Tuesday, August 16, 2016

Psychological strength is a potent weapon for a Trader

Don Hays “ Emotions are your worst enemy in the stock market.”

Last time when you entered a trade, what were you going through? This question is a million dollar question for a trader. The reason behind this question is one and only one and that is psychology. Psychology plays a pivotal role in the total involvement of a trader in his/her trades. Trades can be won or lost on account of wrong psychological management in spite of the fact that the trade initiated was based on strong fundamental and technical support.

Do you feel the ecstasy when the trade is going your way and feel dejected when it is not. The more strength these emotions have in you the more are the chances of the trades not performing well. The targets of trading are to extend the profits and to cut the losses, however a weak psychological support tends to do the opposite.

The most potent tool to handle the psychological situations pertaining to trading highs & lows which I found to be very helpful is the trading journal.

A trader has to be proficient both in psychological and money management. A complimentary approach for the management of money and psychology will be the ultimate winning weapon in stock market trading. A trader who knows the intricacies of mass psychology will surely fare better while taking decisions in tandem with the markets. The psychology of a trader should help him/her to keep the eyes open and make decisions seeing the reality of how the markets will behave and what turns are in the offing.

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Futures trading contains substantial risk and is not suitable for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only consider risk capital that should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. CTFC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS SUCH AS LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All trades, patterns, charts, systems, etc., discussed in this website or advertisement are for illustrative purposes only and not construed as specific advisory recommendations. All ideas and materials presented herein are for information and educational purposes only. No system or trading methodology has ever been developed that can guarantee profits or prevent losses. The testimonials and examples used herein are exceptional results which do not apply to average people and are not intended to represent or guarantee that anyone will achieve the same or similar results. Trades placed on the reliance of Trend Methods systems are taken at your own risk for your own account. This is not an offer to buy or sell futures interests.