Are you Mentally Tough to Handle Trading?

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Question 1
Answer 1
Question 2
Answer 2
Question 3
Answer 3
Question 4
Answer 4
Question 5
Answer 5
Question 6
Answer 6
Question 7
Answer 7
Get your Results Trading Psychology

Question 1

You took a trade assuming that it would be a sure-shot success. However, it starts turning against you. What should you do now?*

Wait till the market turns in your favour

Get out of the trade

Follow rules in the trading plan

Answer 1

Correct

Great job.

There’s no guarantee that a trade would work out. You need to have a solid trading plan in order to make decisions quickly.

Wrong

It seems you are wrong.

The answer is “Follow rules in the trading plan”

There’s no guarantee that a trade would work out. You need to have a solid trading plan in order to make decisions quickly.

Question 2

A trader keeps checking his profits/losses every few minutes. Is he right or wrong in doing so?*

He should do it

He shouldn’t do it

Answer 2

Correct

Great job.

Checking the P&L every few minutes is a bad idea because it triggers the feelings of greed and fear and we are more prone to making irrational decisions.

Wrong

It seems you are wrong.

Checking the P&L every few minutes is a bad idea because it triggers the feelings of greed and fear and we are more prone to making irrational decisions.

Question 3

Frequently adjusting your stop loss is a:*

Good idea

Bad idea

Answer 3

Correct

Great job.

People keep adjusting their stop losses because they don’t want to take a loss. The problem in doing so is that one of these trades will go out of control and they have to take a huge loss. Therefore, respect the stop loss.

Wrong

It seems you are wrong.

People keep adjusting their stop losses because they don’t want to take a loss. The problem in doing so is that one of these trades will go out of control and they have to take a huge loss. Therefore, respect the stop loss.

Question 4

A trader with 5 Lakh rupees of capital takes a very risky intraday trade and that trade turns really ugly. Instead of cutting his losses, he just waited hoping for the losses to become smaller. By 3:20, his losses were about 50,000. What should be do?*

Carry the position to the next day because there’s always a chance that the market will turn around the next day.

Take the loss (partial or full) in order to avoid further damage to the trading capital

Answer 4

Correct

Great job.

This is a very tough situation, which resulted purely because the trader had no trading plan and partly because he was afraid to take a loss when it was small.

However, at the end of the day, we would rather take a loss rather than carry the trade to the next day because any significant gap up/down can double/triple the losses.

Wrong

It seems you are wrong.

This is a very tough situation, which resulted purely because the trader had no trading plan and partly because he was afraid to take a loss when it was small.

However, at the end of the day, we would rather take a loss rather than carry the trade to the next day because any significant gap up/down can double/triple the losses.

Question 5

A lot of traders use bracket/cover orders in order get additional leverage. It is a sign of:*

Fear

Greed

Smartness

Answer 5

Correct

Great job.

Majority of traders using these orders are driven by greed.

Wrong

It seems you are wrong.

Majority of traders using these orders are driven by greed.

Question 6

The rules required in trading should be:*

Made before taking any trade

Made after taking a trade

There are no rules in trading

None

Answer 6

Correct

Great job.

Your rules should be clearly documented as part of the trading plan BEFORE you take any trade.

Wrong

It seems you are wrong.

The answer is “Made before taking any trade”

Your rules should be clearly documented as part of the trading plan BEFORE you take any trade.

Question 7

You took a trade but that didn’t work out and you incurred a loss of 1 Lakh rupees. Now, you can not afford to lose that much money, so in order to recover the losses, you take another trade with double the position size. This is an example of:*

Revenge trading

Desperate trading

Overtrading

Answer 7

Correct

Great job.

We have seen thousands of traders losing majority of capital because of desperate trading.

Wrong

It seems you are wrong.

We have seen thousands of traders losing majority of capital because of desperate trading.

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Are you Mentally Tough to Handle Trading?

Test yourself now

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