Psychology behind trading are two things
на канале: Oyedare Titus
Psychology behind trading are two things
Introduction
The Psychology behind trading are this two major topics take your time to learn and study them plus other others things about trading in general but pay more attention to this two
1. RISK MANAGEMENT
2. MONEY MANAGEMENT
Below are the pictures of Risk & Money management Psychology
Risk to reward picture must be ratio 1% to 2%. That means if things go against your plans you will let go of 1% of the entire account but 99% balance is still with you but if it goes in your favour you get rewarded with 2% of the entire account so you will be plus 2% growth on the entire account.
Money management picture is almost the same. Your total account in Money is 1000$ & 1% is 100$ to invest into a new business and now your capital for the new business is 100$ then you must not risk more than only 1% of the 100$ which is only 1$ so if you lose 1 you still have 99 more to trade with but if you're rewards with profit 2+100=102 based on compounding interest your capital is now 102 you can then work out the 1% from 102 for the next trade.
Conclusion:
If one can understand this psychological aspect of risk and money management you would be a good & profitable trader i can assure you that.
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