Psychology of Trading Pt. 2

Always trade based on a plan and never trade based on your emotion.
We will give you a plan (Technical Analyst), it will be your job to follow it. If you find yourself getting emotional, scale back the amount of money you are trading with until you build confidence or better only trade paper money (use a demo account) until you are profitable and confident.
Never risk more than 1%-3% of your account and always trade in the direction of the trend.
Even if you learn nothing else, learn this. Trading against the trend is the fastest way to lose your money.

Don’t short or use leverage if you aren’t consistently making profitable trades.

If you aren’t profitable in one direction, you likely won’t be the other direction. If you aren’t making profitable trades in general, then leverage (margin and options) will only cause you to lose money faster. The only way to lose your money faster than trading against the trend is trading against the trend with leverage.

Stay humble and keep it simple.

It is easy to want to think you are smarter than everyone and can beat the market using complex methods… but we have found simple to be best. We want to react to the same support and resistance levels as everyone else, not enter and exit at levels only we can see. Don’t be greedy, don’t chase trades and don’t OVER Trade!

Pre-evaluate and preplan, and then stick to the plan.

Find a plan that works and then stick to it. We have created a rule-based trading system. If you aren’t sticking to the rules, you aren’t trading the system. By not sticking to the plan you can’t properly manage risk or predict results.
Don’t trade based on emotions and get prideful trying to 100x long before you know you are a profitable trader. Do use a simple rule-based trading system and proper risk management. And always trade in the direction of the trend.