Mindset for Successful Trading
Mindset is the sum total of a trader's beliefs, values, identities, expectations, attitudes, habits, decisions, opinions, and thought patterns about himself, others, and how life works. It is the filter by which the trader interprets what the trader sees and experiences. The trader's mindset shapes the trader's life and attracts to the trader the results that are a definite reflection of that mindset. What traders believe will happen, and actually happened.
The wrong way of thinking in trading can have a negative effect that has the potential to destroy a trader's account. Take for example, a trader sees a trading signal that according to the trader is very valid and cannot be wrong, then the trader doubles the lot size or trading volume, but it still turns out to be wrong. It is quite possible for traders to get emotional and re-enter the market out of vengeance with larger volumes, hoping to at least recoup losses. This way of trading sooner or later will destroy the trader's account. It will be difficult for a trader to avoid the influence of such negative emotions unless it changes the way traders think about trading.
Changing the Way You Think About Trading
One of the things that can potentially cause problems is that traders are too focused on each trade that has been made. In reality, the trader's emotions should not be tied to hope in every trading position that the trader has opened because the spread of market price movements is distributed randomly which means the trader will never know for sure whether the trade that the trader has made will be profitable, even if the trading signal is very valid. This fact is often not realized so that traders will tend to be emotional in responding to market price movements.
Say a trader uses a trading system with a 60% profit percentage, the trader will still never know which trader will make a profit and which one will end up losing. 60% profit percentage means that after a few trades the trader can expect 60% profit from all the trades the trader has made, it does not mean that the profit opportunity from each trade that the trader makes is 60%. Profit percentage is determined for the long term after a certain number of trades, not for every trade a trader makes.
In order to avoid the trauma of negative emotions that arise when trading results are not as expected, traders should think about probability (probability), not certainty. A pin bar that looked valid and correct on a previous trade may not necessarily be true on the current trade even if the formation is exactly the same. The results of each trade are random, therefore the trade does not have to be affected and emotional if it turns out to be a loss. The resulting valid signal is not the one that is definitely correct, but the one that is most likely. Besides that, between one trade and the next trade is not interconnected, each has a possibility that could be different.
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