Trading Is Not Rocket Science!

Despite what some people may lead you to believe; day trading, swing trading and trend trading is not anywhere as difficult as they would like you to think. It really boils down to two key components.

First, you have to have an approach that helps you identify trades that have a consistently high probability of making money. Once you have this you must exploit this "edge" over and over again.

The only way to do this is to use the necessary discipline to never deviate from your system. The minute you start tinkering or tweaking things is when you will lose your edge!!!

You will most likely be tempted to do this after you have had a few losers. This is the time however to keep your focus and remind yourself that your system has a statistical advantage that has held up over time.

Think about this for a moment? If you go gambling in Las Vegas and can even gain a 1% advantage over the house you can make a literal fortune by exploiting this edge. That little one percent advantage can make the casino lose a whole lot of money over time. As a matter of fact the minute they notice that you have a viable system they will label you a cheat and ban you from the playing. It sure is a good thing that can't happen to traders!

Now consider what happens if you have a trading strategy that produces trades that go into the money more than 60 to 80% of the time?

Now the second step to success is to manage your emotions. Two of the biggest indicators of a trader who is not managing their emotions are FEAR & GREED. These two emotions will wipe out every trader over time, both experienced and inexperienced alike.

Let's talk about them for a minute...

FEAR: Fear of losing money or fear of being wrong is what causes traders to have this emotion.

"Trading with scared money" often causes the fear of losing money. This is when a trader is risking money that should be used for the rent, food, children's education etc. If this is the case the only solution is to find additional funds that you are willing to put at risk. This helps to put the mind at ease and reduces the fear.

Fear of being wrong is simply the part in all of us that just doesn't like to be wrong. The cure for this is to simply realize and accept that losses are part of this game. Think about this? A baseball player only need hit the ball once for every three times at the plate and this will get him into the Hall of Fame.

I feel this every once in a while and remind myself that... My approach for trading has both historically and real-time produced consistent winning trades. This gives me the confidence to step up to the plate and keep swinging. Also I tell myself that the only way to earn the big money is to get into the game.

GREED: Traders who are greedy are often the exact opposite of the ones who are fearful. They have no fear and this can get them into trouble. They will tend to over trade, not follow the rules and basically "wing it". Sometimes this will work, but it always ends up back-firing.

One of the biggest problems when greed sets in is the inability to know when to take profits. These traders are so bent on making a killing that they are never happy. If they are up 10, 20 or 30% they don't even think about cashing out, as they want more. This often leads to the inability to see the trade turning against then and they will allow winning trades to turn into big losing ones.

One solution for this is to realize that making 3, 5, 10 or 15% on a regular short time basis adds up really quick. I know for me personally, once I was confident in my methodology, I no longer felt the occasional feelings of greed. Now I don't worry about "going for broke" as I know that there is always another good trade waiting for me.

This article is courtesy of Dr. Jeffrey Wilde, a trading veteran with 15 years of experience in all major markets. He is a trading coach to over 1400 traders in 38 countries.

For additional info: http://www.win-at-trading.com

---

The Economy Is Not The Stock Market

Several days ago, the Commerce Department reported that May's factory... Read More

Love The Thrill of Risk? Invest in an Annuity!

With the stock market in steep decline, people are looking... Read More

How To Find An Investment Advisor

Do you think you need an Investment Advisor? Hold on... Read More

The Dreaded Direct Question

(Please have a glass of water within reach before reading... Read More

In a Time of Need

As I take my leisurely walk with my dog through... Read More

Investing Online Has Its Rewards: Find Out How To Take Advantage Of Them

Computerized investing. Online investing. Have you taken the next step... Read More

Keeping It Interesting

Some lines from a movie never leave your mind; I... Read More

Investing and Understanding What You Buy

"There is nothing more frightful than ignorance in action!" Johann... Read More

Angels Investors and Their Networks

What is an Angel Investor? An Angel is usually a... Read More

Invest or be Pink Slipped

Firing an employee seems to be easier and easier for... Read More

Before You Start Investing

There maybe several reasons why you to want to invest... Read More

How to Invest Overseas - Intelligently!

In recent months, many advisors have talked a lot about... Read More

Short Term Savings Products

When you invest, it simply means that you are putting... Read More

Annuity Owner Mistakes

Okay, so I can tell you I have sat in... Read More

Investors: Avoid These 5 Common Tax Mistakes

For many investors, and even some tax professionals, sorting through... Read More

Use this Simple Trick its to Buy $100 Bills Direct from your Bank for only $97

Most People just don't understand the power of using their... Read More

What Age Should I Start Saving For Retirement?

Ask this question to 100 people and you will receive... Read More

July 2005: Hurricane Forecasts for Weather Traders

Tropical Storm Arlene formed as a tropical depression on June... Read More

Better Investing Made Easy

If there were one piece of advice that an investor... Read More

Online Trading Options Strategies - Rolling

Rolling is defined in options online trading as moving a... Read More

Asset Allocation Lessons: The 70% Inflation Solution

For investors only... and for speculators who need to invest... Read More

5 Things To Know About The Stock Market

50% Of U.S. Households Invest In The Stock Market Individuals... Read More

Trading Commodity Futures Using Support and Resistance - Paper Trading

Setting Up a Paper Trading AccountQuestion: I cannot trade with... Read More

Invest To Make Money, Not To Get Rich

The technology boom of the '90s romanticized the "rags-to-riches" ideal... Read More

Useful Tips on Investing

Here are some useful tips on investing. When you make... Read More

Investigate Before You Invest

"Through wisdom is a house built. And by understanding it... Read More

Investing Psychology Today Requires All Traders to Awaken Their Speculator Minds

Stock trading strategies are as rampant today, as they were... Read More

Find Your Investing Soulmate on the Jersey Turnpike

As a followup to a previous column, "Irreconcilable Differences," I... Read More

Tyranosaurus Rex

Everyone knows T Rex was the most fearsome of all... Read More

Options Made Easy and Investor Education - Simple Enough for a 10 yr Old Kid

How many of you out there think that the market... Read More

Guru Focused: Robert Olstein?s Short Sells

While it is rather rare that value gurus sell stocks... Read More

Forex Trading Best Practices

FOREX, the term for the FOReign EXchange market, is an... Read More

Sell Discipline for Investors: Importance and Execution

Investors usually don't have an aversion to buying an asset.... Read More