Trading Psychology To Become a Successful Trader

Trading Psychology-Richard Dennis was born in January 1949 in Chicago. At the age of 17, he started his career as a broker on the Chicago Mercantile Exchange. After working for a while, he ventured to try to open a trading account on his own.

A Brief Journey

However, the first trade did not go smoothly. He suffered considerable losses on the capital borrowed from his family. However, he was not giving up. He kept evaluating his steps and learned from the mistakes he made until finally, he was able to get a huge profit from the remaining capital.

Richard Dennis managed to become a successful trader. He was given the nickname “The Prince of The Pit”. Richard Dennis’ success story has inspired many novice traders. Richard also wanted to prove to people that even an inexperienced trader could be as successful as he was.

He coached 23 inexperienced people. He called them the “turtle”, after the turtle in Singapore. Even though the turtle walks slowly, the turtle can still produce many eggs.

He thought he could develop a trader as effective and efficient as a bred turtle, even though the merchant had no experience and was hard to understand trading. According to Richard, a determination would open the door.

Richard Dennis has a message he wants to convey to his students to become successful. This message contains 7 trading psychology that students should learn. The 7 trading psychology that can even be used today.

Trading is a Possibility

What can you win, what can you lose, what are the chances of both happening – Richard Dennis

According to Richard Dennis, trading is simply a matter of probability. Therefore, before starting trading, the trader must already know and accept the possibilities that can occur.

We can make a big profit. However, there are times when we also get losses. This is where the traders prepare themselves in case of losses. They must be prepared to lose money that could run out in an instant.

Be Aware of Market Movements

Know what you are going to do when the market does what it’s going to do – Richard Dennis

If a trader is ready with the possibility of profit and loss, the next thing that needs to be prepared is to think about actions towards market movements.

The market is very volatile. Novice traders must prepare themselves to face market movements that will occur in the future. Prepare a strategy to deal with the possibilities that will occur in the market.

In essence, what is the next step to take if the market movement is by the prediction? What steps should be taken if at any time the market movement does not match the prediction?

Discipline

You’re not special, you’re not smarter than the market, so follow the rules! – Richard Dennis

Richard Dennis also tells his students, that after a trader prepares a strategy according to what has been made, tries to follow the rules that are made. Don’t break the rules just because you make a profit and feel smart.

Discipline to the rules that have been made will affect the psychology of trading not to be greedy. So, everything went according to the plan that had been made in the previous stage.

Anything Can Happen

Now and then, the impossible can and will happen – Richard Dennis

Richard Dennis advised his students that nothing is impossible in trading. Anything can happen. Traders who have made a profit can immediately lose.

On the other hand, traders who experience losses can immediately get double profits. In this case, traders should not give up and should focus on all the plans they have made, both profit and loss plans.

Risk Management

How to profit properly is the dividing point between winners and losers in trading – Richard Dennis

According to Richard Dennis, the next trading psychology that must be prepared by traders is to apply good risk management. Setting a stop-loss system by market movements to protect profits or losses.

In this way, they would be able to multiply their money quickly when the market is moving according to plan and not lose a lot of money when the market is not going according to plan.

Not Frequency, But Opportunity

It’s not about how right you are, it’s about how right you are – Richard Dennis

The next trading psychology that Richard Dennis taught his students was how to hold back until the opportunity arose.

Trading is based on a trend-following and breakout system. Therefore, traders only need to enter at a time that is considered profitable. Traders should not need to explore trading in unfamiliar markets.

Richard emphasized that it is not about how much you can get, but the consistent profit generated from the awaited opportunity. The only thing traders need to do is focus on the big opportunities that will fit their plan.

Strive To Learn

All my life I have not known a wise man of broad subject matter who does not read all the time – Richard Dennis

Richard Dennis advised his students that if you want to be a successful trader, you have to study hard because nothing can be obtained instantly.

He also suggests that no mentor in the trading market can ensure a trader’s success. A successful trader achieves success on his own by constantly learning about strategies, practicing emotional control, and honing his skills. Otherwise, traders will only fall victim to the market.