Slow and steady winning the race, the turtle beating the hare in the race. It's a tale which has stood the test the time as you'll see in this funded trader success story. Yet as technology develops and as people have jumped into the algo trading hype, everyone wants to get results quickly. There is no sense of patience.
Patience is a real skill as Paolo Lamparelli has demonstrated by recently passing the funded trader program evaluation, no rush, no fuss.
He worked on optimising his emotional intelligence before he took his trading to the next level. Many of you reading for a while should be noticing a common trend pertaining to trading psychology by this point!
But, I'll quickly outline 10 common trading psychological pitfalls and how to overcome them:
1] Underestimating the process, expecting to be a millionaire overnight. Accept like all successful traders, it will take time to be consistently profitable.
2] Becoming emotionally involved. Detatch from your trades; emotional trades tend to have no logical reason behind them.
3] Revenge trading. If you lost, you lost, accept it, it means you made a wrong call and is potentially your emotions having a negative influence- consider that.
4] Calculating profits before even entering the market. Trade the market, your balance shouldn't be your concern when analysing the market.
5] Relying completely on technical indicators. These should supplement your analysis. However, indicators are not crystal balls, price action is still king.
6] Expecting to make money every single day. This simply will not happen; some days you'll lose money and some days you will not make money. You need to be comfortable with risk and comfortable with losing money too.
7+8] Being over-cautious& Not being cautious enough (FOMO trading) — you need to find a healthy risk tolerance and work on your psychology.
9] Relying on others’ knowledge and trade ideas: you need trust on your trade plan, not someone else's.
10] Gambler’s fallacy: past events do not predict future events. Always exercise responsible risk management.
If you need help with tackling these trading psychological pitfalls we have check our: Psychology Consultation, Mentoring, and/or our Mastermind Program.
Below is Paolo's interview where he reveals the key attributes that helped him excel and what he would advice new traders acing the funded trader program.