Updated: Jun 3
When people speak about the psychology of investing it’s almost like they are just talking about psychology per se but not how to have the right psychology.
It is impossible to have the right psychology as a trader or investor if you don’t have a working strategy and have unwavering confidence in that strategy through and through.
The reason is quite simple, if your strategy keeps losing you money you will either quit or keeping losing money and grow bitter.
There is another aspect to psychology which I believe is critical yet I don’t hear much about and this is mindset.
My version of getting into the right mindset is to do a dopamine detox, if you have bad habits that give you too many dopamine hits then your brain is accustomed to doing things in order to feel pleasure. This could be drinking, smoking, drugs, eating junk, binge watching Netflix, spanking the monkey or whatever it be. Get rid of these habits because if you do not then you will be unknowingly chasing dopamine hits when you trade or invest which could lead to impatience and a gambling mindset.
Getting the right strategy is half of the equation and having the right mindset is the other half, when you pair these together you put emotions aside and are able to easily focus on the main objective which is to buy and sell at the right time.
The profit is just a way of keeping score. This is a long journey so make it enjoyable in the right way, because you love what you do.
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