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Most professional traders have a balanced
emotional outlook on the marketplace, due to years of experience
managing their expectations.
Most new traders ride the emotional extremes
during their trading, sometimes even higher than the actual marketplace
swings.
Emotion distorts reading of market behavior
and can severely impede logical judgment.
Many people trade to experience the raw
emotion that is diluted in real life experiences, but are not aware
that's their real motivation in trading is excitement (rather than
making money).
Investment psychology is what
separates the best from the rest. Given a same opportunity, the most
emotionally independent traders are able to listen to the marketplace
and adjust their positions based on market activity and in line with
their trading strategy.
Your emotions have no effect on the
marketplace, so it is really important to learn to filter your hopes and
fears away from your trading decisions.
Trading is much like boxing, except that
there are no outside refs to stop the fight when you are in serious
trouble. No boxer ever won a fight without taking punches, so you have
to learn how to defend and when to attack. The objective is to win the
fight, not every round.
The best way to win in the marketplace is to
take small losses and leverage on your winning streaks. Keep it simple
and never lose track of your objective in the marketplace - always make
money.
Also, make sure to pick the right weight
division during your trading education. You have to specialize in an
area that suits your natural talents and tolerance for risk, as well as
your size of your trading account.
Investing is one of the most rewarding and
important skills you can learn in life. If you are able to master this
game, you will live life according to your plans and desires. |
