EMOTIONAL STATES OF A TRADER

10 cze 2023

Hello traders, today we will talk about EMOTIONAL STATES OF A TRADER

#1 Optimism – Everything starts with a positive outlook or a hunch that will lead traders into buying a stock.

#2 Excitement – Things start to move the way we want them to you feel giddy because of it. This is where we start hoping and anticipating that we are possibly making a success story in the stock trading world.

#3 Thrill – The market is continually going in the direction favorable to you. At this point, you are starting to feel that you are too smart. This is the stage where we are fully confident with the trading system that we have.

#4 Euphoria – This is the point where both the maximum financial risk and maximum financial gain are marked. As the investments you made start to turn to easy and quick profits, we simply ignore the risk’s basic concept. At this stage, we start trading at every opportunity we see with the aim of making bucks.

#5 Anxiety – The market starts to turn around. The market is starting to get back your hard-earned gains. However, this is new to us, we still believe with the trend we have seen before and still trade.

#6 Denial – We still think that the market simply does not turn as quickly as we hoped. There must be something wrong is what we keep on believing.

#7 Fear – Reality finally sets in and you now realize that you are not that smart after all. From being confident, you are now confused. We know that we should start getting out with a small profit but we just cannot bring ourselves to move on.

#8 Desperation – At this point, all of your gains are lost. Without knowing what to do, we attempt to do things that will leverage our position again.

#9 Panic – This is the most emotional stage as this is where we are hopeless and clueless. We feel like we lost control and now are left at the mercy of the market.

#10 Capitulation – This is where we reach our braking point and start selling our position for whatever price so as we can get out and lose no more.

#11 Despondency – After our exit, we now view the market as something not for us and we develop a phobia of buying stocks.

#12 Depression – We drink, pray or cry. We think we are so dumb and we start to analyzing where we went wrong. This is where true traders are born.

#13 Hope – We realize that the market has a cycle, which then renews our hope and we believe that we can still do it.

#14 Relief – The market turns positive once again. We are seeing the coming back of our prior investment and we now have our faith in it back.

The cycle will then start all over again and it is up to you how to play it this time.

This chart is just for information
Never stop learning
I would also love to know your charts and views in the comment section.

Thank you

11 cze 2023

Uwaga

Candlestick patterns need to be one of your trading arsenal's most effective weapons. We can determine the direction of the market using several candlestick patterns. All timeframes exhibit these patterns, but the daily candlestick patterns seem to be the most reliable.

Once you recognize these patterns, you may be ready for your next move and use other tools to join the market, including the previously discussed MA approach and flag patterns (see attached charts). This chart is just for information

11 cze 2023

Uwaga

Good day, traders.

I'd like to use this opportunity to advise both new and experienced traders alike that holding (hodling) your position is not recommended beyond a certain point. According to percentage calculations, the return required to recover to break-even increases at a considerably faster pace when losses grow in size (due to compound interest). It goes downward after a loss of 10% because a gain of 11% is required to make up for it.When the loss is 20%, it takes a 25% gain to make up the difference and return to break-even. To recoup from a 50% loss, a 100% gain is needed, and to reach the initial investment value after an 80% loss, a 400% gain is needed.

Investors who experience a bear market must understand that it will take some time to recover, but compounding returns will aid in the process. Think about a bear market where the value drops by 30% and the stock portfolio is only worth 70% of what it was. The portfolio increases by 10% to reach 77%. The subsequent 10% increases to 84.7%. The portfolio reached its pre-drop value of 102.5 percent after two further years of 10 percent gains. Consequently, a 30 percent decline requires a 42 percent recovery, but a four-year compounding rate of 10 percent returns the account to profitability.I will be doing a second part to this post on the idea of "DOLLAR COST AVERAGING" (DCA).

The math behind stock market losses clearly demonstrates the need for investors to take precautions against significant losses, as depicted in the graphic above. Stop-loss orders to sell stocks or cryptocurrencies that are mental or limit-based exist for a reason. If the market is headed towards a bear market, it will start to pay off once a particular loss threshold is reached. Investors occasionally struggle to sell stocks they enjoy at a loss, but if they can repurchase the stock or cryptocurrency at a lesser cost, they will like it.

12 cze 2023

Uwaga

14 cze 2023

Uwaga

15 cze 2023

Uwaga

15 cze 2023

Uwaga

Hello traders, today we will talk about Myths and Reality of Trading.

As you may already be aware, there are a lot of misconceptions that new traders encounter before they begin their trading careers. The following interpretations of those statements are presented on the layout:

1) The majority of individuals believe that trading is simple and that they can immediately stop working or doing anything else in order to make a living off of trading. In fact, he or she MUST have a backtested strategy and have sufficient industry knowledge in order to be successful, reliable, and a full-time trader in general. Keep in mind that achievement takes time, but it is totally worthwhile!

2) "Trading is like a casino" is a statement we frequently hear. This phrase is frequently used by only two types of people: those who have never been able to succeed in this field and those who have no plan or notion of what they are doing. Never open a position based on the outcome of a coin toss or what other people are saying. A trader may be inspired to open a position on a certain security by the ideas and analysis of others.

3) No matter what line of work one is in, including trading, one can never become wealthy in a single day. A qualified lawyer must practise for at least six years before becoming a licenced surgeon, which takes between 10 and 14. What gives you the impression that you can master trading in a matter of weeks or months?

4) Use a Stop Loss at all times to prevent substantial losses, regardless of the circumstance. Regardless of whether liquidity hunt occurs or not, it is always necessary to keep secure.

5) Risk management always takes precedence over victory percentage. Imagine your next 10 trades have a 1:3 Risk-to-Reward ratio with a 50% win rate. This implies that you will win 5 and lose 5. Let's imagine we choose to stake 1% of our capital on each deal. If we quickly calculate the numbers, we can see that with a 50% win rate and a 1:3 RR, our next 10 transactions will net us a tasty 10% return. Of course, this is not always the case because there are various things to take into account, including spreads, charges, pip value, etc. This is a great illustration to get the point across, though.

6) A significant portion of traders prefer trading the "Smart Money" concept, which is ostensibly the closest thing we have to institutional trading, over the "Retail Way" because they find it to be more profitable. The main line is to pick a method that works best for you and stick with it while adjusting it as you go. Changing tactics every week or month won't help one become consistent. You must commit to and stay to a single trading strategy.

7) Many beginning traders tend to increase their risk in attempts to make more profits. This approach is so risky and totally wrong. If one is willing to make more money trading, it is important that he or she increases the input, and not the risk.

This chart is just for information
Never stop learning
I would also love to know your charts and views in the comment section.
Thank you

16 cze 2023

Uwaga