*This blog post is my personal opinion only and may contain affiliate/referral links.
Trading as an amateur and trading as a professional is the same in many manner. The success of both depends on research, analysis and strategy on the front end, but equally important is the patience and management of emotion before, during and after the trade.
Establishing a trading mindset is a plausible plan on both the peaks and valleys of a trader. It prepares the trader not just for the winning trades but also for the dreaded burnout that can beset a trader at any stage of his or her career.
Celebrate Small Wins
Traders need to validate that their skills and intuition are working, so even for small wins, they need to acknowledge and more importantly to celebrate these small wins. A win is money going in your pocket, and a loss is the opposite. A win is a dose of encouragement and a loss is a step back.
Rather than dwelling on the losses, a trader should look at this as lessons for improvement. Every novice trader knows that losses are inevitable and that perseverance is what separates a successful trader to average one. Use that small wins to fuel the motivation to learn more and go for the big wins.
Set a Budget
Beginner traders should make it a point to set a budget limit for trading. Whether it is for daily, weekly or monthly trading money, it is critical to have a cap at your purse. It goes without saying that tremendous losses on one go can be debilitating to a trader’s drive.
Knowing when to stop buying or selling is a quality that will be go a long way for a trader. It is an early lesson in money management. A good practice is to always set a stop loss after you buy a position.
Recharge and Take a Break
Positioning yourself on a trade is a process. Aside from the obvious financial aspect, It is also a mental and emotional play that needs to be balanced. There will be many days when your trades will not be in your favor. and in actuality can lead to a trading burnout. If you need to tone down your strategy and focus on conservative plays like Covered Calls or Cash Secured Puts, then do so by all means. This temporary switching of gear will unburden some of your risky plays.
Take the initiative to back down and compose yourself when you feel you are at the brink of being drained. Recharge and regroup, maybe a new strategy is needed or maybe a new environment will give a fresh perspective on your trading, but at any case do this for your financial, mental and emotional health.
Thank you for reading.