Why Van K Tharp Thinks That Trading Psychology Matters So Much

Managing your emotions is 60% of the trading game, and is difficult to achieve as it often goes against human nature!

According to Dr Van K Tharp and based on a broad number of subjects, it has been found that human nature, or what we tend to call ‘common sense’ is the most common obstacle that gets in the way of trading, and sabotages our potential for success. Dr Van K Tharp summarizes all good trading methods, as having the following distribution:

60% Psychology, 30% Money Management, 10% Trading System. A trader with a good mindset can pick up the worst of systems and still win, here’s why:

Correct trading psychology cuts losses early, doesn’t allow for wishful thinking to influence their decision.
Correct trading psychology does objective technical analysis, on the contrary people who have for example a long position on, cannot do objective analysis, their emotions lead them to spot all sorts of bullish signals on the charts.
Correct trading psychology shows you how to keep cool no matter what happens, it leaves no room for luck, superstition, feelings and the potential to deal with reality from a distorted point of view.

Since trading psychology is the most important factor, it is impossible to achieve sustained profitability, in any market environment without knowing how to deal with the unknown. Van Tharp offers emotionless trading, being well prepared for the unknown and also not getting too excited about winning.

The Van Tharp trading system and methodology is not some kind of short-lived successful recipe for big profits, rather is a realistic approach to trading the markets month after month. Profitability is realistic and grounded in reality, but is very sustainable and thanks to Dr Van K Tharp is also as stress free as possible, in fact its principles will spill over to your everyday life and help you remove misleading emotions on a number of things that also require high focus.

Stop dealing with trading reality from a distorted point of view, everything around you contains false information, TV, finance websites and all sorts of market gurus whose opinion we have an emotional tendency to take for granted… let Van Tharp take you to new ground where emotions are removed and are completely irrelevant.

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