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Do you close your 4% profitable trade at 1% profit?

Do you hold losers stock too long and sell winner stocks too soon?

Do you sell your winner because of fear and doubt?

95% of the traders lose their cash. Not only because they don't have the right method. But also because of Limiting belief, Fear, and Greed in trading.

5% of Trained traders don't face such problems. They use stops, control their emotions. And get profits.

What is Limiting Belief?

The voice in your head that judges you, doubts you, lowers you, and tells you that you are not good enough.

Limiting beliefs stop you in your tracks even when you're doing something which you do every day.

Often you stop yourself from taking a trade after the research. 

Because your inner voice convinces you, the trade will not go in your favor. Later you see the same stock moving as per your study. It happens, and the reason is your limiting belief.

What is FEAR in Trading?

Fear exists in every one of us. Fear is like a fight or flight feeling. One fears when you feel the threat.

During trading, you get nervous when a trade goes against you. And feels a threat to your money, and fear looms in your mind.

Let's say you bought Axis Bank stock at the price of 500. 

After your buy, it starts going down. And in a few days, reaches the 425 level. You become worried, and fear appears in your mind.

You booked the loss at 425 levels, the 75 points loss.

What is GREED in Trading?

A strong desire to win or get something.

Greed affects trading decisions on winning trades from negative aspects.

Let's say you bought Axis Bank stock at the price of 500. 

And this time, the stock starts moving up and reaches the 525, 540, 560 levels.

But you didn't book the profit.

And after a few days, stock move below 560, 550, 530, 520, and reserve the gain at 520 levels—the 20 points profit.

Most traders encounter such problems. The reason is simple fear and greed.

Now, the question is How to overcome fear and greed in trading to bypass such errors.

Through the right approach, every trader can reach such a stage. There is always a method behind what looks like magic. 

So you can follow the below steps to solve the problem of fear and greed in trading.

Develop Positive Emotions

The negative emotions drive us in a narrow range of thinking of what we are capable of doing.

If you let negative emotions control yourself. Then you will always work in survival mode. And limit the range of opportunities.

While Positive emotions increase the sight of opportunities, open your mind. And build new skills and resources to provide value to your life. 

Negative emotions kick in mind when one uses words like "I don't trade well" or 'I'm angry" or doubts our study. 

To build positive emotions, you should use words. 

"I'll follow my trading plan, "I'll believe in my set-up," I want to be a successful trader."

Always Trade as Per Your Trading Plan

Your trading plan is a blueprint of what, why, how, and when you'll do.

The trading plan consists of your Entry, Exit, and Stop loss in trading rules. But there is more which you need to learn and practice.

First, Don't jump into the trade without proper confirmation. The mistake most traders make. 

Assumptions or guess-work never helps. So watch Price action or wait for breakouts to time your entries.

Second, Fix your winning and losing limit.

We all want to earn more and more money. But you should know where to stop. So you don't become the victim of over-trading.

Fix how much you can afford to lose in a single week. And then divide the amount by 5 (no. trading days in a week) to know your per day loss limit.

Let's say your per week loss limit is 10,000 INR. So, 10,000/5 Trading days = 2000 Rs is your per day loss limit.

Now in the week, on any day, as your per week loss limit gets over, you will stop trading. The same rule applies to the per day limit.

In the same way, you have to decide the profit limit per week & day. And as you earn such a profit, you will stop trading for the rest of the day or week.

Last, Fix Your Position-Sizing. 

Most traders treat their accounts like loading trucks. 

Stop this now. If you want to become a profitable trader. Don't put the burden on your mind and account.

Use fix percentage-based stop loss method to manage your position size. It's the best technique.

Make a habit of Writing the Trading Journal.

The trading journal is like a personal diary.

Where you list and review trades for better output and future reference.

The journal is the best method for tracking and studying the progress. When you document each trade, you understand your strengths and weaknesses.

Your trading journal helps you as an advisor. When next time you face the similar situation.

In your trading journal, you will list the following entries. 

The entry and exit date. Length of the trades, Results of the trade. Your Profits or loss from the trade, Market conditions on the day of trade, Logic for Entry, or exit trade with risks. 

You will soon feel a difference in your decision-making skills by creating the habit of writing a journal.

Conclusion

Now you've learned how to win over your limiting beliefs, fear and greed in trading. 

You can start to bring your positive mindset to turn on your journey to become a profitable trader. 

Don't forget. There is always a method behind what looks like magic. 

So now it's your turn to show the magic. And push your trading to new heights.

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