Trading psychology is one of the most important factors in a traders success. A person can spend countless hours studying the market, taking courses from big time wall street executives, and buying the most sophisticated trading software and still fail. What a lot of people do not understand is that their mental personality is far more important than their desire to be a good trader. Just like we have body types, there are mental types. Some people are just born with the ability to cope with the trading lifestyle better than others.

To be a successful trader you must be able to look at the money in your account and not get emotional when its going down or up. It is important to look at trading performance and make sure you are doing the right thing no matter if you are making or losing money. This is easier said than done. For many people as soon as they take some losses they believe they will never have a winning trader again. Sure enough they hit their mark and a trade is working in their favor. Now the reverse takes over. They become so afraid that the new trade could lose they will cut profits well short of where they were supposed to just to make sure they did not have another losing trade. All the while they have taken several losses and then a small gain so they are well into the red now.

To be successful you must have a trading plan and be disciplined to stick to it. This seems logical and easy, but it is critical to not let he emotion stop you. If you must putdown $1,000 on a trade, but you just lost $300 yesterday you may be reluctant to put the $1,000 down again. If you are unable to stick to your plan then trading will be a disaster. You must have a plan and sufficient capitol to carry it out. One rule of thumb is to never risk more than 1% of your total account balance on one trade. This makes trading less sexy, but it will also preserve your account and allow you to trade another day. People that end up losing risk 5%+ on each trade and can lose upwards of 20% in one month. When this happens you are fighting your emotions and an uphill battle back to breakeven. Forgot trying to make a profit. I have seen this many times before.

It takes a special personality and enough risk capitol to be a successful trader. But hey even if you are not cut out to be a day trade that doesn’t mean you can’t participate in the profits. With the advent of auto trading now you can also participate in the same gains than current day traders enjoy. Simply take a look at the fade machine and the trend machine. A small investment will get the ball rolling and it is completely automated.