| To me psychology is the key to trading. Many trades | | | | importance of psychology is that it focuses on reality, |
| on hunches about economic or political trends, while | | | | which is you have to live with your eyes open. To be |
| others use "insider information" or simply hope. Do you | | | | a good trader, you have to invest with your eyes open |
| remember how you felt the last time you placed an | | | | and make neutral decisions. You need to recognize |
| order? Were you anxious to jump in or afraid of losing | | | | real trends and not waste time on regrets or hopes |
| it all? When you closed a trade did you feel humiliated | | | | that the stock will turn around from a downfall. |
| or embarrassed and started to second guess | | | | Trading is similar to sky diving, rock climbing, and street |
| yourself? These feeling evolve among thousands of | | | | racing because they all share a common risk involved. |
| traders which merge ultimately into a huge | | | | These sports involve a considerable amount of risk |
| psychological wave that moves the markets trend. | | | | pleasure. Many participants in these sports ignore the |
| The majority of traders spend most of their free time | | | | risks and take thoughtless chances. A person who |
| looking for good trades. Once they enter a trade they | | | | wants to enjoy the risk and excitement of sports must |
| desired to be in, they start to squirm and lose all self | | | | follow the rules. When he/she reduces the risk of a |
| control over themselves. They ride an emotional train | | | | sport, they get a sense of accomplishment knowing |
| and miss the element of winning - which is the | | | | they have control over that particular sport. This same |
| management of their emotions. Their inability to | | | | criteria involves trading. You can succeed in trading |
| manage their emotions leads to a downfall in their | | | | only if you handle it as a intellectual pursuit to |
| stock trades. | | | | overcome the risks. To help ensure enjoyment |
| All losing amateurs ignore the importance of | | | | success, a good trader must watch his capital funds |
| psychology. If you are not up to date with the market, | | | | as close as a sky diver knows the exact time to |
| or you ignore mass psychology of crowds, then you | | | | release his parachute. |
| have no chance of succeeding in the market. The | | | | |