5. Those petrol emotions
High emotions are like gremlins, which stalk every trader poised to sabotage success. A string of losses leads to despondency and a run of profits to euphoria, which often results in over-confidence and over-trading. Top traders develop a sense of perspective and find mental rituals to minimise extreme emotional responses. Good money management can help reduce nerves and accepting that losses will often occur regularly and even sequentially can impart a sense of perspective. It’s vital not to take losses personally and to congratulate one’s self if they occurred as part of disciplined trading. That might seem contradictory, but developing discipline and forming the right trading habits is far harder than finding a profitable trading system. And it’s only when good trading habits are formed that a trader can really make money out of a good trading system over the long-term.