- Probability is the mathematical center of wise risk. Successful traders risk to win. For the risk taker, this uncertainty between small loss or large profit is where the fun is.
- If you tend to over trade or over risk, you need to pull in your frame of safety. You need to establish trading guidelines that will protect you. You need to be alert to your propensity to over risk and step back every time you catch yourself over extending.
- If you tend to avoid risk, you need to expand your frame of safety. You need to slowly add risk to your trading so that you become emotionally inoculated. Decrease your trading size and / or change to a trading vehicle that is less volatile. When this is comfortable, slowly increase size and volatility.
- When good things happens to an optimist, he says it’s permanent, pervasive, and personal. When a bad thing happens to an optimist, she says it’s temporary, specific, and not personal.
- Because the optimistic trader looks with bright enthusiasm towards the future, she is able to be realistic about what has happened in the past and is happening in the present. A pessimistic trader who has limiting doubts about his future trading, may be unwilling to admit what has happened or is actually occurring.