15 Trading Psychology Tips for Active Traders (2024)

As you embark on your trading journey, you quickly realize how important the psychological component of trading is.

Theoretical trading lessons become more complicated when you put them into action.

Just when you think you have it all figured out, emotions creep in, rules get challenged, and you’re back at square one.

It becomes clear that there are two parts to every trade: the trade itself and the trader (you!). Many traders spend their time focusing on trading strategies, but these strategies are only as good as their operators.

If you want to achieve long-term success, you need to focus on the “mental” game as much as you focus on strategy.

Trading strategy can be refined by analyzing chart patterns, setups, and trade plans. Trading psychology is refined by focusing on you, the trader – the one who pulls all the levers and makes all of the trading decisions.

Here are some trading psychology tips to get you started.

1. Embrace the “Next” Mentality

Day trading is a fast-paced activity. There’s no value in bringing the baggage from past trades into new trades.

Whether you are crushing it or getting crushed, you always need to be prepared for thenexttrade.

If you dwell on your wins, you become ego-driven. If you dwell on your losses, you lose confidence and your trades suffer.

Learn from your past trades, but don’t let them become baggage.

2. Take a Mental Note of Where You’re At

Don’t let one trade influence another trade. Approach every trade as if it’s the start of the day.

3. Avoid FOMO

You are not going to catch every trade.

Write that one down and commit it to memory.

Your goal as a trader is not to catchevery trade – it is to focus on the opportunities where you have an edge.

4. Move on From Bad Days

Every trader has bad days, weeks, and months.

Accept it, move on, and prepare for the next trade.

Successful traders overcome adversity.

5. Don’t Make Today’s Trade Tomorrow’s Problem

The beauty of day trading is that you can always come to the market with a clean slate.

Today’s bad trade doesn’t need to get worse tomorrow – unless you let it.

6. Take Control of Your Trading

Are you controlling your trading or is trading controlling you?

Trading can be addicting, and it’s easy to get sucked into stressful trades.

Focus on work-life balance and make sure you are building sustainable habits.

7. Focus on Consistency

Consistency is key to your success. Strive for consistency in all areas of life.

If your approach to trading (and life, in general) is all over the place, your results will suffer.

8. Beware the Blinders

Great traders do not get overly biased.

Every trade starts with a thesis – and this thesis can be proven right or wrong.

If you stick to your original thesis despite conflicting evidence, you are being stubborn and overly biased.

9. Focus on What Drives You

The monetary rewards of trading are only fulfilling for so long.

Focus on what really drives you so you can trade with purpose.

10. Be Skeptical of the Obvious Trade

Be cautious of trades that seem “too easy” or “too obvious.”

You should always be prepared to be proven wrong. Overconfidence is a precursor to disaster.

11. Don’t Dwell on Trading Losses

In trading, losses are just the cost of doing business.

If you want to make these “expenses” worth it, take away a lesson and move on.

12. Overcome Large Losses

Certain losses sting more than others. If you face a large loss, focus on what went wrong (and be honest!).

13. Stop Making Excuses

Successful traders don’t make excuses. They don’t blame the market or other traders.

Successful traders take full accountability, and this mindset allows them to constantly improve.

14. Stop Comparing Yourself to Other Traders

There are levels to trading, and there is always someone doing better than you (spoiler alert).

Learn from other traders and get inspired by other traders, but DON’T compare yourself. Every trader is at a different stage in their journey.

15. If You Are Wrong, Be Wrong

Being wrong is a part of trading.

If a trader has a 75% win rate, that means he/she is still wrong 25% of the time.

It’s okay to be wrong (repeat that a few times). It’s not okay to stay wrong.

Share Your Thoughts

Which components of trading psychology are you struggling with now? What changes have you made that delivered the best results? Leave a comment below!

15 Comments

Renaldo on July 21, 2021 at 6:17 pm
Thanks Nate you away know what to say to me when I need it
Reply
Zachary on July 21, 2021 at 6:25 pm
Definitely you addressed the main issues facing any trader as far as psychology is concerned which is to me the “most important ” thing in trading (in my opinion) because if your mindset is where it’s supposed to be then you will be saling smoothly but once your worries fears,lack of confidence, bad thoughts start creeping in then it’s DISASTER!!!
For me It’s always been and I’m still kind of struggling with letting things “go” I keep dwelling on losses,start calling myself names like : stupid,moron,…etc when I really focus and realize it was so obvious and I should have just done the opposite of my “ego”.
Calmness, Discipline and 100% on the trade at hand one at a time will take you a long ways and make you be consistent thus “successful “.
Thanks Nate,you are “truly” the symbol of “Altruism” and you deserve a big thumbs up👍👍👍👍
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Yaxaira on July 21, 2021 at 6:26 pm
Confidence and Conviction are big issues, even before having some losses on my account. It got worse. I don’t pull the trigger when I should.
Cutting my winners too short and letting my losers gain momentum. SMH… Hard to stick to my plans.
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Anonymous on July 21, 2021 at 8:12 pm
This is great! Rhanka
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- Phillip T Boney on July 22, 2021 at 7:48 am
  Awesome Information
  Reply
Prakash on July 21, 2021 at 9:47 pm
You are absolutely right on all the points you said Nathan. Thank you for reminding all traders
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- Anonymous on April 18, 2022 at 9:07 am
  Awesome content
  Reply
- Tonsing Keneddy Thanliana on September 20, 2023 at 8:05 am
  Awesome tips
  Reply
Lane Murray on July 21, 2021 at 10:11 pm
Nate, Awesome information .
Thanks
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Kay on July 22, 2021 at 3:45 am
You actually have out tones of value
Thanks
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Stefan on July 22, 2021 at 12:10 pm
Thanks, Nate! I love all of your great advice. It really helps me to trade and especially to learn. I’m still very much a newbie and it really helps me with your teachings.
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Harry Gordon on July 22, 2021 at 3:25 pm
Your 15 lessons are spot on. I still struggle with the need to win and as a result I frequently fail to allow winning trades to run and I still continually need to remind myself to cut losses while still within my stop loss rules.
I only trade 2 instruments; ES and NQ. Still everyone of your “lessons” I relate to.
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Mickael on August 2, 2021 at 5:32 am
Excellent tips as always.
Thanks Nate!
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DaveTrades88 on August 24, 2021 at 2:18 pm
Needed to go back and read this as I am struggling with FOMO again. Thanks again for making these blogs
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Anonymous on January 20, 2022 at 11:40 am
Thank you Nate. Great content
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