Trading psychology is the most underrated driver of trader performance and profitability. Trading is considered among the most challenging professions because it demands strong control over your emotions.
Sometimes, even with the best tools and indicators at your disposal, you can’t be profitable in this profession because you haven’t developed the right trader mindset. You can be the most competent discretionary trader in the world or a systematic trader who has created multiple profitable strategies. Still, you are setting yourself up for failure if you can’t control your emotions.
At Enlightened Stock Trading, our goal is not only to transform you into a profitable systematic trader. We also want to help you develop the trader’s mindset.
Do you want to know the difference between mediocre and super-successful traders?
No, it is not the indicators they use, how fast they execute or even the systems they use. You can give the same trading system to two different traders, but their performance can diverge wildly by the time you end your experiment. The trader who focuses on his trading by trading in the zone and developing the right trader’s mindset will always outshine a trader who didn’t work on his psychology.
Our videos on trading psychology are here to help you develop the right trader’s mindset. We at Enlightened stock trading promote systematic trading, an approach that eliminates more than half of the mistakes that discretionary traders make while trading. However, systematic trading alone won’t help you in getting rid of all the emotional mistakes you make while trading.
You can have access to the best trading system, but you can still get tempted to change that system’s pre-decided rules and conditions when markets are not working in your favour. Many successful systematic traders have tried to play with the rules of their systematic strategy during prolonged periods of drawdowns or choppiness in the market, only to realize that they were better off by not changing them and riding the storm with the system unchanged.
In our blog section on trading psychology, you will find videos where we have interviewed market veterans like Brian McAboy and eminent clinical psychologists like Dr. Takanori Endo. You will also find insightful videos about how to conquer your fears when trading and the top psychological mistakes you should avoid while trading.
Lastly, as a consistently profitable trader for over twenty years, I will share a little secret: you can always improve. In my journey as a trader, I faced several hiccups initially. But those hiccups were temporary. It took me time to look for areas where I needed to improve, like my trading approach, how to discern market opportunities and build strategies to exploit them, and how to have the right mindset as a trader. But you don’t need to reinvent the wheel as I did.
You can expedite your learning and become a profitable trader in a short time by going through our videos and content at Enlightened stock trading. You can also get your FREE stock trading resources to learn stock trading & improve your trading fast by clicking here: https://enlightenedstocktrading.com/free-online-stock-trading-courses-training/
Click Here to watch all of my Stock Trading Psychology videos in this special YouTube Playlist and don’t forget to subscribe to the Enlightened Stock Trading YouTube channel to get all of my trading video updates. Click Here to Subscribe
The contrast effect is a cognitive bias where our perception of something is influenced by what came before it. Humans are particularly susceptible to this bias, especially when it comes to how we perceive stock prices and value. You would think a bottle of wine that...
The House Money Effect is a psychological bias where people treat money they’ve recently won (or earned easily) as less valuable than their original capital. This leads to riskier decisions like a gambler taking bigger bets after a hot streak. This cognitive bias,...
Hyperbolic discounting is one of the most powerful yet least understood psychological forces in trading. This cognitive bias leads investors to choose smaller, immediate gains over larger future rewards, fundamentally altering how they approach position management and...
Most traders believe success is all about discipline and willpower. They think if they just push harder, force themselves to follow their rules, and "stay strong," they'll finally become profitable. Sound familiar? If you've tried that approach, you already know where...
Gambler’s Fallacy is the belief that past events influence future probabilities in random processes. Imagine flipping a coin five times and getting heads each time. After five consecutive heads, many assume tails are “due,” even though the probability remains 50/50....
Herd mentality is the natural human tendency to follow the crowd. It’s why people rush to buy the latest gadget, why traffic slows down to stare at an accident, and why trends explode overnight. This psychological effect helps people feel secure in their choices and...
Every trader, whether a beginner or seasoned professional, has faced the inner turmoil of making split-second decisions in a volatile market. Doubt creeps in. Emotions spike. And just like that, logic flies out the window. But what if I told you that the same mental...
Have you ever held onto a stock simply because of the previous price you initially paid for it? Or hesitated to buy because a stock seemed "expensive" relative to a past price level? If so, you've experienced anchoring bias in trading in your everyday life. Anchoring...
What is Anchoring and Adjustment in Trading?Have you ever bought a stock and fixated on the initial stock price you paid, refusing to sell until it returns to that level, even when the market condition is telling you to get out? That's what we call Anchoring and...
If you’ve ever stared at your trading screen, questioning every decision, hesitating to click "buy" or "sell," and feeling like your brain is spinning in a washing machine of analysis—welcome to the club. You’re not alone. This mental roadblock is called analysis...
Stock traders often pride themselves on logic and analysis. Yet, even the most data-driven investors fall victim to trading psychology traps, one of the most subtle being ambiguity aversion. This cognitive bias leads to avoiding uncertain situations, even when they...
Stock traders are naturally inclined to do something. When markets move, it feels uncomfortable to sit idle. That urge to act, even when no action is necessary, is called Action Bias. It’s a common pitfall explored in trading psychology that often leads to poor...