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The Psychology Of Trading 

Last Updated: May 11, 2022

By Rayner Teo

Trading is a mental sport, so I decided to share with you the trading psychology. I walk you through the thought process on the trades I took like Usdjpy, Gold, and Gbpaud.

The Psychology Of Trading:

I hope you have enjoyed this week’s market analysis. As always, comments are welcomed and encouraged. Cheers!

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  • Good One, Rayner.
    Not many “Gurus” in trading, can or dare to use real life trading position that they have taken as an example to educate and to share with others.
    Happy New Year !!

    Reply

  • Thanks for the great video Rayner! Hope you had a good lunar new year!

    I like how u stick to your game plan and not adjust your stop loss once u set it. But what is your take on major announcements like the recent FOMC meeting minutes? As a trend follower like u, i tend to pay attention only to the major announcements like non farm payrolls, interest rate decisions & FOMC & will adjust my stops to breakeven before their release.

    Also, correct me if i am wrong but it is proven that markets are ranging most of the time. As a trader who follows trends, how do u contend with ranging markets until u hit that big impulse move like usdjpy & oil?

    Cheers!

    Reply

    • Hi P,

      Thank you and wishing you a happy lunar new year too!

      I take note of major news announcement but it doesn’t affect my trading plan. If my stops is set in place i will leave it as it is.

      Because we can never predict how price will react to the news. Good news may lead to lower prices, likewise bad news can lead to higher prices.

      So what do i do? I simply trade my plan and not let news affect my trading.

      If a market is ranging, i will stay out of it till a clear trend emerge. Also even though price is trending, i may still cut my trade a few times till i catch it.

      Hope that answers your question! 🙂

      Rayner

      Reply

  • Hi Rayner,

    As usual very good video, I was monitoring GBP / AUD pair as well after you mentioned previously.

    I missed the entry last week,I think I can open a position tomorrow As price in good place.

    Thanks for the video, honestly speaking every Sunday I am looking forward to your video.

    Reply

  • Hi Tyler, wana ask you a question about position sizing.

    You mentioned that you only risk 1% of your total capital per trade, but when you suffer a drawdown do you adjust your sizing in that 1% risk?

    For example, if you suffer a 50% drawdown from $100k capital to $50k, when will you look to reduce your contract size of that 1% risk? Or do you adjust at all?

    Hope this make sense to you.

    Wade

    Reply

    • Hi Wade,

      that’s a good question. E.g. i start an account with 10k. I would risk 1% of my initial capital, 10k.

      If i lose 25% of it, meaning $2500 i would stop trading altogether and do a re-evaluation. My 1% a trade refers to my initial capital.

      Rayner

      Reply

  • Thanks for the reply rayner, so what will your 1% based on after you lost 25% of your 10k.

    Meaning after your revaluation will you use 1% of 7.5k or continue to use 1% of 10k?

    Thanks
    Wade

    Reply

    • I would base my 1% on 7500.

      Risk management varies for individual and it’s something you need to decide on your own. Because what works for me may not be the same for you.

      Rayner

      Reply

  • I see. What is your biggest drawdowns up to date since using your current trend trading strategy?

    (aka look for trends in weekly/daily, and enter postion/scale in based on 20/50ma in 4hr time frame)

    Wade

    Reply
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