6 Tips for Mentally Preparing Yourself to Trade

When someone decides to try online trading, they need to have enough knowledge, experience, and capital to get started. However, many new traders forget about the most important part of becoming a successful trader— mental preparedness.

Trading is the buying and selling of underlying assets. It seems easy, but it’s not. Traders can experience losses and wins, and still feel odd about themselves. Although you can get used to feeling various things when trading, preparing yourself in advance can also help you move forward.

As someone who hasn’t been under the stress of online trading, it can be difficult to prepare yourself for what you’re about to face. So, where should you start? Fortunately, there are some ways to do so. In this article, we’ll discuss some tips for mentally preparing yourself to trade.

1. Create a Plan and Stick to It

Before you start trading, one of the things you should secure is a clear plan. Of course, when you’re about to make a plan, you should also have enough knowledge about how trading works and why having a trading plan is important. You can look for inspiration and mentions in crafting the best trading plan.

Once you have the ideal plan based on your strategies, you should stick to it. The usual trading plan should include risk management, entry and exit plans, emotional cheque breaks, and timeframes.

If you’re able to stick to your trading plan, it’s easier to move forward without complicating things and making impulsive decisions.

2. Prepare to Lose

Whether you’re a new or professional trader, losing in a trade is possible. You can prepare the best trading plan and still lose due to market volatility and other factors. So, when trading, always prepare yourself mentally for the possibility of losing.

One way to do this is by looking at trading as a business. Although you can get attached to it, accepting that the market changes most of the time can gradually help you handle losses. But aside from that, you can also constantly remind yourself that trade losses should not define you, and focus on the long-term consistency instead of always doing it right.

3. Start with a Calm Mind

Once you start online trading, it should be done consistently. Whenever you’re opening or closing a trade, you should start with a calm mind. Eliminate all your worries, focus on your plan, and be as objective as possible.

In addition, be aware that calm also means you shouldn’t be overconfident. There are times when you’re so focused on maintaining a winning streak that you’re no longer following your plans.

If you think you can’t control your emotions, stay away from your screen for a few days or so. This also prevents you from feeling burned out, and you can stay focused on other important things in your life, such as family, friends, your main job, and other hobbies.

4. Set Realistic Expectations

Since nothing is sure when it comes to trading, setting a realistic expectation is a must. As a beginner, your expectations should match your knowledge and experience. This allows you to control your emotions better than hoping you make money frequently. Besides, you should be aware that there are professional traders who are more knowledgeable and experienced compared to you, so you should take one step at a time.

In the meantime, there are things you should bring your focus to, including protecting your capital, appreciating small wins, and accepting that there are times when you don’t have to trade (especially when the market is a mess).

5. Track Your Progress

As a beginner, one of the things you can do to track your progress is to keep a trading journal. After each trading session, answer simple questions, such as:

• Did I follow my trading plan?
• Did it work?
• Are there parts of the plan that need improvement?

These can be your initial questions, but don’t hesitate to add more that can help improve your overall trading experience. The more you input the results of your trading into your journal, the easier it is to understand and reflect on the things you should improve. Once identified, you can make the necessary adjustments that can help you in your future trades.

6. Surround Yourself with the Right Environment

Since online trading is done alone, it can sometimes be lonely. However, if you’re planning to surround yourself with other aspects that involve socialising, keep it on the healthy side. For instance, if you want to join online communities, choose those that can help you instead of those that can put pressure on your trading progress.

If you’re using the TradingView platform, you can join various communities where you can gather ideas and tips that can help with your trading journey.

Meanwhile, aside from the online communities, you can also talk to your friends who are also into trading, so that you can feel that you’re not alone with all these difficulties and achievements.

Final Thoughts

Being mentally prepared to trade isn’t just an option. Every trader must have a clear mind so that they can focus on their plans and avoid making the wrong decisions. So, whether you’re a beginner or not, don’t hesitate to consider the tips in this article for a better trading experience.