Home Trading Strategies Trading Psychology: Practical Strategies to Master Your Mind and Money

Trading Psychology: Practical Strategies to Master Your Mind and Money

Trading Psychology: Practical Strategies to Master Your Mind and Money

hey hey what’s up my friend so in today’s episode right I want to talk about trading psychology right how to master your mind and money so here’s the thing right when it comes to trading psychology er one of the biggest issues traders face is that they have this need to make money syndrome especially those who attempts to trade full-time so what is this need to make money syndrome is this is where you know you have a trading strategy a trading plan but you have difficulty following the plan because you need to put foot on a table right like for example let’s say you are trading for the matter of February right now you are in the drawdown and you realize that man if I don’t make money this man how am I gonna be no put foot on the table how am I gonna give allowance to my kids how am I gonna pay my mortgage how am I gonna pay my bills so what you do well if you’re in a loss alright you might ship your stop-loss further so you don’t have to you know take the loss you might double down your trade right tree even larger hoping to make bet your loss right over the next you know what are two treats and you can see that this type of action will lead to disaster well you may get away with it once or twice but it’s only a matter of time before you lose a huge chunk of capital and that’s it that’s the end of your trading career so another question is how do you overcome this how do you master your mind and money so let me share with you four tips right number one what you have to do is to have multiple source of income there are many ways to do it is you can for example maybe have a part-time job right tutoring people kids or whatsoever so you get another and it should all source of income right on top of your trading income so even if you don’t make money from treaty you can NEC you know still put food on the table another way you can do is a affiliate right what affiliate is is basically you get paid for recommending services or products to others for example I use trading view right whenever I let’s say reefer trading view to a friend and I sign up for a pro account I get a small commission fee or maybe introducing broker right for example if you are happy with a broker that you are using and they have a introducing broker so-called a program what you can do is that you can refer a friend to the broker and again you get a cut of the fear so there many ways to go about it and the first thing that you wanna do is to again don’t make trading your only source of income have multiple income streams okay secondly you want to have a pool of money set aside right to cover your living expenses ideally 12 months or more this way you know maybe if I draw down for two or three months it’s not gonna affect your livelihood because you really have money set aside right to cover your living expenses where does it pay for the mortgage the bills allowance for your kids etc so that greatly helps as well number three know your deepest drawdown so this would be be a very easy to find out if you are a systematic trader right the report will show you what is your deepest drawdown and if you know what is your deepest draw down let’s say based on historical back-testing or maybe your own treaty you realize that your deepest drawdown has been 30 percent so whatever draw doubt that you’re in right now maybe it’s about 20 percent or 22 percent you know that historically some point in time right you actually ain’t held that a worse drawdown and still survived from me so debt and the back of a mine right shoe still give you the confidence to keep Freddie because this is not the worst that you have experienced before okay so number three is doing your deepest drawdown and finally number four is to increase right your network relative to your account so what I mean by this is that let’s say your network is a billion dollars right your SSL fifty million dollars right you don’t want to be trading a trading account right almost a million dollars because your entire network is on the line and if you do that your trading psychology is gonna be very very difficult to handle because 1% of that is basically one percent one percent of your net worth on every single tree and it’s very difficult to swallow so what you have to do is to increase your network relative to your account size now let’s see your ideal account size that you ought to be trading is $200,000 then great right don’t have a net worth of 12,000 dollars increase it to a million dollars so at least your trading account is only 1/5 of your net worth if you wanna trade it to be trading a billion dollars account then ideally have a net worth of like maybe you know 4 or 5 million dollars so your account run is not a huge portion of your net worth and that again right helps you execute your trait right more consistently right – hey your net worth right to be a much larger percentage compared to your trading account sighs okay so I think if you have read the trading quotes by Edson Kota he recommended Oh having a not more than 10% of your trading account right as part of your network so to me 10% is a little bit low I’m still young I don’t have much obligation so I’m willing to virtually push the figure up to 40 or 50 percent for me personally so you have to find out what percentage you know suits you given your own circumstance but the general guideline is that the greater your net worth relative to your account right the the easier it is right for you to execute your trading right consistently all right so with that said I have come to us to the end of today’s episode if you have enjoyed it right and I will talk to you soon you


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