6 Things That MUST Not Be Used In Your Trading
There are certain things that must be kept out of your trading, such as emotion, revenge, anger, your pocketbook, and fear. Every trader should follow a set of rules or guidelines in order to be a successful trader. When you trade without rules, you are essentially trading blindfolded.
Emotion: Wanting the market to go a certain way.
Revenge: Some people think they will get even with the market if they stay in or keep on putting on losing trades one after (cost averaging). The market doesn’t care about what you want. It will show you what it is going to give so learn to only want what the market is willing to give at any given time.
Anger: People will get angry with themselves and do foolish things to try and make up for a mistake.
Pocket book: When you are getting out of the market because you can not afford to let the market move a little. You were over trading your account or did not have enough money to trade to start with. A new trader with an under funded account has a greater chance of failure because he does not have enough room to let the market move and a little loss takes a big part of his trading account. This increases his emotions and compounds the trade.
Greed: When a trade has ended expecting it to give you more. Then it turns and you lose all you just made.
Fear: Many times people have fear because they are trading with money they can not afford to lose.
The Rules: A pre-defined trading plan. How many lots, how many pips, when to trade, when to get in, how long to stay in, practicing good money management, etc. It also means keeping a journal of your trades to learn from the positive and the negative trades and make sure your rules are working. Be sure you know what your trading platform can show you and how to use it’s features to your benefit.
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5 Responses to “6 Things That MUST Not Be Used In Your Trading”
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You make some very good points here. I would say one thing that MUST be used is patience. I think a lot of people get impatient when they are starting out: they want to make big money fast. Then they make big trades and can lose a lot.
Very true.
I agree with the comments above. A trader must have lots of patience and must know how to control his emotions in trading. Nice post.
You made some good points there. I did a search on the topic and found most people will agree with your blog. Thanks!
Excellent article; it pays to let the market come to you than making foolish mistakes chasing the market.
If she does not come to you, you ain’t going to die. There will always be an equal or better opportunity awaiting.
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