Another side to managing the psychological aspects of trading takes the form of risk control. I have found that new traders, including myself when I first ventured into forex, trade too often and with too many lots. With too much money at stake, perhaps from greed, fear begins to creep into your trading.
Each individual trade should have almost no bearing on your long-term success. If you are sweating bullets or “need this to win,” you will certainly lose in the long run. Eventually, your luck will run dry along with your trading account.
Trade planning and keeping a trade journal will likely have a calming effect on your trading. If done properly, it means you will miss some trades because you didn’t plan for them or you’ll skip others if they just don’t seem certain enough to be worth facing the judge and jury of your journal.
This will naturally bring consistency to your trading. You are consistently avoiding the trades you are not too sure about and trading the ones you are. You are repeating, refining, and building your trade skills. Trade by trade, session by session, day by day, week by week, month by month, and year by year, you are becoming a conservative and repeatable trader.
The next step will be to expand your constancy beyond your trading and add it to each of your trades by consistently managing risk. As each of your individual trades becomes more consistent in terms of risk, your emotions will become less and less of an issue, ...