Pilar Kedua "Mind" (Psikologi Trading) || The Second Pillar "Mind" (Trading Psychology)
After we got much profit, we still want it more We don't have profit target The more we enter the market, the more opportunity to fall. We must pay attention to it. Next, we continue to the next material; risk and money management. *Opening Music* The second pillar is Mind Mind is related to trading system or it's related to analysis Both technical (based on the price movement), and Fundamental (Based on world's economic, politic, social, geopolitics News. Including interest rate and so on.) *Sorry.. I was wrong in this part The second is Mind. It's related to trading psychology
or emotion management Yesterday, I've told you about mind or psychology component Our anxiety level in facing the market So, psychology can't be learned by book. But, we learn it based on experiencing controlling ourselves Usually, in trading psychology, The first factor is greed Then, want to get profit quickly Next, it's fear Afraid to enter the market, make mistake, get loss, etc. So, we'll think twice to do transaction because of fear. When there is opportunity, we feel doubt. Then, when the opportunity disappear, we enter the market. We lose the right moment. We get much loss. Then, we're not confident.
We don't believe our own capability Then, the third psychology is about high hope High hope shows up when we always get profit for our every transaction. The more we get profit, it will make us so happy We'll think that our analysis always right So, it makes us be lulled and be over confidence and we ignore our trading rules It's because of over donfidence and we always get profit in every transaction Because, when we are lulled there and ignore the risk, our budget will run out Always learn to face hard condition or do recovery often. Recovery is an activity which can minimize the loss When we get much loss, then we do recovery, the loss decreases There are many ways to do recovery You can add Buy, Sell, cut loss, and switching. I'll explain it later. That's the third part of psychology The last is regret Regret because we break our trading rules What happen is, we feel afraid to do trading again. We feel trauma.
Go back to Recovery There are 3 kinds of Recovery First, we can do cut loss. When the market reverses, there is no other way except cut loss. Cut loss is manual. Stop loss is we set it in the setting. Next, we can do Switching Switching is changing the position. First, we order Buy. When the market goes down, we change it. We close the Buy and change it to Sell. That's switching. Changing the position.
The third is about Averaging Averaging is very dangerous. If you never practiced it, I don't recommend you to do it. There are many kinds of Averaging. It could be adding the transaction Adding transactions can be one-way transaction and opposite transaction Adding also can add transaction, Lot, and so on.
We'll practice it later if there is wrong position We can also do more practice about recovery. So that it can fit in our character. By doing recovery, at least, we can decrease the loss That's about recovery, a part of risk management. The last part of trading pillar is Method. Many people prioritize this. It's related to trading sytem. Related to analysis There are technical and fundamental analysis Technical analysis is based on price movement Fundamental is related to News Politic, economic, geopolitics, socio-cultural News Whom has big impact in the market is big traders. They are USA and Europe The main market over is Europe You may prove it by searching it on Google. It's Europe's banks, companies, and etc.
That's about Method which is related to technical and fundamental analysis People always prioritize Method. People are always looking for the right, accurate, and valid analysis. So, they look for technical analysis book. There are candlesticks and many kinds of indicator.
The more we learn it, we'll feel confused. Because it's too much. If we feel hard to find it, what will we do? we'll look for signal or subscribe signal Free and paid, we join all of them. If not, we join investment Signal and investment failed, there is another opportunity; robot. We don't need to touch the transaction, let the robot works for us. The robot works for 24 hour. When we wake up, we'll always get profit
Many people become the victim of this model. Is it wrong? no. Robot also can help us but we still do trading too. We must know the basic. If we let the robot work for us only without our participation, it's very dangerous. That's our opening to make yesterday's material clear At least, we have overview. Don't only prioritize the analysis Because there is no fix analysis. We just can read the high probability to order.
the high probability which close to be valid and correct Close to correct means when we analyze the market wants to rise, at least there is opportunity and we order Buy. Analysis isn't for other people, broker, company, and so on. What we do is only read the potential, fulfill the opportunity which suits on our trading system Then, we order and get profit After got profit, we close it first. We won't know where the market movement will stop Once more, it's just based on habit and character which happened before Because market always go back to the past price memory If the chicken price is IDR 25.000, when the price becomes very expensive, it will go back to IDR 25.000 When it reaches IDR 15.000, it won't last long. It will reach IDR 25.000 again. Then, it will reach IDR 40.000 again (the price which has touched)
I explained to so that you'll know the process and the business mindset. Especially in trading. Well, the next material is the third pillar. It's related to Method.
It's still related to trading system When we want to do transaction, we must have plan and clear system. If we don't have it, we'll always fail. Trading system is the SOP (Standard Operational Procedure) If we want to order and have the rules, it will be so easy. Trading system is a part of our SOP. It's not for other people.
Every trader has different system The point is we know our SOP or our trading rules as plan which can be done continuously for our trading Because we do it continuously, we must have clear SOP and suit with our character and analysis principle Then, what must be prepared by us? We must prepare it so that we won't be confusion. Next, we're entering in making the trading system For sure in making trading system is how to determine the order and exit We can order but we don't know where must we exit. What will happen? After we got profit, the market reverse. It's because we only can do order. We don't know where must we exit. So, we must know how to determine the order and exit point.
We can know them by learning the technical I'll explain how to read the direction, order point, and trigger in the technical material. The point is you must know where is the order and exit area, when we don't order. So that we won't get stuck. Because we can't order every time. If we can order every time, we'll face long minus floating So, we must understand when is the right time, on what candle we want to order, and on what movement we can exit We must understand them.
Then, the next preparation is always limit the loss That's trading system. It must be clear. We must know our loss limitation We've discussed it in the risk management material. You can practice it there We don't play with our own feeling We measure and count the right number for the Lot.
How much right number to limit the loss? In what position we must limit it? It's included in risk management (we've discussed it) Next, determine the target We've also discussed it in money management. How much the target? Se, we have orientation number that we want to reach. If we don't have target, we just order - get profit - order - get profit, and so on. What will happen is we will always want to get more and more profit. We want to order more. We try to enter in any kinds of market condition Meanwhile, the market isn't qualified our trading system, but we still force ourselves to order We'll do over transactions Then, the market reverse. We'll try to get our loss back. So, we use larger Lot.
It can be over Lot. That's so dangerous. So, we must determine the clear target Next, learn to be discipline in reaching the target and applying trading system. If we do all of them discipline, we'll get consistent profit. I hope it's useful for our trading system preparation Next, we start to discuss technical material to be continued...