The magic pill for successful trading...
Trading Psychology tricks, Free Trader Education, Our interview with PBInvesting!
How can I improve my trading psychology?
If you've been in the trading space for a while, you've heard the saying...👂
"Trading is 20% technical and 80% psychological."
Some would even go as far to say...
"Trading is 10% technical and 90% psychological."
If you're rolling your eyes thinking...
"Psychology? 🙄 Yeah, right. Can't be that important."
Seasoned traders are rolling their eyes at...well... YOU.
(Boom. Roasted. 🥜 )
It's no secret that having a good mindset and sound psychology will make or break your trading. 🧠
There's a reason why it takes most of us YEARS to get the hang of things. 👀
Let's take a look at some tips to help us improve our psychology and get the results we deserve.
1. Know your style.
2. Establish a strategy around that style.
3. Neutralize emotions.
*Bonus* tip at the end.... keep reading! 📖
💡 Know your style
Are you a scalper? A day trader? Maybe a bit of both? 🤔
If you're not sure, be honest with yourself about these questions:
- Are you quick thinking and can read action fast?
- Can you make sound decisions in a rational way rather than reacting on impulse?
- Do you have the patience to hold through pullbacks and longer trends?
- Do you prefer to have several elements of confirmation?
The first two are generally characteristics of scalping and the last two are generally characteristics of longer time frame trading. 📈
Whichever kind of trader you are, you have to be realistic about the time frame that you set for yourself.
Here's a reference point to give you an idea:
Scalper: 1 min, 2 min, 3 min, 5 min, 15 min charts
Day trader: 5 min, 15 min, 30 min, hourly charts
*This can vary depending on the trader.
💡 Establish a strategy around that style.
So let's say you've realized you're a scalper.
You're trading AAPL options on AAPL trading at $150.
In general, with scalping, you might look to capture 25-50 cents on AAPL.
You're looking to catch a quick move, so your trade might look something like this:
Profit target: $150.30
You're risking 10 cents to make 30 cents. A 3R trade.
Of course, this must also correlate with your risk amount, so size accordingly.
If you're looking to day trade this stock, a stop loss 10 cents away would potentially be too close and not allow enough room for the underlying to play out a trend. 👀
See what we mean?
We can't get rid of emotions entirely. 🙅♀️
We're not robots, we're human beings. 🤖
BUT, we can be aware of our emotions and how they impact our decisions. ✅
That's they key 🔑 .
Imagine the process of buying a house with your partner. 🏠
Your relationship with your partner has been great and you've been planning to buy this house together for months.
On the way to sign the agreement, you both get into a minor argument. 😬
You're in a bad mood, and now negative thoughts of buying this house together are starting to creep in.
The emotions might impact your decision, even though you know you've planned to buy this house and your relationship is stable.
It's your job to...
- Remember the original plan of action (your trading game plan).
- Know that there may be bumps along the road that affect your emotions (a red trade).
- Be aware if you are feeling emotional and calm down (stepping away from your trading desk for a moment)
It's definitely easier said than done, which is why we're going to move on to our Bonus tip! ✅
Engage in daily meditation. 🧘♀️
Often referred to as the magic pill for trading.
We can't guarantee everyone has the same results, but if there was a magic pill for trading, meditation would be it.
Before you scroll away... look at the benefits of meditation.
Improved decision making
Thinking before reacting
Improved mental clarity
Easier to manage emotions
This list goes on and on. There's no wonder why so many traders engage in consistent meditation.
Even our very own founder, Umar, swears by it.
If you're interested in getting started with meditation...
Find a comfortable position and sit for 5-10 minutes, close your eyes, and try to focus on your breath.
Clear the thoughts from your mind and allow it to rest for those 5-10 minutes.
It's certainly tough at first, but after just 9 days of consistent meditation, you'll start to see massive results in your mood and behavior.
So what do you say? You joining the meditation tribe?
What's on this week
Trader Education with Zella (You don't have to be a member 😉)
In case you didn't know...
There's a Trader Education within our blog!
Tons of topics here for you to explore.
Everything from creating a journaling template to a winning trade plan.
We've got you covered!
If you like what you see and you're looking for something more, we've got Zella University for members.
Zella University is an extensive video library created to help you tackle the deeper issues.
Give our Trader Education blog a look if you're down to make some simple tweaks to your trading!
I'm 15 years old and took a 1k account to 15k. Here's how I got started.
If you're in the Twitter trading circles, there's no doubt that you've seen the progress behind PBInvesting.
He started learning how to trade around age 12 during the pandemic and since has taken a $1k account to over $15,000. 😎
Let's check in with him and hear his story!👀
TZ: How did you get started?
I always had that mindset like “how can I find ways to make money.
Once quarantine started, that mindset really kicked into gear because I had all this free time.
[Actually,] I first found dropshipping. Did it for about a month, didn’t like it, and stopped.
Then I got introduced more into trading with social media and came across someone making a lot of money trading stocks.
So I started looking up how to make money trading stocks on YouTube, including some of Umar’s videos.
TZ: How did trading go in the beginning?
PB: So I started with OTC trades, made a few thousand in the beginning, but of course ended up blowing some accounts.
OTC markets and penny stocks are hot in phases but options can be traded all year round.
Most people lose a lot on options when they start.
You can’t just buy them, you have to have reasoning and they expire.
TZ: How long did it take for you to find consistency and what made things click?
PB: About a year and half to find out what worked what didn’t. I cut out all the noise and just focused on myself.
Instead of just blindly following traders on Twitter, I actually found conviction in my own trades.
Risk management. Understanding reasoning behind entering a trade.
Having a plan and entering with conviction- your own conviction, not someone else’s.
TZ: What kept you going? Ever feel like quitting?
PB: My whole life I've known that if I put my mind to something, I never really give up. I just keep working.
"I’m young, so I can take these risks."
If I can really develop these skills now, stick to the process, and never stop grinding, I’ll see progress."
There were nights I stayed up journaling. Trying to figure out what I did best at, look at my stats, etc.
Then TradeZella came out. It does that all for you, so it helps a lot.
Great chat, PB! We have no doubt that 2023 is your year!
If you're thinking to yourself...
"Hey, maybe I could do that..." or
"I wonder how much I could scale my trading if I was analyzing the right metrics..."
Look no further than TradeZella. Use the right tools and get yourself where you deserve to be.
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