KEYS TO PSYCHOTRADING

Psychotrading is a fundamental discipline for success in trading, as it focuses on managing traders' emotions and behaviors. Here are three essential keys to practicing psychotrading effectively:

Self-knowledge and emotional management:

It is essential that traders develop a deep understanding of their emotions and how they influence their investment decisions. Fear, euphoria, and greed are emotions that can alter the logic of trading. Keeping a trading journal where trades and associated emotions are recorded can help identify emotional patterns and facilitate the regulation of these feelings1. In addition, it is recommended to practice breathing and mindfulness techniques, which help manage stress and pressure during times of high volatility in the market2.

Developing a rigorous trading plan:

Before making any trade, it is vital that traders develop and follow a structured trading plan. This plan should clearly specify entry and exit criteria, as well as expected risk and profit levels. The mindset should be objective and calculating, preventing emotions such as greed or fear from interfering with the execution of the plan.3 Adhering to the trading plan helps prevent impulsive decisions that can lead to significant financial losses.