There is an oft quoted statistic that 80 percent of traders fail. They lose money â€“ they either retire or go broke. It is not that they make a lot of mistakes. It's all in the mind. Successful traders always acknowledge the importance of psychology in their trading. Traders must be disciplined and remain emotionally detached from the markets.
We can split Psychology into 2 broad sections: General Market Psychology (Sentiment, etc) and Individual Trader Psychology (Discipline, etc)
Trading requires management of the emotional states. Emotional imbalance impairs the ability to make congruent decisions. The most optimal state is one of complete emotional detachment, to remain calm and to act in accordance with your strategy. That includes negative as much as positive emotions - the key word is to stay "cool".
Your psychological mind set may play a larger role in your trading career than your chosen technique or any other details associated with your day-to-day practice. Indeed, discipline is just one attribute of trading psychology, but it just so happens to be the most important psychological factor that affects a trader's success.
Related Trade2Win resources