Ability to identity and manage emotions and behaviors that may arise while trading is basic constituent of Traders Psychology. While the stock market is a forward-looking indicator for expectations around corporate earnings performance, it is often also swayed by factors which influence trading psychology on an individual and a collective level. Psychology mixed with right rules and discipline can do wonders.
In our learning series of Market rules and discipline today we will discuss 4 Important rules to save our capital and maximize our gains. These rules of psychology will help you grow stronger
- Never lose more than 1% of your total capital on any one trade.
- Never lose more than 3% of your total trading capital on your worst day. Maximum 2 or 3 Stop Loss to be allowed to hit on a particular volatile market.
- First find the Right Stop Loss level that will show you that you are wrong about a trade, then set your positions size based on that price level.
- Losers average losers, Get in the habit of never adding to losing trade. Learn from the experience and move on to the next trade.
KEEP YOUR EYES ON THE STARS AND YOUR FEET ON THE GROUND