Fear: fearful of profit and one acts too soon.
Hope: hope for a change in the forces against one.
Lack of confidence in ones own judgment.
Never cease to do your own thinking.
A man must not swear eternal allegiance to either the bear or bull side.
The individual fails to stick to facts!
People believe what it pleases them to believe.
Archives of “lack of confidence” tag
rssTrading Lessons
- Don’t sacrifice your position for fluctuations.
- Don’t expect the market to end in a blaze of glory. Look out for warnings.
- Don’t expect the tape to be a lecturer. It’s enough to see that something is wrong.
- Never try to sell at the top. It isn’t wise. Sell after a reaction if there is no rally.
- Don’t imagine that a market that has once sold at 150 must be cheap at 130.
- Don’t buck the market trend.
- Don’t look for the breaks. Look out for warnings.
- Don’t try to make an average from a losing game.
- Never keep goods that show a loss, and sell those that show a profit. Get out with the least loss, and sit tight for greater profits.
- Fear: fearful of profit and one acts too soon.
- Hope: hope for a change in the forces against one.
- Lack of confidence in ones own judgment.
- Never cease to do your own thinking.
- A man must not swear eternal allegiance to either the bear or bull side.
- The individual fails to stick to facts!
- People believe what it pleases them to believe.
Ten Common Reasons Traders Lose Discipline And How To Avoid Them.
There is very little that is new in the world of trading psychology but mastering the basics and mastering our mind is essential if we are to develop as highly efficient traders. The following are common discipline issues and suggestions to counteract them. Discipline is needed if you are to succeed as a Forex trader
1. Boredom and a need to trade for the “buzz”
Try to use dead time between trades for things like self improvement training i.e. read a book by your favorite personal development guru or learn to meditate/practice Yoga! Anything that keeps you in the right frame of mind for the job of trading. A positive mindset will have a positive impact on your bottom line over time.
2. Trading when tired.
One of the great things about trading is that we can close for business whenever we want. If you are not in the correct mindset for trading then shut the shop! There will be no customers banging on the door shouting for you to open up.
3. Not taking a loss well and revenge trading (more…)
Acting On Impulse
Why do so many traders abandon their trading plan? Is it their personality, an inherent pitfall of the trading profession, or temporary insanity? A host of factors may contribute to a lack of discipline. Depending on your personality, background, training, and experience with the markets, you may have trouble reigning in your tendency to act on impulse.
For some people, impulsivity is in their nature. They have trouble focusing their attention. They are easily bored. Seeking out quick thrills relieves the tedium of life. For others, impulsivity is related to emotionality. Some people have so much trouble controlling their emotions that they react impulsively out of frustration. Minor setbacks are inevitable in the trading arena. When the extremely emotional trader encounters one of these setbacks, he or she becomes overly agitated, and may close a position early, or in a fit of confusion, make a major trading blunder that can only be remedied by closing the position.
That said, any trader can act impulsively at times. There are many situational factors that contribute to impulsivity. Research has shown, for example, that when people are tired, they have difficulty focusing their attention. As much as part of your conscious mind cares about sticking with your trading plan, your unconscious mind thinks, “Who cares? I want to take a break.” Psychological resources are limited. When you push yourself to the limits, you will have trouble focusing on your ongoing experience, concentrating on your trading plan, and sticking to it. (more…)
5 Signs You’ve Matured as a Trader
1) Are Self Reliant: When you stop asking other people: “What do you think of the market?” While I respect the opinions of my colleagues, I DO NOT rely on them. I prefer to do my own homework, research and analysis. I LET THE MARKET tell me if I’m right or wrong.
The ultimate goal for traders is to make confident decisions on your own and trade with complete independence. You should not have to rely on the opinions of others because you should have conviction in your OWN ideas.
2) Stop Celebrating Winners: When you stop feeling the need to pound your chest every time you make 30 cents on a stock. (It is the flip side of not getting depressed over every loss). Recognize what you did correctly and move on to the next trade.
The great Pittsburgh Steelers coach Chuck Noll used to say, after you score a touchdown there’s no need to start dancing. Simply hand the ball to the referee, head back to the bench and “Act like you’ve been there before!”
Same thing goes for the stock market. Don’t act like you’ve never had success trading before.
3) Let the Trades Come to You: When you stop feeling the need to trade every day and you get over the “fear of missing out.” This is the downfall of most traders.
It took me a while to shift my focus from worrying about “missing out” to playing great defense. Once I did this, I noticed an increase in my confidence level as a trader. Keep in mind, there will ALWAYS be opportunities and it’s okay if you miss a few.
4) Feel No Need to Brag: Those traders who compulsively tell everyone about every winner are over compensating for their insecurities. It is a sign of lack of confidence. When you make a good trade or a good call on the market, and you don’t feel the need to remind everyone — its because that is what is supposed to happen.
The key is to be consistent and to separate your ego from your trading. If you are doing a good job, people will notice.
5) Loss Management: When you learn to cut losses without hesitation. No one likes to lose, but cutting losses is part of the game. I have studied the best traders throughout history and they all have the same number one rule: CUT YOUR LOSSES! Learn to accept when you are wrong and move on!
Confidence in Trading: The Approach
Have you ever seen a gorgeous goddess? A woman so magnificent you just are beeming energy inside to go talk to her? But as you walk over you start to notice how you’re walking, what facial gestures you’re making, where your hands are, confidence fading… You’re becoming self-conscious and that wonderful feeling of excitement has now turned into fear. Do you remember the last time you talked to a woman in this energy? In this self-conscious / fear mentality? Didn’t go so well did it? Why is a stock any different?
It’s all about the approach and mental confidence prior to the trade. When you approach an event with fear that energy gets transferred into it. I’ve talked about how The Energy of Fear is Consumption in this prior post. So if you’re feeling nervous before a trade take note of this. Where is this fear coming from? Is it related to money? Lack of confidence in yourself? Lack of self worth? It could be a million different things but you need to find and focus on the one that resonates with you. I’m currently working on a meditation that will assist you through the process of finding this fear and making it your ally.
Remember the emotion will come during the “approach.” Keep track of how you feel, as this will set the course of how the rest of your interaction with the trade will go. Keep in mind that magnificent woman: Do you approach her as nervous, not confident, and fearful of reject or strong, confident and full of love?
Reasons why traders lose money
Over trading- Lack of knowledge & lack of experience
- Trading without a plan
- Not having enough capital
- Over confidence
- Lack of confidence
- Emotional trading
- Afraid to lose money
- Trading with complex system
- Relying on others
- Not willing to take it as a business
- No giving enough time to be a trader
- Trying to be successful overnight
- Running Losses
OVERCONFIDENCE
It is common for traders to complain of a lack of confidence in their trading, but very often it is overconfidence that does them in. Overconfidence results from a lack of appreciation of the complexity of markets and an underestimation of the challenges of trading them successfully. In a sense, overconfident traders lack respect for the markets. They think that reading about a few setups or buying the newest software will prepare them to make money. Overconfident traders don’t want to work their way up the trading ladder: they resist the idea that screen time is the best teacher. They also chafe at the idea of growing their account. Rather than start with one contract and wait until they’re profitable before trading larger size, they want big positions—and profits—right away. Because they’re so eager to make money—and so sure they can make it—overconfident traders generally trade impulsively. They won’t wait for the setup to form; they’ll jump the gun—and get whipsawed in the process. Instead of being patient and waiting for short-term patterns to align with longer-term patterns, they will take every trade, enriching their brokers in the process. (more…)
Amos Hostetter-Trading Wisdom
Amos Hostetter: Trading Dont’s
- Don’t sacrifice your position for fluctuations.
- Don’t expect the market to end in a blaze of glory. Look out for warnings.
- Don’t expect the tape to be a lecturer. It’s enough to see that something is wrong.
- Never try to sell at the top. It isn’t wise. Sell after a reaction if there is no rally.
- Don’t imagine that a market that has once sold at 150 must be cheap at 130.
- Don’t buck the market trend.
- Don’t look for the breaks. Look out for warnings.
- Don’t try to make an average from a losing game.
- Never keep goods that show a loss, and sell those that show a profit. Get out with the least loss, and sit tight for greater profits.
Amos Hostetter: Dangers in Trading caused by Human Nature
- Fear: fearful of profit and one acts too soon.
- Hope: hope for a change in the forces against one.
- Lack of confidence in ones own judgment.
- Never cease to do your own thinking.
- A man must not swear eternal allegiance to either the bear or bull side.
- The individual fails to stick to facts!
- People believe what it pleases them to believe.
Overconfidence
It is common for traders to complain of a lack of confidence in their trading, but very often it is overconfidence that does them in. Overconfidence results from a lack of appreciation of the complexity of markets and an underestimation of the challenges of trading them successfully. In a sense, overconfident traders lack respect for the markets. They think that reading about a few setups or buying the newest software will prepare them to make money. Overconfident traders don’t want to work their way up the trading ladder: they resist the idea that screen time is the best teacher. They also chafe at the idea of growing their account. Rather than start with one contract and wait until they’re profitable before trading larger size, they want big positions—and profits—right away. Because they’re so eager to make money—and so sure they can make it—overconfident traders generally trade impulsively. They won’t wait for the setup to form; they’ll jump the gun—and get whipsawed in the process. Instead of being patient and waiting for short-term patterns to align with longer-term patterns, they will take every trade, enriching their brokers in the process. (more…)