Hello Trader,

The Importance of Trading Psychology

Part 2

In my last segment I spoke a bit about trading discipline. In this segment we will cover some of the factors that influence your trading discipline.

Discipline comes into play when combating fear and greed. Fear is typically based upon a fear of loss. No one really wants to lose money in the market. We’ve all heard the horror stories of people losing money in their trading accounts. Others have lost their entire account. Don’t let this be you!

Fear of loss makes many traders scared. Scared traders become very emotional. In many cases they panic and make irrational, spur-of-the-moment decisions.

Traders who panic under pressure are very typically not profitable traders. Your objective is to be a profitable trader.

Fear in many situations is triggered by not knowing what is going to happen next, basically this may called fear of the unknown.

We feel much more confident when walked down a familiar street in our neighborhood than if we walked down an unfamiliar dark alley in a strange place.

We can eliminate or minimize a great deal of fear by becoming more familiar with exactly what we are to expect. In other words, we need to have a plan, basically a trading roadmap. We need a trading plan so that we can know what we are to do each and every trading day. We also and also what the likely outcomes of those actions may be each and every trading day. In this way, will be met with far fewer surprises, and unknowns, which may trigger fear in us.

You’ll receive Part 3 of Trading Psychology in a few days… Until then…

Good Trading and Good Life!

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