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​The Mindful Trader Newsletter​
​Issue #8 - June 17, 2023

Writing this mail from Goa.
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Although I am on vacation for a week here by taking a break from active trading, I started reflecting on my trading journey and the learnings I have experienced all these years.
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I'll be sharing 21 simple yet effective personal trading learnings. It helps to level up your trading journey.

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You can focus on a few best ones first & test them enough. You cannot stick to any good strategy if you keep switching between multiple strategies.​

Every trader's journey is different. The only best comparison that can be done is with your past performance and mindset.
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Comparing with others can be good only if you use that learning and improvement purpose.
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Exiting the trades at the right point is as important as the entry. The stop loss is the first thing you must decide before entering the entry.

Right-stop loss helps in determining the correct position size as well.​

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Overtrading is one of the top reasons why anyone lose money in trading; learn to sit idle when there is no trading opportunity. Quality of trades is more critical than quantity.

Especially for the breakout trades, you must never enter any trade before the candle closes. This simple hack can help avoid many false breakout entries and impulsive trades.

You need not always be right; maintaining a 60% win rate with solid risk management is enough to sustain and grow your capital.
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Do not have the ego factor to take revenge on the markets when your analysis goes wrong.

Be humble enough to accept your mistakes and wrong analysis.

You can focus on risk management and following your system; profit is a by-product of the process.
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This is my favourite personal hack.

You may not emphasise profits when you see any profit on the De-Mat account.

Once you see them in actual cash, you know the importance of that money. This helps avoid over-trading.
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This is easy to say but hard to follow. If you keep breaking your setups and rules, you will never be able to develop a profitable trading system.
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Once in a while, you can actually look over the trading system and make necessary modifications, but try to stick to your trading plan.

Give equal importance to your profits as you give to your capital.
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Most of the time, we tend to take risky trades with the profit we have generated but keep playing safe trades with our original capital. This tendency is called "Mental Accounting Bias."
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You must treat your profits as part of your money/capital and treat it the same as your original capital.

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Sometimes you may feel you messed up your personal life.

It's important to realise that and take a break to regain the balance.

I suggest you take occasional breaks from trading; it helps you reflect and avoid being addicted to trading.

Trading can become an addiction if not controlled, do not become a victim.

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Blaming others for your loss will never help you grow.

You can take advice/help from outside sources, but ultimately, you must be accountable for your loss.

Even with exceptional trading knowledge, it doesn't help if your emotions control your logical analysis.

The first step to controlling emotional trading mistakes is to identify the emotions you are going through during the live market.

Once you know them, it becomes easy to overcome them by following the right approach.

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Many traders will realize this fact after losing a substantial amount of capital.
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It took me a long time to realize that most emotional mistakes happen only when you exceed your ideal position size.
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Never increase your position size unless you increase your overall capital size.

There needs to be some mechanism through which you can identify your trading mistakes, Journaling regularly can help you understand the type of mistakes you are making.
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If you are not aware of the mistakes that you are making, improving your trading performance is challenging.

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Stock Market and Trading is not a small subject to understand in one go; it can take years of experience.
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And the reality is no one knows everything about trading in the stock market. Everyone is learning and evolving at their own pace.
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If you ever feel like taking guidance and training from anyone can help you with time and money, consider doing.
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Many blame the lack of capital as one of the main reasons they cannot make money in trading.
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Of course, you need some basic capital to get started and manage the risk better.
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But if you cannot manage small capital, you first need to work on your mistakes before increasing the capital.
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For someone making 1 Lakh, profit can be significant; for another person, even 500 can feel like a significant profit.
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It all depends on how much money they are deploying.
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Never calculate or compare your risk and returns in absolute figures; always do it as a percentage of your total capital.

And never forget these three trading truths below:

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You can become a better trader with constant practical learning, emotional discipline, and common sense.
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Have a great weekend :)
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Until next time,
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- Arun Bau

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Lanco Hills, Hyderabad, Telengana 500086
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