Some useful Psychological Tips for beginner Daytraders part-1

Hello there,

I am an active day trader. I have noted down some observations based on my trading activities. I want to share them over this platform with the hope that some may find it useful who is just beginning his trading journey.

  1. Every Morning when you come to trade, No one knows what Nifty would do. Hence it is
    better to stick to your Trade Plan which will eventually work for you. Stop prediction &
    don’t make any biases about Market moves. Trade mechanically having a well backtested
    Trade plan.

  2. Everyday is totally new day for Trading. If you keep memories of past performance you
    will always hesitate to perform at present & always miss good opportunities. Get rid of
    ‘analysis paralysis’ & ‘I should’ve entered here’ syndrome.

  3. It’s real fact that you cannot trade all day. The more you stay in front of the terminal,
    more you tend to get invited to random trades as you lose concentration. So you need to
    choose among morning session (9.15 am to 11.15 am), Mid afternoon session (11.15 am
    to 1.15 am) & Post afternoon session (1.15 pm to 3.20 pm). where you are the most
    comfortable with trading.

  4. If you deal with more than one trade plan & with more than one sessions (time zones)
    then it will result being cought in overtrading which in turn results in bad health, lot of
    stress & capital destruction.

  5. Trading is not 9 to 5 kind of job where you need to seat & work all day long. In trading
    sometimes your trade is over within a minute while sometimes it can take hours to
    complete your trade. So no need to feel weird when your work is over much early.

  6. Trading is not easy if you don’t have proper trade plan. It may look easy to come at any
    time in front of terminal & take gut based (discretionary) trades & make huge money, it’s
    never like this. Better stick to your mechanical trade plan & make less but real money.

  7. Many of the times it happens that price touches your stoploss & then resumes its
    journey towards your target. You should get used to such situations. Never to forget
    stoploss is very important thing in trading. There is no shame taking small losses as per
    your trade plan.

  8. In Stock Market only few things are under your control :-
    i) Order execution as per Trade Plan,
    ii) Money Management,
    iii) Risk control (setting of stoploss).

  9. You see your set up, you take a trade, you think price may come down from your
    purchase price level, you set a stoploss as per your loss appetite.
    Now happens few things:
    i) Price goes to your target level without coming down.
    ii) Price retraces comes near to your stoploss level, but then reverses & goes to your
    target level.
    iii) Price retraces, comes near to your stoploss level, hits it then reverses & goes to your
    target level.
    iv) Price hits your stoploss level & keeps coming down.


Some Nice points there :+1: . What are thoughts about “Revenge Trading” ? Trying to get back quickly after a bad trade just to prove a point to yourself ?

Thanks you for your reply.
Well I have done some revenge trading in my early years. It normally ended up in overtrading. We won’t do revenge trading when we have a clear defined entry & exit as per our Trade plan. Traders who go for revenge trading, they lack having a proper trade plan, They are not ready to accept losses & come everyday with the aim of making profit only. No matter how small profit they earn, but all they want ‘a green window’ at the end.
But it’s a fact that you can’t control market moves. Once they are in losses, it becomes hard for them to accept that. Somehow they want to get rid of this unwanted situation because they were never ready for this situation. They just want to save the day. They would take trade again & again with a false hope that this time they would recover all losses. Which hardly works.
If a trader believes in his Trade plan & doesn’t mind taking calculated small losses as per his system, he will not go for revenge trading as he knows that his system will give him positive return over a period of time.

Fantastic , now everyone will become a profitable trader.