What makes a person successful at trading? Is it using the right trading indicator? Do you need a mentor to show you how to be a profitable trader? While both of these and many other things can influence whether or not a person becomes a profitable trader, possibly the most important factor that affects if you win or lose at trading is yourself. You may not have thought of it before but the hardest thing about trading is the psychology of it. Sadly, most traders completely ignore psychology and never give it the attention it deserves. Psychology plays such an important role in swing trading that it is the key to trading success.
Psychology here is all about how you manage yourself when trading. Many new traders focus too much on the technicals of trading. They worry about indicators, time frames, charts and many other trading related issues beyond their emotions and trading. Trading induces a wide variety of emotions and reactions in people, more so when a trade they have just placed begins to make a large profit or loss. The effect of emotions can be seen in how people react when they are demo trading compared to trading live. Many people are extremely good at trading when using demo accounts. However, as soon as they make the move to trading with real money, they suddenly begin to suffer loss after loss. The only thing that influences how they trade is their emotions. The idea of trading with live money all of a sudden makes a huge impact on their ability to trade successfully. Many people lose control when it comes to trading and the thought of how much money they might possibly earn clouds their judgement.
Why would anyone neglect the side of psychology if it really is the key to being successful? There are many reasons why most people ignore the psychology side of trading. One is simply because people are scared that what they uncover about themselves will cause them more pain than good. Many people would prefer to ignore traits or bad habits that affect their trading, simply because they do not want to face the emotional pain that is associated with finding out there is something wrong with you on an emotional level. Put simply, they would rather lose money as the pain associated with losing money isn t as strong as the pain associated with finding out something negative about yourself. This is the same kind of fear that ruins a good trade.
The psychology of trading is something that all traders should address. The impact of your emotions on trading is just too big to ignore. If you succeed at swing trading or not depends on you as a trader. Are you mentally prepared to win or lose? For many the emotional pain associated with fixing yourself is worse than the pain associated with losing money. This kind of thinking is self destructive for anyone who wants to trade as a career. Changing your thinking is crucial to being successful in trading.
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