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Trading Decision-Making Process

There is a huge difference between a wish and a decision. A wish is a negative and puts the trader in a frozen state waiting for something to happen (generally associated with trying to get even on losing trades). That is negatively charged energy. Decisions, on the other hand, are positively charged energy. It makes the trader take action. Taking action is taking responsibility. You alone are responsible for your current mental state or condition. Decisions can be both good and bad of course. The sooner the trader realized the bad decision, the sooner they can act to correct it.

The first step in the decision-making process is to realize that what you are doing is not working. Remember that falling down is a positive motions is you bounce right back. Make a list of the positive and negative things that will happen when you take action on the decision.

Don’t expect instant gratification if you make the decision. Decision-making is a process that begins with the first step but these steps are the foundation for a stronger behavioral structure. This structure will give you the confidence in your trading. Confidence plays a key role in successful trading. Having the confidence necessary for successful trading can help the trader in difficult trading environments. Whereas one trader lacking confidence and good decision-making skills may be frozen and unable to act, the trader who has taken the time to build this foundation will be prepared to take the appropriate actions.

Many times specific decisions a trader makes will not yield profits, they will result in a loss, but more importantly, it will position the trader to be able to recognize and act on the next opportunity. Practicing and applying this process will pay dividends throughout your lifetime.

5 Trading Pitfalls and how to Solve Them


Pitfalls
1. Focusing on the P & L

2. Losing objectivity while in a trade

3. Becoming emotional about a trade

4. Lacking confidence: exiting early, failing to put a trade on, not sizing up

5. Difficulty adapting to a changing market

Solutions
1. Quantify success base on the caliber of the trade (i.e. high quality entries/exits).

2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?”

3. While you are in a trade, ask yourself, if I had no position on right now, what would I do? Buy? Sell Short? Do nothing? Then re-evaluate your trade size and direction.

4. Confidence should always come from within. Step#1: Write bullet list of data points proving WHY you are a skilled trader. Step #2: Prime yourself each morning by reading it over to yourself. Could be the most valuable 30 seconds you spend each day.

5. Flip your perspective by keeping track of what is not working (by default this tells you what IS working).

Keep your eye on the ball and your head in the game!

Trading Decision

There is a huge difference between a wish and a decision. A wish is a negative and puts the trader in a frozen state waiting for something to happen (generally associated with trying to get even on losing trades). That is negatively charged energy. Decisions, on the other hand, are positively charged energy. It makes the trader take action. Taking action is taking responsibility. You alone are responsible for your current mental state or condition. Decisions can be both good and bad of course. The sooner the trader realized the bad decision, the sooner they can act to correct it.

The first step in the decision-making process is to realize that what you are doing is not working. Remember that falling down is a positive motions is you bounce right back. Make a list of the positive and negative things that will happen when you take action on the decision.

Don’t expect instant gratification if you make the decision. Decision-making is a process that begins with the first step but these steps are the foundation for a stronger behavioral structure. This structure will give you the confidence in your trading. Confidence plays a key role in successful trading. Having the confidence necessary for successful trading can help the trader in difficult trading environments. Whereas one trader lacking confidence and good decision-making skills may be frozen and unable to act, the trader who has taken the time to build this foundation will be prepared to take the appropriate actions.

5 Trading Pitfalls And Solution

pitfallThe following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.

Pitfalls

  1. 1. Focusing on the P & L
  2. 2. Losing objectivity while in a trade
  3. 3. Becoming emotional about a trade
  4. 4. Lacking confidence: exiting early, failing to put a trade on, not sizing up
  5. Difficulty adapting to a changing market (more…)

5 Trading Pitfalls and how to Solve Them

 I have observed that Losing money doing the right thing does not destroy a traders’ mental focus. It is when they lose money doing the wrong thing…That is what truly eats at their soul and messes with their head.

With that said, the following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.

Pitfalls
1. Focusing on the P & L

2. Losing objectivity while in a trade

3. Becoming emotional about a trade

4. Lacking confidence: exiting early, failing to put a trade on, not sizing up

5. Difficulty adapting to a changing market

Solutions
1. Quantify success base on the caliber of the trade (i.e. high quality entries/exits).

2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?”

3. While you are in a trade, ask yourself, if I had no position on right now, what would I do? Buy? Sell Short? Do nothing? Then re-evaluate your trade size and direction.

4. Confidence should always come from within. Step#1: Write bullet list of data points proving WHY you are a skilled trader. Step #2: Prime yourself each morning by reading it over to yourself. Could be the most valuable 30 seconds you spend each day.

5. Flip your perspective by keeping track of what is not working (by default this tells you what IS working).

5 Trading Pitfalls And How To Solve Them

pitfall-The following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.
Pitfalls

  1. Focusing on the P & L
  2. Losing objectivity while in a trade
  3. Becoming emotional about a trade
  4. Lacking confidence: exiting early, failing to put a trade on, not sizing up
  5. Difficulty adapting to a changing market

Solutions

  1. 1.Quantify success base on the caliber of the trade (i.e. high quality entries/exits).
  2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?” (more…)