So far we’ve concentrated on looking at how fear and greed can affect a traders ability to follow their trading plan, and then we started deconstructing those fears piece by piece.
In this post you’ll find some more strategies for dealing with the fears that may be sabotaging your trading.
Understanding where you are strong means having an edge. For example, one that stands out for me is a successful options trader. Before becoming a trader he was in the navy, and one of the things you can associate with defense forces is the strict discipline they must learn. You may or may not already know that discipline is an important key in trading success; and this man turned $10000 into 1 million in 3 years!
Unfortunately, many don’t find out what their strengths and weaknesses are until well after they have taken a solid beating from the markets. An example of this is getting involved in a trading system or buying a course where the meat of the trading is discretionary, meaning you analyze and make discretionary decisions based on your analysis. There is absolutely nothing wrong with this approach if it suits you, but for many it does not. Some people need a solid set of rules that require nothing more than if A = B, then do C, and this is called mechanical trading.
In my last post on trading psychology we started looking at some of the indvidual fears that traders can have, and also some of the effects greed can have as well. But if you missed reading it, click Understanding Fear and Greed and read that post first before reading on.
In this post, we’re going to start looking at how you may control fear and greed, so I hope you have your list of fears handy as we might be able to cross some of them off.
In a previous post we talked about lack of a trading plan being one of the reasons traders lose money while trading.
In this post we’re going to talk about one of the other reasons; and that is the inability to trade profitably due to emotions such as fear and greed.
In his song “The Gambler”, Kenny Rogers sang; “You’ve got to know when to hold ‘em, know when to fold ‘em, know when to walk away and know when to run. You never count your money, while you’re sitting at the table, there’ll be time enough for counting when the dealings done“.
He could have been singing about trading, because I think those lyrics cover two of the main issues affecting trader’s success. They are… (more…)
Trading and investing can mean different things to different people, so let me share with you the way I define these terms.
I’m sure the dictionary and tax office will have alternative definitions, but to me it’s about the involvement of the trader in actually trading.
Let’s start by looking at decision making.
To me, a trader is someone who… (more…)
Once the decision was made to found The Elite Insiders Group; BJ Dibbins, Dean Whittington and myself (Sean Rasmussen) got into action to put this blog together along with The Elite Insiders Group membership forum. The first question we posed was of course: What are we going to do that is unique to the rest of the market?
Well, that was a good question and we put our heads together. It really didn’t take long at all to come up with the way we were going to help the average stock maket trading “beginner” to get established in their learning path to trading the market successfully.
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You may have seen me on some forums as BJ Dibbins, but for those of you that don’t know me here is a brief intro.
My interest in wealth creation began in January 2005 after my brother-in-law loaned me a Jamie McIntyre free DVD from 21st Century Academy. Shortly after watching that I had ordered my homestudy package and since I was lucky enough to be on annual leave at the time I had the chance to watch them all within a couple of weeks.
To me, this was a real eye opener as to what was possible, and I still regard it as an excellent introduction to learning about wealth creation strategies and mindset.
So before the month was even over I had placed my first trade (hands up if you can spot my mistake?)
