The Mind Game of Day Trading
"If you have no confidence in self, you are twice defeated in the race of life. With confidence, you have won even before you have started."
Marcus Garvey The first step in controlling fear is to face it. If you are not willing to face your fear, then fear, not you will control your life. Courage is moving ahead even though you're afraid. Use fear as an opportunity to learn and progress. A trader can choose not to fear losing money and accept that losing money is a part of the trading business. It is very important that the trader completely and honestly accept the risks involved in trading. Trading is a business of percentages. Not every trade will make money. If a trader cannot accept the risk, he cannot fully commit himself to the trade. If he cannot fully commit himself, taking the next trade can be a frightening experience. Know the factors that give you an edge; pay close attention to them, and don't let outside distractions influence you. In general, all traders and investors need to take periodic breaks from the markets to clear their heads. This is particularly important when you are making psychological mistakes or have personal issues that could potentially interfere with your trading. Sometimes "doing nothing" is the most prudent action you can take! The protective mind is like an over worried mother; it is constantly creating "doom and gloom" scenarios, trying to scare the heck out of us, in the hopes that we won't try anything new. Its favorite words are "what if." "What if this happens? What if that happens?" Even though none of these things have actually happened, and chances are none of these things will ever happen. Unfortunately many people wait for their fear to subside before taking action. Realize that successful people have fear. Successful people have doubts and successful people worry. The only difference between those who succeed and those who don't is that successful people act in spite of their fear, doubt, and worry. So can you! A trading decision outcome has nothing to do with your self-worth, but is merely a profitable or unprofitable business decision. Most people who struggle with their trading do so because they don't believe 100 percent in what they're doing. Fear can be an opportunity to learn and progress. Learn from it and move on. Winners trade systems with high positive expectancy, sound money management strategies, minimal degrees of freedom to avoid curve fitting, and then puts the system into his business plan for implementation. He lets the market determine the outcome. A winner realizes that he produces the emotions he experiences related to trading and assumes responsibility to resolve deep-seated root causes for negative emotions that interfere with his trading business. A loser has a continually changing system/methodology based on whether or not the last few trades were winners or losers. He is scared of what "may happen to him" in the markets in the future. His position size is controlled by whims and notions. His exit points vary depending on how fearful he is of giving up open profits or how hopeful he is that a losing trade will turn around. Have a Plan: To build a house, you need a set of plans. The same holds true for speculating in the futures market - without a plan you are destined to fail. Determine what you are willing to invest to reach your goal. This takes the form of time and money. How much time and money will you spend researching, studying, going to seminars, talking to advisors, etc., to achieve your goal? The exemplary trader has the boldness to act with conviction, and the humility to realize that what is apparent may not be all that is there. ------------------------------------------------------------------------------------------------
About The Author:
Linda Wainman is author of the "Keeping It Simple Day Trading System"
The system that teaches you how to make money with day trading. Visit http://day-online-trading.com
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