you can predict the outcome of a random event based on the results of previous events.

Careful — I’m talking here about random events, not the recurring events we use every day in trading to anticipate upcoming moves.

The classic example of the gambler’s fallacy happens when someone plays heads or tails, or bets on red and black at roulette. Whatever your results, you’ll tend to build probabilities out of them.

In reality, every random event is unique and has strictly no effect on what follows.

A profitable trader has understood that every trade in the market is unique and carries a share of chance that’s impossible to master. No trade has a certain outcome in the markets, and no chart has any duty to bounce back up no matter how many times it has fallen, and no next trade has to be a winner just because a previous run is in the red.

Anything can happen at any moment, and that’s why traders need stop-losses, need to master trailing stops, and need proper position sizing to manage uncertainty. There are also suitable strategies like hedging to reduce the possible impact of chance…

A profitable trader has to think in terms of a positive-expectancy model across a large sample of trade signals, where every trade is managed for minimal losses and maximal returns.

Successful traders use discipline, logic, mathematics and focus to overcome mental mistakes and turn a profit.

Forget the lucky charms — they have no place here! That said, it’s entirely possible to compare trading to some more everyday situations… Do you like poker?!

Trading Psychology: But What’s Poker Doing in All This?!

Becoming a trader (or a professional poker player) means solving a two-sided problem: knowing how to constantly evolve in assessing your risk-taking and knowing how to develop, refine and deploy ways of trading, or make them as effective as possible.

For most people, a trader’s success lies less in some unlikely moment in the spotlight (access to artificial glory) than in the result of steady progress — a continuous, evolving process in which every learner starts with innate skills and tries to outperform their peers. This chapter will explore the skills shared by successful traders and the common mistakes that keep newcomers from developing their potential.

Not all traders approach the work the same way, and not all trading jobs are alike. Understanding these subtle distinctions will shed light on why the subject deserves a deeper look, both in terms of progress and of how long the learning takes. All roads may lead to Rome, but not all roads lead to the ideal job. In that case, every trader can start by asking themselves another question …

Am I a Poker Player?

Poker is the only casino game that, by definition, doesn’t let you know in advance the mathematically fixed odds of the player winning, whereas those odds are generally used against them. A common example: slot machines. Although chance plays its part at the deal, a poker player’s odds of winning over the long run depend mainly on their skill relative to that of their opponents.

Playing No-Limit Texas Hold’em for a significant amount of money involves the same kind of decision-making and personal stakes as managing a trading position. It’s by far the most accessible way to learn how to take risks, short of sitting down at a trading station.

Poker: A Good Way to Train?!

Poker is a game of strategy, tactics, probability and math. It’s also a useful, if simplified, simulation of trading.

Good poker players are always deep in analysis, because success depends both on an advanced understanding of the game’s underlying probabilities and on a feel for the nuances of human nature. Professionals spend a lot of time studying their opponents and characterizing their playing style according to two attributes: how much risk they take with their money and their general tendency toward passivity or aggression.

Depending on their tendency to take risks, opposing players are described as “tight” or “loose.” On crossed axes, opponents are thus sorted into four-way tables:

loose/passiveloose/aggressivetight/passivetight/aggressive

The Loose/Aggressive Player

Sometimes called a maniac, he plays wildly and without control. He’s a thrill-seeker who plays for the excitement and takes huge upswings and downswings, rarely having enough money to withstand the volatility he inflicts on himself and generally ending up broke.

The Loose/Passive Player

He gets involved indiscriminately but folds easily, frittering away small amounts of money as the game goes on. This person, derisively nicknamed a “calling station,” wants to get involved but lacks commitment, which makes them an easy target for aggressive players.

The Tight/Passive Player

He sits at the table waiting for the ideal situation that never materializes. Often called a rock, he isn’t inclined to get involved and doesn’t like taking risks when he does.

The Tight/Aggressive Player

This player will patiently wait until the odds are decisively in his favor, then act with maximum aggression to extract as much money as possible from his opponents at the table.

Poker or Trading: What’s the Right Approach?!

Most great poker professionals believe that Tight/Aggressive is the only winning behavior over the long run. More interesting still, elite players believe that a tight/aggressive approach to the game isn’t a set of natural traits.

Very few people are intuitively disciplined enough to limit their involvement to situations where they have a real statistical edge, and also willing to apply maximum pressure on their opponents.

It’s learned behavior. A winning poker player has consciously and deliberately changed their decision-making and their approach to the game to be both more calculating and more aggressive, in order to maximize their chances of success. That’s exactly the mindset that suits a professional trader, and this behavioral model fits it perfectly.

A loose/passive trader will always have a position open, but never anything significant, and will tend to give up at the first sign of a loss.

A tight/passive trader is always waiting for the perfect opportunity that never seems to show up.

The tight/aggressive trader waits until conditions are favorable, then commits to a strategy with a significant position managed in a tactical and controlled way.

Poker & Trading: Best Practices

The first thing good poker players do when they sit down at a table full of opponents is, surprisingly, nothing at all. They sit and watch the ebb and flow of the game for half an hour, an hour, or as long as it takes to preliminarily rank their opponents and see how the game is playing out right now.

They’ll study the bets, the participants’ level of aggression, and the quality of the cards being played. They’ll listen to players talk about how they played previous hands in order to get insight into their thought processes, their style and their skill level. They’ll see how much money is in play, and by whom, as an indicator of the scale of profits to be made.

Finally, they’ll make a frank assessment of themselves against what they’ve learned about the game, its participants, its demands and its profit potential relative to the risks involved. As the saying goes, “if you can’t spot the sucker at the poker table, then you’re the sucker.”

Smart players know when to get up and walk away from a game that’s too tough or that doesn’t suit their style, even without having played a single hand. They also know when to settle in for the long haul if they find a situation that looks profitable.

Trading Psychology: Don’t Confuse Gambling and Trading!

How can beginners develop a trading style similar to the tight/aggressive poker style? By understanding which attributes contribute to success and playing them up, and by recognizing destructive tendencies and seeking to avoid them.”

Be careful, though, not to confuse Gambling and Trading, because they have nothing to do with each other! In trading, you only have fun when you make profits by overcoming difficulty — that’s the key!

On several occasions, brands tied to sports betting have approached me to promote them or to offer their “signals.” Those who know me know that I replied with “We’re not interested. Best regards.”

For me it’s inconceivable to compare gambling with trading, because even though some poker players make it to the final table of tournaments very regularly and others earn a good living online, chance remains a constant.

Trading is not a game; for me that’s clear. Still, some people sometimes struggle to tell the difference and don’t hesitate to reach for max leverage as soon as they have a few trades under their belt.

If, for you, the line between gambling and trading is still thin, this mindset piece is for you!

Trader vs Gambler | Trading Is Not a Game …

Many people already think of themselves as “traders” when in reality they’re nothing but gamblers… who would probably get better odds betting on roulette than on the financial markets.

That said, we can perfectly draw the analogy: the relationship between a trader and a gambler is similar to the difference between a casino and a gambler. Indeed, the trader has to position themselves as the casino, since the odds of turning a profit must be far greater than the odds of losing!

The casino paradigm for traders was presented in “Trade like a Casino” by Richard Weissman, and this thought process can genuinely help traders become profitable. So don’t hesitate to look into it, because it can certainly help you.

Trader vs Gambler | The “Edge”: Your Advantage Over Gamblers!

The connection between a casino’s luxury and the majority of its broke addicts is easy to see…

Casinos have a statistical edge in their games of chance over the players. In fact, just try betting the color in binary fashion at roulette and you’ll very quickly no longer be welcome; it’s very frowned upon!

Time is the casino’s friend and the gambler’s enemy. The more someone tries to beat the casino, the more likely they are to lose — it’s as simple as that.

What’s more, a casino also sets limits at each table, so a gambler can’t keep doubling their bets to end up winning; here we find a perfect analogy with our famous “Risk Management.”

The casino doesn’t risk its business and its profitability on a single trade; it has table limits to make sure no single win makes a difference to its profit and loss account.

The casino lets its edge play out over a large number of trades so that the odds swing back in its favor across a large sample.

Another huge advantage of the casino is that it has no emotions; the casino doesn’t care about a player or whether that player wins or loses. The gambler, on the other hand, is highly emotional!

That’s why he sometimes tries to win back (all) his losses when things already look very bad. So he trades with the probabilities against him and generally trades bigger and bigger, hoping a win will bring him back to break-even, when all it does is drag him into ever-larger losses.

Another curse of the gambler is that, even after winning streaks, he doesn’t take his profits and doesn’t walk away with his money; he stays put and loses it all, either because he gets arrogant and trades too big, or because he loses the discipline of the strategy that had been working for a while. Gamblers are generally doomed to be losers.

Trader vs Gambler | 10 Simple Techniques to Avoid the Confusion

1. Trade based on probabilities, not on potential profits.
2. Trade small positions relative to your account, and NEVER put your entire account at risk of ruin. (See Risk Management)
3. Trade the plan, not the emotions.
4. Always enter a trade with an edge that can be clearly defined by the convergence of serious indicators.
5. Gut feeling isn’t a bad thing, but it has to be checked! Traders don’t care about our personal convictions — they play on them!
6. Trade your strategies with real money if and only if you’ve been able to verify their effectiveness through Paper Trading or solid Backtesting!
7. Managing your risk is THE number one priority. Profits are a secondary concern.
8. Start by avoiding all risk of ruin, because this is an endurance sport! Trying to get rich quick is strictly harmful.
9. Trade with discipline and focus. Don’t suddenly change the way you trade because of winning or losing streaks: Re-Backtest / Re-Paper Trading.
10. Trade the present moment! The size of past losses, or even past gains, no longer matters.

Trader vs Gambler | To Conclude, I Invite You to Ask Yourself 1 Simple Question!

Which side of the market have you planned to operate on: Casino or Gambler?

In any case, if it’s stress that’s keeping you from acting rationally, I’ve gathered ten pieces of advice below that will help you get past it.

One thing is clear in today’s world: stress is everywhere, for all sorts of reasons.

Work is more precarious than it used to be, the myth of infinite growth keeps taking hits, the limits of our planet are finally becoming clear to us, not to mention more or less occasional episodes that do nothing to help — like the economic crisis or … your in-laws visiting.

Everyone regularly has excellent reasons to feel their stress rising. In trading it’s exactly the same!

Stress in Trading | Defining the Condition

To move forward effectively in this new Mindset Tutorial, let’s first keep it simple by recalling a basic definition of stress.

According to the Larousse dictionary, it’s a “reactive state of the organism subjected to a sudden aggression.”

I’d add that it’s a state of arousal (negative or positive) that prevents us (to a certain extent) from constructing perfectly coherent verbal or behavioral responses.

Now, in trading, the coherence of our responses to the market is essential. We can’t let stress guide us, so how do we avoid that?!

So I thought it might be useful for you to know a few of my tricks for avoiding needless stress during your trading.

Trading Psychology: How to Manage Your Stress With 10 Tips

Staying calm comes from applying your plan!

It’s not by tweaking your Take Profit and Stop Loss levels that you’ll be able to relax — quite the opposite.

Avoid stress through precise risk management

If you respect your risk management, losses will quickly stop being a source of stress. They’ll become part of your daily routine. Risking 1% per trade, as I suggest to my students, lets you see far ahead!

Ensure your comfort

Comfort is very important so that our decision-making process isn’t disturbed. That means good equipment, a good chair, perfect hygiene of your workspace but also of your body! Just because you plan to work from home doesn’t mean you shouldn’t take care of yourself. On the contrary, you have more time since you’re not going to the office, so make the most of it.

Visualize your process for success

If you don’t know where you’re going in your trading or in your trading education, it’s normal for stress to take hold of you. It’s the same when you’re lost and don’t know how to get home. If you don’t have a well-established plan, or you don’t really know where you stand in this process, it’ll be hard to move forward calmly!

Manage your stress by slowing the pace

Sometimes this is a good solution! When you’re good in certain market conditions, that may not be the case all the time. So you have to know how to slow down and choose your trades sparingly — get to the essentials!

Appreciate the good moments and the good things

Being grateful for what you have is important, because it reminds us why we work. Even when you don’t have much, it’s important to fight for your slice of the pie! I’m thinking of the material side, of course, but also of your personal situation: health, friends, family, hobbies and passion, and so on

Reduce stress by staying attentive

Move forward with your eyes wide open! Pay attention to all the elements you plan to observe in order to make your decisions, but also pay attention to yourself. It’s normal to see things through when you’re motivated, but it’s not normal to come out of it overworked and depressed. Know how to say stop so you can recover your strength when needed.

Manage your stress by no longer being stubborn

As mentioned earlier, when you want something it’s normal to want to see it through no matter the sacrifices. That said, when something isn’t working in trading, move on to something else and develop new methods and strategies. Don’t wait until you watch your capital melt away to change!

Overcoming your emotions is essential to avoiding stress

Making your decisions out of fear, greed or any other harmful feeling won’t help you succeed. When you take a position, it must be based solely on your rulebook. After that, it’s about sticking to the plan — all the way to the end!

Be ready to limit the damage!

Here we come back a little to number 8, but more precisely: you have to learn to exit a position even if it usually works out — your invalidation levels must be clear and respected if they’re crossed! Since losses are regular when you trade, it’s important to know how to lose cleanly …

Stress Management in Trading | Conclusion

If you can’t manage your stress in the markets, you won’t last long in crypto trading or on the crypto markets in general. You can think of this aspect as one of the pillars of your longevity. Even if you cope with it for several months, you’ll eventually grow disillusioned, with burnout or a breakdown on the horizon!

As I’ve already said, it’s perfectly normal to want to see things through when you have a goal, but if you can’t manage to relax and stay relaxed, I wouldn’t bet much on your chances!

That’s why I sincerely hope these simple tips will help you manage your stress day to day, so you can perform by making logical decisions!

Trading Psychology: Perseverance Is THE Key!

At the start, most of us have wanted to give up… And yet perseverance and patience are the keys to success in trading, as everywhere!

During the first few years, you’ll spend most of your time studying and spending money to train and learn. As soon as you show up expecting to make money fast and instead lose some, it’s natural to start asking yourself a few questions.

It’s perfectly natural to be impatient — it may even suggest you’re ambitious — but it makes no sense when it comes to trading.

Trading is a two-way competition, and you have to be on the right side of the trade to make profits. There’s no doubt about it, and rest assured that if you lack patience, someone else will know how to take advantage of it.

A successful trade doesn’t happen every 5 minutes. In fact, many highly profitable traders have a win rate that doesn’t exceed 60%. It’s rather the size of their gains relative to their losses, and their strength of character, that let them make the difference.

Perseverance in trading is a matter of learning, implementation and dedication. If you persevere and never let go, you’ve already come halfway. Here, I’m not talking about a few days but about long months.

Perseverance: 7 Reasons Not to Give Up

1. Trading teaches you to know yourself. “Willingly or not,” you’ll have to get familiar with your strengths AND your weaknesses.
2. Trading well will make you more effective in everyday life. Good traders manage to handle their ego, their fear, their greed, and to manage risk across a multitude of areas.
3. Trading is a good way to measure your abilities. It’s a fairly classic competition. Its big peculiarity is that it’s played on a level field! It’s also a competition against yourself.
4. An excellent trading system can be a source of regular income.
5. You can grow your capital and thereby change your life significantly.
6. Very few professional activities offer such freedom: no schedule, no boss, interesting prospects, a workplace of your choosing, and so on…
7. We give up when we’re frustrated and sometimes tired. Those who persevere are motivated by failures, because they know these are perfect chances to learn!

So … Are you more the persevering type or more the impatient type?

If you’re impatient, I offer excellent trading courses to save you precious time, and if you’re persevering, that’s perfect, because you’re going to need it anyway!

In the meantime, never forget that trading is a competition in which you absolutely must be among the best of the best to make profits! Depending on the markets and the trading style, only between 1 and 10% of traders are profitable, so don’t take this aspect lightly. To become a pro trader and make a living from it, you have to be among the best — there’s no way around it!

Trading Is a Competition … Barring some utopian revolution, everyone has to understand that a majority of traders active in the markets lose money.

You can actually compare it to a Grand Prix and its podium: 4th place isn’t bad, they do pretty well, but it’s not necessarily a great result. And I’ve never seen a world champion become one without a significant number of Grand Prix wins and podiums. It’s easy to make a few good trades now and then, but doing it regularly demands a technique and an experience that stay well above average.

I can see you coming with SMC Trading … But I’ve already written an article about it 😉

To this day, social media gives the impression that trading can be easy. That’s obviously false.

Have You Heard of the “Availability Bias”?!

It’s a cognitive bias that leads all of us, one day or another, to confuse reality with the first ideas that come to mind on a topic. Sometimes it happens to be perfectly true, unfortunately; these are often “truths” that get drummed into us over and over and that we then spit right back out.

It’s a phenomenon you’ve surely already noticed on social media. I experience it myself regularly in the comments on my content, despite the significant prevention and education work I provide to my followers.

There’s always THAT troll … ANYWAY!

Let’s be realistic and be aware that trading is profitable for 5 or even 10% of traders at the ABSOLUTE most.

Why Do the Vast Majority of Traders Lose?

1. First of all, because it’s a hierarchy of skills
2. On top of that, no matter the moment or the timeframes you trade, liquidity is limited. This implies you absolutely have to be faster than the others to get in and out. Even if you had a good plan, sometimes the available liquidity can’t satisfy everyone.
3. You need better strategies than the others. People who are good eat; people who aren’t good get eaten. Just as in a competition, to earn your living better than others in this field, you absolutely have to be better than the majority!

A trader making $1,000 a day is taking that away from others. Others will have lost or missed those $1,000.

There are very few sectors of activity where you’re immediately up against the best, yet trading is one of them!

When you start a sport, you can’t measure yourself against the best — there’s no point; you’ll quickly be put off. In trading, if you don’t take precautions and set out with expectations that are too high, it’s the same!

Before turning pro, it takes time no matter the talent… And in fact, it’s by losing to those better than yourself that you climb the ranks — though you do have to keep a certain balance.

Time, Research, Practice

Becoming better than others at making money requires putting in more “intentional” work than others.

Most people stopped too soon; the reasons for that are varied!

In my opinion — at least with the method I offer as an example — it takes about 1 year to trade decently, but to be truly good it generally takes a considerable amount of time.

Take the crypto market: the traders who fail to make profits generally get lost across too many strategies or too many coins, instead of focusing on 1 or 2 coins and 1 or 2 strategies. From then on, it’s the casino if you’re a beginner!

Succeeding in Trading: A Few Simple Tips to Get Started

Successful traders trade 1 or 2 very specific strategies/setups/models. You don’t need to know everything; you just need to know a few models that work, you climb the ranks, and ONLY THEN do you broaden your skills.

For example, if I go by what our partners at Delta Exchange tell us, 5 to 10% of overall trading volume in the crypto sector is tied to Options trading. There are good reasons for that …

Personally, I started with a small advantage because, even though I got lost across multiple markets and strategies at the beginning, I remain someone who likes to proceed step by step; I don’t start a new job before finishing the previous one.

Many traders fail because they’re undercapitalized and quickly find themselves against the wall, because they have no consistent risk management. As a result, they can’t take losses at the right moment, have no strategy, or don’t follow the strategy, bet too much or too little (position size), trade when they’re not supposed to, and so on.

Follow good advice right from the start, because you probably won’t have the means to learn the hard way. And finally, focus on results rather than on the process… to name just a few.

Many Traders Fail Because of Their Mindset!

Psychology affects everything we do as traders. If we’re too impatient, too confident, anxious, angry, or stuck thinking about our past trades, it logically affects what we see and how we trade our positions — that’s normal.

That’s exactly where you have to make the difference, and let the pressure roll off your shoulders! To get over the hump, you sometimes have to find your catalyst, your “positive thought,” or simply trade within your means by starting with paper trading.

Paper trading isn’t mandatory; you can perfectly well trade with very little to start! We’ve all played poker games with a 5, 10 or 20 euro buy-in because we play well, with pleasure and without fear of losing. That doesn’t stop us from leaving super happy when we’ve multiplied our stake, and that’s normal, because we played well.

Trading isn’t only about practicing strategies; it’s a daily self-reflection. Take a good look at how our way of thinking affects our trading. Most people never do it, and so they never climb the ranks.

If your mindset doesn’t fit, all the strategies and all the trading books in the world won’t change your results!