Archives of “many different types” tag

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Control in Trading

  
  Education
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New traders may get lucky for awhile and bad traders may win big in the short term but in the long term the market gives every trader exactly what they have earned. While traders can win in the long term with many different types of robust trading methods a trader with no self control will not even survive long, they will not be able to make a plan and follow it, they will let fear and greed over take their mind and end up with large losses and the belief  “trading is just too hard” but trading is not hard what is hard is self control, discipline, focus, and keeping the ego in check.

What a trader can control:

  1. Their entry.
  2. Their exit.
  3. Their trading plan.
  4. Their emotions.
  5. Their ego.
  6. Their method.
  7. Their position size.
  8. Whether to trade or not to trade.
  9. How much you are willing to risk per trade.
  10. Themselves.

What a trader can not control.

  1. Market movements.
  2. Volatility.
  3. The trend.
  4. Whip saws.
  5. Political decisions.
  6. News Headlines.
  7. Macro economics.
  8. Every other traders decisions.
  9. The future.
  10. The past.

One  key to trading is to only focus on what you can control, do not worry and stress about what you can not control, and most importantly, be able to know the difference.

Emotions & Trading

  
  Education
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he hardest thing about trading is not the math, the method, or the stock picking. It is dealing with the emotions that arise with trading itself. From the stress of actually entering a trade, to the fear of losing the paper profits that you are holding in a winning trade,  there are many different types of stress. How you deal with those emotions will determine your success more than any one thing.

Here are some examples of emotional equations to better understand why you feel certain emotions strongly in your trading:

Losing Money and failing to learn to Trade Better results in Despair. 

Do not despair look at your losses as part of doing business and as paying tuition fees to the markets. If you are getting better at trading do not despair even if you are losing money.

When Expectations clash with Reality it causes Disappointment.

Enter trading with realistic expectations. You can realistically expect 20%-35% annual returns on capital with great trading. More than that is possible but unlikely. (more…)

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