Trading tips from BBOD

[traderkhatz]

Let me share this trading tips from BBOD.
Trading Psychology: why you should learn to control your emotions?
Read more here: bbod.io/post/trading-psychology-why-you-should-learn-control-emotions

Blog by: Ashish S

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Trading Psychology: why you should learn to control your emotions

The mindset of a trader is arguably the trader’s most important asset. It is highly undervalued today in the time and age of indicators and signals. Every other wannabe trader gets introduced to trading with the possibility of making huge sums of money in a short period of time. Such scenarios are highly improbable. Even professionals who day trade make no more than 2%-4% on a good day.

Traders that get lured in the markets to make a quick buck most certainly lose money. They might get lucky once or twice and stick around. However, the real profits come in when you stay in the markets for a while, learn its ways and most importantly – control your emotions and brain while trading.

Not a lot of emphasis is given on the mindset of a trader. This is why 90% of traders lose money in the market. The 10% of traders that stay know the importance of having a stable mind while trading.

To trade in the right mindset, requires quite a bit of practice. Emotions like fear and greed should be disregarded.

Trading is like playing a video game and there are two important emotions that mess up your game. Fear and Greed.

It is not your fault that you experience these emotions while trading. Humans have evolved over millions of years successfully, because of these emotions.

However, when it comes to trading, these emotions are best left at the door.

How emotions control your trading

You come to trade on BBOD and see a wonderful setup on the XMR/TUSD contract. It checks all your indicators and you decide to go long 10XMR at 63TUSD, totalling 630TUSD

You have set your stop loss at 60TUSD which means you are willing to take a loss of 30TUSD.

Your target is 72TUSD which means you are willing to take a profit of 90TUSD if the price moves up.

This is a decent setup with a risk:reward of 1:3. We will discuss more about this in later posts.

There are three possible outcomes:

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Market goes up (GREED)

The contract is now trading at 75TUSD, 3TUSD more than your target. You are extremely happy that you have made a good amount of money in this trade. You get greedy and add 10XMR more to your position. The market makes a massive move against you and it goes back down near your stop loss.

Market goes down (FEAR)

The contract is now trading at 60.5TUSD and is only 0.5TUSD away from hitting your stop. You are fearful, even though you have defined a stop loss. You are hopeful that the price will go back up in a while. Your brain plays wonderful tricks on you and convinces that your analysis cannot possibly be wrong. You move your stop lower, add 10XMR to average your position and wait for the price to go up.

This is a classic mistake. You bite your nails in hopes that the price goes up. The market makes another move downwards and you move out of your position in a hurry, out of fear. You feel terrible to have broken your own rules.

There is a third outcome where the market trends sideways – You get frustrated on waiting days at end for your move. You eventually come out of the position at breakeven. Right after you exit your position, the market moves in your direction.

You can experience these scenarios and emotions daily in the markets. The professionals are extremely good at suppressing and controlling them.

Control your emotions

To become a successful trader, you need to master the way you think.

Had a stressful day at work? Don’t trade.

Fought with your loved ones? Don’t trade.

Feel extremely sad or happy? Don’t trade.

Find time everyday to be comfortable in your headspace. Try to enjoy silence and serenity. Take up a meditation practice. Acknowledge fear and greed when they hit you and watch them fade away. This is really important to trade in the markets.

There is a quote by a professional trader who once said, “If you sit across the table from me while I day-trade, you won’t be able to tell whether I am $2,000 ahead or $2,000 behind on that day.”

If you are in good mood and control your emotion you can start trading. Sign up now at bbod.io/platform/register?code=nnUbjl to access plethora of perpetual futures contracts on alt-coins with leverage.