Trading mindset
Trading mindset or way of thinking in trading reflects the mental attitude of a trader to analyze and predict the movement of market prices, his emotions when trading, time for trading, personal strengths and weaknesses. Here are some questions that can help determine how we think of trading:
1. Why I want to become a trader? (motivation)
2. How my trading style? (Fundamentalist, chartist / technicalist, scalping, day trader, swing, long term traders)
3. Is my personal strengths and weaknesses in trading? (highlight the strength and prevent the onset of weakness)
4. Is my mental tendencies? (calm, relaxed, stress, fatigue or emotional)
5. How much time do you dedicate to trading, market analysis or research?
Examples of answers:
1: I am a trader to earn additional income. This goal is important to me because in the long run I want to rely on just my income from trading. I sure will be a successful trader because I was always confident, creative and likes to do research.
2, 4, 5: I am a technicalist and my trading style is scalping or day trading. I only have less than 2 hours each day to trade is a trade that I do a maximum of 4 trade depending on market conditions and technical setup or trading signals that I get. I will only enter the market when I'm not busy with other work, when I'm relaxed and calm my mind. I had a night to perform analysis and research.
3: My main strength is my always confident with a reliable trading method. I can quickly predict the direction of price movement in the lower time frames. My main weakness is that I tend to be emotional in implementing the strategy that I have made, especially in determining the time to exit the target level even though I have set before. To overcome these drawbacks I would always try to follow the exit strategy carefully, or I will make a custom script to exit, or perhaps an Expert Advisor (EA) to avoid intervention dpada trading position I have open.
The purpose of trading (trading goal)
Many reasons to become a trader, the most common is earning. However it is important for you to know the financial targets that will be achieved. Setting goals is an important part of a trading plan as a benchmark for the evaluation of what you have accomplished in a given period. Here are some questions that can help in making our trading objectives:
1 What is the purpose of my trading ?, and what I expected with the achievement of these goals?
2 What is the target of my income from trading (per week, per month, per year)
3 How do I know the plans that I've made has been run or not?
Examples of answers:
The purpose of my trading is obtaining substantially consistent profits every week, every month and every year of course. I expected gain at least 5% of my account equity per month with less than 20% drawdown. I am sure I can achieve that goal because of the strategy I have in-backtest apply within the last 4 years by producing consistent profits. The probability of profit for me for a while is sufficient. If my trading results are always consistent for several months, I consider I have achieved short-term goals, and I will do the evaluation in order to improve the next achievement.
