Trading Psychology and Journaling
Recognise the emotional traps that cause big losses, and build a journal that makes you better every week.
Most account blow-ups are not caused by bad analysis. They are caused by what traders do after a loss — or after a big win.
The common traps
- Revenge trading: jumping straight into another trade, often bigger, to win back a loss.
- FOMO: chasing a coin that has already run because you fear missing the rest of the move.
- Overconfidence after a winning streak: raising size and leverage just before the streak ends.
- Moving the stop: hoping a losing trade will come back instead of accepting a planned loss.
Rules that protect you from yourself
- A daily loss limit — for example, stop trading for the day after losing 3% of the account.
- A maximum number of trades per day.
- No trade without a written stop, target and size.
- A cooling-off pause after any loss larger than planned.
Keep a trading journal
Record every trade: market, direction, entry, stop, target, size, the reason you took it, the result, and how you felt. Once a week, review it. Patterns appear quickly — the setups that work, the times of day you trade badly, the mistakes you repeat.
Key takeaways
- Revenge trading, FOMO and overconfidence cause more losses than bad analysis.
- Set a daily loss limit and a trade cap before the session starts.
- Journal every trade and review weekly; judge decisions, not outcomes.