Too often traders, whether novice or experienced, ignore the mental side of trading. Falsely presuming that the only key to avoiding future mistakes is by enhancing their trading skills. Of course, improving skills such as chart reading and technical analysis is good, but until a trader addresses, the mental side of their trading mistakes those errors will most likely continue to appear.
Just like athletes and musicians, warming up for a trading day can be the difference between a successful day and a loss for a trader. Here are a few tips on preparing for a successful trading day!
Clear Your Mind
Focusing the mind on the task for the day is key to preparing for your trading day. Everything that has happened within the last few days means nothing at this moment. Whether lingering on thoughts from previous trading days or situations in your personal life, clear them away. Remember your intention for the day and whenever an opposing view pops into your head continue to think on your goals.
Power the Brain
This isn’t the first time you’re hearing about the importance of a balanced meal, but for a trader this is essential. Make sure that you have a light but filling breakfast to start off your day. You want to remain alert throughout the trading day so that means avoiding a meal high in fats and sugars as it can cause you to become sleepy and crash too soon. As you get hungry throughout the day keep snacks at hand so that you can keep your blood sugar balanced, to keep your brain focused. According to an article published by U.S. News, here are a few foods known to keep the mind fresh and alert are: blueberries, nuts, eggs, fish, Greek yogurt, dark chocolate and avocados.
Look at the facts
Keep an eye on the financial instruments that you are planning on trading, reviewing any recently released reports or news on it. Review your trading plans for the day and any notes made in your trading journal. Analyzing previous trades is an excellent way to learn more about your strength and weaknesses, and nothing better reflects that than history. Evaluating your mistakes and successes refines skills and can boost confidence for the next time you enter the market.
Recommit to your discipline
As you write in your trade journal patterns can sometimes present themselves. If you’re noticing that you are exiting a position too soon or too late, write it down. As you prepare for a new trading day look at your notes and recommit to following through with your trading plan. By doing this, you are focusing on making today’s trade successful and organizing your thoughts and emotions to do the same.
Making these thoughts a regular part of your trading day can significantly improve your results. Rather than thinking of the mental aspect as a separate part from your technical or market knowledge, think of it as an aid to your ability to use that information while trading. While we cannot and won’t ever eliminate all emotion from trading, preparation puts them into perspective; we gain control. This does not happen just by staying Zen, but by anticipating situations that are likely to take us out of calm focus and preparing our responses to those.
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