We are all familiar with the glamorous image of a successful trader. The one who effortlessly becomes a millionaire, cruising around in a luxurious Porsche while trading on a pristine Hawaiian beach, sipping on a refreshing coconut drink. However, if you've been involved in trading for some time, you likely know that this idealized picture is far from the harsh reality.

Even though the statistics reveal that approximately 95% of traders never achieve financial independence please don't despair just yet! These statistics do not mean that your fate is sealed for failure. With almost 20 years of experience in the industry, I can confidently tell you that the main reason traders fail is often quite simple: they neglect the most crucial component of their success— their minds.

To truly understand why you're not succeeding in making consistent profits, you need to delve into your own mind. That's where trading psychology comes into play.

I've put together a list of 15 Essential Lessons in Trading Psychology to help you get started. These lessons will provide you with the foundational principles of trading psychology, helping you avoid common pitfalls that often lead to devastating losses. Mastering this X-factor is the missing ingredient for success in trading.

1. Detachment is crucial

Discovering what's stopping you and next detaching from it is one of the most crucial aspects of trading psychology. Why? Because your beliefs & emotions like fear, greed, and anxiety can cause you to make impulsive decisions that could lead to losses. By practicing detachment, you can separate emotions from your decision-making and focus on analyzing the market objectively.

What is Detachment in Trading Psychology? Detachment in a simple way is disconnecting from all things and thoughts that do not serve you and sabotage your efforts and make you act against your best interest.

The first thing you can do is view your trades as opportunities to implement your trading strategy and not as a reflection of your self-worth. Remember that no trade (and no result) defines you as a person or as a trader.

What helps is changing your self-talk. Focus it on the action. Replace "I am" with "I do" when you talk to yourself during trading (and outside of trading, too). For example, say "I just did such a stupid thing" instead of "I am so stupid."

2. Pause

Pause before you react. When you get triggered and you are about to react, make a note of the thought that pops up in your head first.

Try to get rid of any unnecessary (most of the time private!) elements of the equation such as "I need this money because I promised my wife that we will go on an expensive holiday this year". Better focus on double-checking your analysis, reviewing your trading plan, and ensuring that your decision aligns with your long-term goals.

Remember: Pausing doesn't equate to paralysis. It merely allows you to take a step back and think critically about your decision, enhancing your chances of success.

3. Align your goals

Align your goals with your desired lifestyle. Write down what trading success means to you and list all the things that trading will change for the better in your life. Can you see how much pressure you put on yourself? Adjust your goals and take some pressure off - put less at stake.

4. Find your unique path

There are many ways to walk the path to success. Ask yourself, what is your way and follow it. Don't try to imitate someone else. Everyone is unique and if you trade out of your own strengths, getting results becomes effortless. 

5. Do not try to predict the future

Stop trying to predict the future. No one knows for sure what's going to happen. It's the understanding that it is your ability to act in your best interest that matters - not your ability to control the market.

6. Monitor your thoughts

We have 60-70 thousand thoughts per day, and about 90% of those are the same as the day before. We tend to repeat the same behaviors because we keep thinking the same way. Start monitoring your thoughts and notice how you talk to yourself. How do you talk yourself out of the winning trades and talk yourself into holding onto a losing position?

7. Question your trading decisions

Ask questions and consider your doubts before you get into a trade, not when you're in the trade. Try to look from the opposite perspective. For example, if you are long in a trade and have the urge to cut it before your target, ask yourself "if I wasn't in this trade long, would I be looking to short it here?"

8. Set your criteria

Make a list of reasons why you would get in and out of a trade. What do you need to see happen to pull the trigger? To assure consistency of results, having a well defined trading system is key. My good friend and experienced trader Brian McAboy from Inside Out Trading can help you with it.  

9. Just don't...

If you are a day trader holding onto a losing position, and you start looking into the company fundamentals to confirm that you're right to stay in it – you are in trouble. If you find yourself doing it – that's your cue to get out.

10. Change your perspective

When a trade goes in the direction you expected, but you are looking to get out before your target is reached, for no reason other than the fear of losing your gain - switch to a chart with a higher timeframe to change your perspective. Things look different from a distance. 

11. Balanced Screen Time

Spend more time away from your screen. It's all about the balance. Remember that trading requires high level of focus and concentration and you cannot be 100% effective 100% of the time. 

12. Take breaks

Take breaks! Take a lunch break. Take time for a walk, a workout, or a nap every day. Start getting used to the free lifestyle you want. Decide who Is in control of your time – you or the market?

13. Change the position

Consider getting a standup trading desk. Except from strengthening your core and your back muscles, it will prevent you from fixating yourself on your screen. When you stand you constantly moving and balancing your bodyweight, making it easier to stay relaxed.

14. Take responsibility

Freedom goes hand in hand with responsibility, your ability to respond. If you are taking losses that you didn't account for, that shows your inability to handle freedom. The universe only gives us what we can handle and what we are ready for. You will achieve freedom with trading when you prove you are ready for it. So show the universe you are ready! Make sure you respond to the market that way that is in your best interest. 

15. Take action

Don't just wait hoping things will get better with time. Doing the same bring the same results. And in case of trading it begins with the way you think. So now you know, it's all in your hands (or I shall better say "It's all in your head").

If you're having a problem understanding how to deal with the psychological challenges of trading you can check my very effective coaching program The Trading Mindset Mastery Journey. It's helping traders to identify the underlying triggers of sabotaging behaviors and kick-start the process of changing it.