Trading psychology

One of the big challenges traders face is how to control emotions when trading. Once you are on a trade you're at the mercy of the market. You have no control of what's going to happen next.

Papertrade gives you an opportunity to apply your strategies and see if they work. If not, you can tweak and refine your strategies until you find the right one.

Because you have no money in the line, you will not experience any emotion. Once you found the strategy that works, go live and start a small position, and risk an amount you can afford to lose if the market goes against you.

Remember, the market gives but also takes. Most of the time, it takes more than gives. So, be careful and try to minimize losses by limiting your risk using stop loss. Initially, you can target a 1:1 risk reward ratio. As you progress and becomes more experienced, increase your Reward to 2.

Another tip, when trading think in terms of probability. If you remember your stats class, you may know about the Bell curve, where most of the outcomes are in the 2 sigma range (95.4%). The market is highly random.

In the next post, I will add more information. In the meantime, stay focused and good luck.