Hi Trader,

I want to spend some time going over the mental and emotional aspect of trading. Just as money management is an essential factor in trading successfully so is managing your mental outlook and emotions.

For example, in the classic trading book, Market Wizards by Jack Schwager, there is an interview with one of the greatest traders in the world named Ed Seykota. Seykota is considered a kind of ?Zen master? of trading in that he recognizes what a crucial role trading psychology can play in the success of a trader.

He tells a story of another trader that he observed that would start with $10,000 and within 3 months or so he would run it up to $250,000. Soon after he would blow up his account through a series of really dumb trades.

Ed would observe him doing this over and over again so after a number of times, Ed would give the guy $10,000 under the condition that Ed could copy his trades. When the guy would run the $10,000 up to $250,000 Ed would stop copying his trades and watch the guy self-destruct and blow out his account again.

This trader obviously suffered from self-sabotage at a certain point because his self-image couldn?t accept his new wealth and had to quickly give back his profits. Ed also observed that whenever this trader lost all his money his family would immediately come together to console him and Ed came to the conclusion that the trader didn?t really want the money but to be the center of his family?s attention.

In the next few newsletters lets explore some the hang-ups that one can bring to their trading that can hinder their results and explore ways to improve.

Good Trading,

Billy W. www.stockoptionsystem.com

3828 West Davis Ste. 308-108 Conroe, TX 77304