Stock trading is closely related to trader psychology. When you talk about trading, you're not just talking about buying and selling stocks. A trader who is in a good psychological condition will find it easier to profit than a trader who is in a psychologically unfavorable condition, even though the market conditions are bullish. Have you also experienced this?
If your condition is not in a good psychological condition, then I suggest you to stop (read: rest / rest) from trading.
But... What kind of unfavorable psychological condition is that?
You should stop trading if the following three conditions occur: First, when you experience a heavy loss (which psychologically bothers you). Second, when you get a big profit. Third, the mood is bad.
The first condition: When you experience a big loss.
When you lose, with a note that the loss affects your psychological state, then you should take a break from trading. What kind of losses affect your psychological condition? Only you know the answer.
The feeling is, if your capital is 100 million to 50 million, it will definitely affect your psychological condition. But my advice, if you have lost 10%, then you should rest first. Don't force trades. Because when you lose, your mind will tend to be less calm, so your trading decisions may become non-objective and only fixated on repaying existing losses.
In fact, there are lots of traders who, when they lose big, keep trading. Finally, instead of losses that turn into gains, but the existing losses grow bigger.
Second condition: when you get big profit.
If you read the second condition again, I'm sure you'll protest with me.
Why is the profit condition even told to stop trading?
Why do you have to take a break from trading in big profit conditions?
The condition of large profits has the potential to make someone to be GREEDY (greedy). If you are greedy, traders will usually lose their objectivity in analysis. Traders tend to want to continue to pursue profits. This is the reason why many traders who are already profitable, suddenly turn around again, their portfolios are losing and filled with stuck stocks.
If I compare it with the parable of life, then in life the real test doesn't just happen when you are in trouble (loss in trading). But the test also comes when you are rich and abundant (profit in trading). Because when someone becomes rich, usually there will be a tendency to spree, arrogant, consumerism, materialistic and others.
Likewise, when traders get big profits, there will be a tendency to be euphoric, selfish, lustful, wanting to continue to pursue bigger profits. Well, to suppress these negative desires, traders must take a break from trading. This break is intended so that you are psychologically more stable, and your euphoria is reduced.
If you have profit, try to do other activities that are fun for you. Read books, watch movies, travel, go play football....... Anyway, forget about trading first.
Third condition: you have nothing to lose, but you are in trouble
When you have personal problems, are angry or even overjoyed. or you are in a bad mood. You should rest first, even though you may not be in a loss condition. These conditions can affect your objectivity in making trading decisions.
Next question: Stop this trading for how long? 1 day? 4 days? 1 week? 1 month? 3 months?
Only you know the answer. In essence, if you are experiencing the three conditions above you should take a break from trading, to restore your psychological condition.
OTHER WAY: The best time to stop trading sometimes doesn't have to be done with a break. What do you mean? I mean, "stop" trading can be done by reducing the size (number of lots) of the trade significantly (done when you are in a losing position). For example, you usually trade large lots. When you lose, you keep trading but with a very small number of lots. 5 lots, 7 lots, 10 lots. 12 lots.
The goal is to restore your trading mentality and confidence. This is what I did when the stock market crashed in 2015, which was to significantly reduce the number of lots traded. Slowly but surely, I was able to turn a huge loss into a BEP.
So, your success in trading is closely related to psychology itself. Your technical analysis prowess is nothing compared to your psychological management skills. No matter how good your analysis is, but you can't control your psychology, your trading career will not last long.
