The consistently profitable trader replaces eagerness and impatience with patience and caution. The simplest thing you can do psychologically for your account is to prevent getting into bad trades in the first place.
Never be eager to trade but when your setup shows up, act without hesitation. This seems counter-intuitive, but this is how many predators work. You may have seen shows on discovery channel where a camouflaged fish stays without moving until a prey comes close enough and then it jumps suddenly and eats it. That's basically what the trader tries to be: patient but alert. With some exceptions, its usually better to miss a trade than to take a trade and be stopped out.
Once in a trade, a winning trader simply follows fixed trade management rules. For example, price either fills a fixed target or stops the trader out. There should be little discretion here, since your judgement, which was strongest before you got into a trade is now at its weakest. Every tick against a weak trader makes him panic and want to get out for breakeven or tiny profit. Every tick in his favor makes him push the target further out. The consistent trader does neither. Its not that he is any superior, its just that he uses mathematics to ensure that his odds of reaching a profit are higher than his odds of being stopped out and over time, he accumulates winnings regardless of what happens on this individual trade. The individual trade does not matter and losses are part of trading. Do not try to use your judgement now, its at its weakest. Use well tested trade management rules.
After a win, a poor trader is jubilant and will trade larger size and weaker setups (trading the house money). After a losing trade he is in dispair and curiously may do the exact same thing: trade larger and weaker setups to "make the money back." This is a well travelled shortcut to a blown account.
A consistent trader does no such thing. He simply tries to go back to pre-trade mode where he is patient yet alert.
A winning trader also knows when to stop for the day. Its utterly important not to have large losing days and too many losing trades in a day. Your mind cannot after a point control your emotions because you may not even realize you are in a state of desperation. A winning trader stops trading at a well defined daily loss limit.
Eventually, the winning days become larger than the losing days and a trader becomes profitable. For some traders this is a sudden change but for most its gradual and occurs with improvement in their trading skill.
Thank You for wonderful write up.....
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