Chapter 1: Mental Control

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A new trader must have competence before they have confidence.

New traders with big egos always put confidence in their trading ability before developing competence in trading.

Leave you ego at the door

Stubbornness will get you nowhere.

Stubbornness is simply the inability to accept mistakes, or to learn from them. Building capital is a result of being in losing trades for the shortest amount of time, while staying in winning trades for as long as possible

Don´t ingore risks.

Don´t ingore risk management in favor of confidence in an unknow out-come. Simply realizing that any trade can be a losing trade, and using stop losses to limit the damage, will put a new trader ahead of many competitors.

Everyone needs a plan

There is no crystal ball, and trying to predict the future is a losing proposition. To be successful, new traders must realize that trading is about probabilities, trends and risk management, not prognostication.

Trading is about being profitable, not being right.

Egos make terrible traders. Successfull traders follow a plan based on logic, reason, probabilities, historical prices, and risk management.

Greed

Greed causes traders to trade too big and risk too much. There are no shortcuts or secret trategies that will replace homework and the school of hard knocks.

Focus on overcoming greed and the allure of easy money.

Don´t ignore the risks

Determine how much they can lose if the trade goes against you, and then be able to see the potential of subsequent trades.

Watch your position size

Profitability comes from consistently trading with an edge over time, not big trades that can just as easily turn into big losses

Have realistic goals

Green can cause a trader to stay in a trade too long with unrealistic expectactions

Trade with a plan

Watch your odds.

Successful traders act when the odds are in their favor

Embrace experience.

Greedy traders are looking for the easy path to money and are not interested in hard work or gaining experience. Be prepared to put in long hours and treat trading just like any other business

Don´t be afraid to lose on a trade

Traders fear being wrong so much they will hold a small loss until it becomes a liability

Don´t be afraid to lose trading capital.

New traders hate to lose money; they don´t understand that 40-60% of their trades will be losses. If you can´t accept losses, you can´t trade.

Don´t fear losing potential profits

The fear of missing rofits causes traders to chase a market trend far beyond the correct entry point and skews their risk/reward ratio. Fear comes from a lack of faith in oneself, or in the chosen trading system