If an individual was to define the goal of the subject of "Trading Psychology" it would be defined as the ability or state of being emotionally unaffected by the markets.
By being unaffected by the markets it allows a trader to properly apply his strategy and get results with less emotional turmoil. This state is important when your managing a large amount of money because thats the ability you'll need in order to be a successful full-time trader.
because what is compulsive trading ? It a trader not applying his strategy or misapplying his strategy.
The end goal of understanding trading psychology is the individuals ability to be composed when trading. If you say someone has a good trading psychology it means he is composed when placing trades.
However Trading Psychology isn't why you lose trades. Its why your account balance crashes (Depletes rapidly or quickly) bad "trading psychology" or (no composure) can cause you to place trades you shouldn't place and close trades you shouldn't close.
When you ask people why they lose trades and they answer their psychology they'll mean one of two things:
A) They lost control of themselves and placed a trade they shouldn't have placed or closed a trade they shouldn't have closed because of emotional reasons
B) They don't know what they're doing, why its not working, the markets or trading itself so their psychology seems like the easiest way to explain this loss to themselves
Both of these things are easily remediable but you need to know which one it is. Its one of these two reasons.
This was a long introduction to the concept of the decisive trading fallacy however the fore-work had to be expressed as we have entered into a higher understanding of trading psychology. This concept/idea of composure is important and is the fore-work for how to handle certain ideas where expressed or unexpressed and how they can affect an individual while trading and making decisions.
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