DISCORD.GG/OCTATRADERS
~ A Platform Made By Traders For Aspiring Traders ~
CHAPTER 1
Trading psychology refers to the emotions and mental states that influence a trader's success
or failure. It encompasses the different aspects of a person's personality and habits that impact
their trading decisions.
Discipline and risk-taking are two crucial aspects of trading psychology. Fear and greed are
the two primary emotions that drive trading behavior, with hope and regret also playing a
role.
Trading psychology is just as important as knowledge of technical and fundamental analysis
and understanding market sentiment. Pros have strong emotional and mental discipline,
which sets them apart from typical traders.
Greed can drive traders to engage in high-risk trades and overlook important investment
details. Fear can lead to impulsive market exit and panic selling. Regret can cause a trader to
violate their discipline, resulting in losses.
It is essential to recognize and manage emotions in trading for success. Continuously reflect,
learn from mistakes, and improve trading psychology.
CHAPTER 2
Psychology of a losing trader:

Random reinforcement can lead to incorrect correlation between random outcomes
and trader's ability.

Trading without education can be dangerous.

Trading like gambling (without knowledge of technical/fundamental/sentimental
analysis) is risky.

Trading psychology requires managing emotions and practicing discipline.
Revenge traders and FOMO traders face common emotional challenges in trading:

Revenge traders act on emotions after losses to recover quickly, but it can lead to
larger losses.

FOMO arises from social media and leads to unrealistic expectations, lack of longterm perspective, and overconfidence/underconfidence. Emotions can cause traders to
abandon plans and surpass risk limits.
CHAPTER 3
FEAR:
Fear is a common feeling among new traders, but it's important to overcome it. When faced
with unfavorable news or market movement, traders may be tempted to liquidate assets, but
this could also prevent potential profits. To better handle fear, traders should understand
what they are afraid of and why.
FOMO (Fear of Missing Out) is also common among new traders, who are excited
and fearful of missing out on a specific trade. It's important to remember that there
will always be another trade and success in trading requires time, patience, and
commitment, not just one trade.
GREED & HOW TO OVERCOME IT:
Greed is a prevalent emotion in trading and can lead to financial destruction if not
controlled. It causes traders to cling to a position for too long in an effort to extract
more value, resulting in devastating losses due to fluctuating coin values and market
exchanges.
To overcome greed, traders should reflect on the reasoning behind their behavior. Ask
yourself why you wish to increase your profits and why you are willing to risk. By
understanding the underlying cause of greed, you can better manage your emotions
and make more informed decisions. It's important to remember that no one is 100%
correct in trading and even expert traders can't always predict the future. Indulging
in greed can lead to careless decisions, so it's essential to consider the potential
consequences before making any moves.
CHAPTER 4
IMPORTANCE OF HAVE A TRADING SHEET/JOURNAL:
As tedious as it may sound, keeping track of every specific trade notion, decision, and result
may be the most essential component in determining whether or not forex trading is going to
be a long-term success or failure. A trade journal is a great way to track your progress as a
trader, and here are some of the reasons why you should keep one. If you want a complete
trading log, you should also include notes about how you made your trade decisions, such as
the entry and exit prices and the number of pips won or lost. This includes things like how
confident you are in the trade setup, how you react to anticipated and unanticipated market
events, and how you make decisions midway through the trade.
Keeping a detailed trade journal is a good alternative for people who don't have the resources
to keep a detailed record of their trades. By reading a trade journal, you may keep track of the
errors you make most frequently and find solutions to the issues they produce. From there,
you will be able to gain more confidence in your ability to handle common trading
circumstances or to adhere to the trading strategies you've developed. You will also be able
to track data and statistics if you maintain a trade journal, which will increase your confidence
in your strategy's ability to generate consistent profits. If you have such a high level of selfconfidence, you will be able to focus on successful design rather than second-guessing your
strategic decisions.
COMPONENTS OF A TRADING SHEET/JOURNAL:
A comprehensive trading journal is key to determining its effectiveness in trading. It should
include relevant trade specifics such as entry and exit prices, as well as comments on the basic
bias and decision-making method. The journal should have sections on the specifics of the
trade, including entry and exit points and explanations for why those specific levels are being
monitored. A section on why the trade is being taken and a risk management section that
includes scaling-in and scaling-out plans should also be included.
In addition to recording pre-trade thoughts and the decision-making process, the journal
should also have a post-mortem of each trade, including evaluations and necessary changes
for future trade setups. Each trade and overall performance should be reviewed for continuous
improvement.
CHAPTER 5
HOW TO LEARN FROM YOUR LOSSES:
In order to evaluate your trades and determine what went wrong and what went well, it is
important to conduct a thorough assessment. This can help you learn from your mistakes and
improve your performance in future trades. If you can identify the root cause of a bad trade,
such as incorrect pricing bias or poor trade implementation, you can work on correcting it.
Fear of losing, greed, overconfidence, and indifference are some of the emotional pitfalls that
can affect traders and lead to poor performance. Keeping a trading journal and tracking your
reasons for setting stops, goals, and making mid-trade modifications can help you identify
problematic tendencies in your behavior. Remember, even losing trades can be valuable
opportunities for learning and growth. Taking a break from trading if you become emotionally
numb to losses is also a good idea.
HOW TO LEARN FROM YOUR WINNING TRADES:
Previously, we discussed how to get knowledge from failed trades, but now we'll look
at how to gain knowledge from successful deals. In most cases, winning trades contain
useful insights that a trader may build on in order to make more money in the future.
You may learn from your faults in unsuccessful trades, but you can also recognise your
strengths in successful ones. By jotting down the things you performed well, you'll be
able to remind yourself of the profitable trading practices you should continue to use.
Repeated successful trades, on the other hand, might inspire overconfidence,
cockiness, and optimism, leading a trader to believe that he has nothing more to learn.
To ensure long-term profitability, it is critical to analyze your trades and judgement
process, even when a trade ends up being profitable. To remember the lessons you've
learned from your successful trades, consider making a list of the ones that didn't work
out so well. Tracking your winning trades also serves as a powerful reminder to
optimize your profits. In the crypto market, there is no limit to how much you may
study, and you'll always have room for improvement.
CHAPTER 6
HOW TO RECOVER AFTER BLOWING UP YOUR ACCOUNT:
Beginner Crypto traders are not uncommon to lose all of their money due to
inadequate risk management or a string of bad trades. Trading expertise and discipline
are essential, but having a strategy in place in the event that your account is blown up
is essential as well. The best way to deal with blowing up an account is to focus on the
positive rather than the negative. Acceptance may be a good place to start in order to
begin the process of healing from the pain of the loss. Take it as a lesson learnt and a
chance to get back on your feet, rather than dwelling on the negative aspects.
Try to determine what went wrong after recognizing the fact that you've lost your
money. Each trade may have been a little too risky, or you may have been overindebted, or not done enough research before making trades. Evaluating your choices
might lead to a number of questions, and keeping a record of your blunders and how
to prevent them in the future is important. When reviewing your trading method,
make sure it is functioning for you and consider running more back-tests on your
mechanical system or analyzing the rules of your trading system to determine if they
need to be changed.
Next, you should go back to your demo account and try again. This allows for testing
changes you intend to make to avoid another forex account wipeout, and also helps
you recover your self-confidence in trading. Remember to take your time and not rush
to prove that you are a better trader, as taking it slow and relearning the fundamentals
is crucial.