The right mental and emotional psychology for WSDT
Best day trading practices Oct 23, 2019
“Any feeling I have about the market is not reciprocated… it is the ultimate cold shoulder we are talking about here.”
Warren Buffett
It goes without saying that competitions drain mental energy, build-up overwhelming pressure and throws you into an emotional roller coaster.
No matter how successful or experienced a day trader is, there is always one important factor that seems to be an inevitable watch zone – trading psychology.
Day traders all around the world would agree to the fact that their mental and emotional state plays a vital role as it goes a long way to affect the trading outcome.
Day trading psychology is like a piece of an iceberg that has sunk many “titanic” traders. Simply because most day traders ignore its importance in achieving good trading results.
With competition like WSDT, many day traders across the globe come together to compete with some of the finest strategies and techniques. This thought alone can send you into an emotional state of anxiety. So, here are some ways that can prepare you and put you in a balanced emotional and mental state for the WSDT.
Revenge Trading
Revenge trading has been a major negative behavioral trading mentality of traders since day trading began.
Some of the best or most experienced of traders fall into this trap…sometimes we all get carried away, don’t we? And that is where more harm can be caused.
Revenge trading as the name goes is when a day trader just enters a trade irrationally to recover from his loses. Our instinct as humans and for that matter as traders, sensationalize day traders to make quick recovery whenever they lose.
This emotional quickening is what leads most traders into quicksand which leads them into further loses.
How to Avoid Revenge Trading
Most experienced day traders will tell you that, keeping calm is one major discipline every trader must be able to master. If you lose on a trading position, that is a very good time to go back to the drawing board to restrategize, adopt and modify for a better comeback.
Most often, this emotional and mental discipline works, and it gives a better come back to recovery.
Every athlete, has in one way or the other experienced some form of muscle pull before, do they continue running when they have a muscle pull? Who does that?
They come back to the bench get some treatment, analyze what went wrong and return with a better run.
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Trade Gluttony
Gary K, #10 in Overall Ranking
Every day trader wants to make good profits in trading, one of the greatest temptations that come with this is overtrading and force trades. In a sense, being an Oliver Twist trader and that’s what we term as trade gluttony.
There is nothing wrong with placing a large trade size or taking calculated risks, but forcing a trade or overtrading based on the whims of overexcitement of a major win is something you must save yourself from.
Overtrading and force trades are the main reasons why most competitors in WSDT lost their positions (as seen in a real case scenario of Gary K in WSDT I).
As you prepare for WSDT II, it is would be great to know your limits and where you would draw your lines.
Taking Wild Guesses
Well, many people believe in luck, but a competition like WSDT isn’t for the wishy-washy kind of day traders. As much as luck might have a role to play, you can’t just close your eyes and make wild guesses to make good earnings in day trading.
The market moves with trends and other salient factors, taking a gamble doesn’t work.
It takes some form of effort and good analysis to make some good earnings. This is the reason why you should try to lay your hands on some good educational materials and tools to help you make solid and effective day trading decisions.
We also recommend you to go to our website and choose a mentor. The will mentors train, equip and guide you through the WSDT competition. They provide tools and trading signals to make good trades.
Discipline
Discipline is the fulcrum of every trading style or strategy you would ever use in day trading. In day trading you need to know when and where to draw your limits. This restraint is going to save you from a lot of misfortune.
All most all the WSDT winners mentioned discipline as one of the single most important element that seals a good strategy for WSDT.
Here are some of the main areas to apply discipline in WSDT:
- The preciseness of your stop-loss
- Strait-laced money management
- A proper check on the market
- Read patterns of the chart
- Avoid Impulsive trading
- Kill the lust of quick gains
- Focus on the trading process rather than the results
- Always analyze the risks
