Do You Have Firm Control on Emotional Factors Which Effect Your Trading?
Jan0
Most traders suffer from the mistaken notion that if your learn a good day trading system you will make big money day trading. Of course, nothing could be farther from the truth. One of the few topics that most day traders are reluctant to talk about is market psychology and trading psychology. Yet, when I sit down and trade with a new day trader, I can usually ascertain the emotional issues he will encounter after the first hour.
Some day traders believe that good traders have some sort of intuition into the functioning of the futures market. Here is the rub, when you are trading; your ability to control your emotions while you trade will, in large part, determine your success. Can you simply turn your emotions off and continue to trade on just the facts?
The overwhelming response I receive when this question is posed is “of course I can!” Most day traders do not want to see themselves as weak or deficient, yet when they trade these deficiencies are nearly always present. Your emotions betray you when you trade, and the secret to trading is to have firm control over how you think at the emotional level. It is easier said than done, too. While confidence in trading is important, over confidence is an account-buster. The markets will humble you before you get a handle on what went wrong. Taking a respectful approach to the markets and the risks involved in trading will service you far better. I tell myself several times a day “the market is right, you are wrong.”
When I trade, my goal is to trade what I see on the chart. I don’t trade the news, I don’t trade on rumors. I don’t trade the economy. No, I have a specific methodology for trading the chart on the screen and it does not include outside influences. I am not interested in what market pundits have to say about trading on a given day. For many traders, that is a tough pill to swallow.
Here are some of the measures I use to control my exposure to emotional roadblocks.
1. I don’t watch television when I trade. Most of the networks have an agenda in their announcing style that is not objective. Some networks are eternal optimists in the face of contrary facts, and other networks are overly pessimistic in the outlook. I depend on my own analytical skills in reading charts and arriving at my conclusions.
2. I generally play classical music when I trade, as I find this music emotion neutral. Some rock n roll affects me at the emotional level, which is to say the music is psychologically stimulating and I have found I am too aggressive in my trading. As you can see, I have thought some about this issue.
3. I never look at a chat room in my trading, and usually don’t frequent chat rooms at all. Why? Most chat room posters are doomsday types. The sky is not falling, and I am not chicken little, and I do not want my trading influenced by spurious information.
4. I sometimes listen to a radio station when I trade, but it is usually a talk sports station and nothing more than banter. This does not seem to effect my trading unless they talk about the Chicago Cubs, then I am usually irritated and turn the radio off. (yes, I am a long suffering Cubs fan)
So outside influences can, in fact, be an issue; but there are even tougher influences to conquer, and that is the psychological point of view within yourself.
Your own outlook on the world can influence your judgment, regardless of the outside influences to which you expose yourself. Emotional considerations like greed can cause you to trade recklessly and outside the parameters of your trading system. Greed? Yes, there have been several books written in the last 2 years that compare the hormone levels after a very successful trade to pre-trade hormone levels, and found your body’s physiological response was to release large amounts of endorphin, resulting in temporary euphoria. (See “It’s Not What You Think, It’s How You Think,” Larry Pesavento, author) Temporary euphoria is not a good state to trade, and may result in terrible losses.
In summary, there is good evidence to suggest that your state of emotions is the determining factor in day trading success. Anecdotal and scientific research has brought this consideration to the forefront in recent years. It is important to realize the detrimental effect your emotions can have upon your trading and take action to minimize outside influences, especially those involving greed, euphoria and overconfidence. And finally, trading psychology is one of the least understood facets of trading and will likely stay that way, because of traders aversion to talking about their feelings in the trading environment.
I know for me it’s simple; anytime I think I know what the market is going to do, I need to remind myself…I don’t know what the market is going to do, and I need to simply trade the chart in front of me without bias. It’s easier said than done.
I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain. Article Source:http://www.articlesbase.com/day-trading-articles/do-you-have-firm-control-on-emotional-factors-which-effect-your-trading-1724930.html
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Foreign Exchange Trading: What You Need to Succeed
Oct0
Foreign exchange trading requires particular things if you’re intending to do it successfully. One of these things is you need to take it seriously. It’s no good going into forex trading if you treat it like a game. You may never make any money, in reality you may lose the game. The way to win is to treat it more like a business.
This indicates that you want a plan. Not a business plan, though it may have a couple of things in common with that, but a trading plan. The trading plan comes in many versions, such as Correlation Code, but for all of the approaches, it is vital, as we said before, that you treat it seriously. It is a plan for your success and if you dip in and out of it, applying it only when it suits you and relying on intuition the rest of the time, you cannot hope to make money or maybe learn anything helpful from the experience.
Long-term foreign exchange trading plan
When you concentrate on your long-term goals for your currency trading, it is actually better not to think in terms of cash. You may be hoping to double your money in half a year or whatever, but in fact it is not so crucial how much cash you make. All that matters on the money front is that you make profit instead of loss. Even if it is $10 profit, you must be satisfied with that.
The reason being because having express fiscal goals it’ll just put you under even more pressure than you are already under when you are trading. You start to think, “I need to make $x this week to hit my target,” and then you begin to get into all sorts of trades that you should have left alone. Infrequently the conditions are simply too unsettled and they can stay that way for several days. You don’t need to be feeling that you’ve got to trade simply to make your $x.
Instead, target what you want to learn or master and express your goals in that way. For instance, developing new systems based on different indicators, even if you only use them in demo accounts. This can add a breadth to your trading and should be useful if you happen upon something that works. Or keep records of how many times you deviated from your system and have a goal of getting this down to nil.
Forex Trading Plan For Trades
Your actual day by day trading plan is more about your position size, stop losses, close point for a successful trade, for example. In this example you do have a profit target, voiced vis the number of pips you’ll take if the trade is profit-making. It isn’t a good idea to let trades drift, hoping for unlimited profits. Some folks do only close out half their position at a certain point, it’s correct, but if you are going to do that it should be a written part of your scheme, not a snap decision.
Do not carry your planned method in your head where you can easily get tempted to change it. Jot it down along with the rules of your trade in terms of the signals that you will act on. That way everything is clear and you can dump some of the stress onto the paper. Foreign exchange trading is a difficult as well as a dangerous business, and having a well thought plan is essential to the success of your business.
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Forex AutoMoney 3 Signal System
Aug0
For starters, how do we define Forex Automoney system?
The Forex AutoMoney system gives you signals as to when you should buy or sell various Forex products and currencies. You’ll be told to enter or exit the market by signals, which will also inform you of where to place your Take Profit and Stop Loss boundaries.
Forex AutoMoney offers you 3 categories of signals to choose from – Weekly; daily which provides a signal a day and Intraday where within the course of a day you will get 6 signals.
Just login, receive the signals, and make the trade at the proper time. It won’t take up much of your time.
Let us study how Forex Auto money really works.
I have to make a confession. I did believe that I was successful overall with my trading practices. I tried to be consistent and remain level-headed, and that does usually result in accomplishment. I considered myself to be an expert in stock trading, and didn’t see how I could improve.
To be frank, Forex Auto money has made all online Forex traders look like idiots. The key to maintain success in the forex market is to not over analyze things. Most people aren’t capable of mastering the consistent trades that are crucial to forex trading success and a robot won’t buy into the fear or greed to do so.
In addition, your emotional state can have a huge effect on your trades. It’s not very smart to depend on intuition or “go with your gut,” as they say, when your are trading the Forex markets, since that’s essentially gambling.
Most traders rely on things like their instincts and feelings, Forex markets remove such things from their traders. Forex AutoMoney removes the doubt from your forex trading, making it purely a matter of mechanics.
Here’s a detailed description of what goes into the ForexAutoMoney Program. Essentially you’re being shown how to initiate the ‘46,205 a month’ model and the software that will automate most of it.
Click This Link To Be Directed To The Official Forex AutoMoney Website.
Since giving Forex Auto Money a shot, I have come across some resounding personal proof as to its efficacy. After I transferred $500 to my broker account, I was able to start trading by following Forex Auto Money signals everyday, using only a single currency pair.
Only three weeks passed and I received a surprise. By using the Forex Auto Money system and only 10 minutes per day doing my trading I was able to generate a 340% return from just one currency pair I traded. This meant a $1718 profit on my $500 invested.
Had I invested $50,000, I would’ve made a profit of $171,814 – that’ $5727 a day. It’s totally possible to earn hundreds or even many thousands per day when you let this system work for you.
Forex AutoMoney lays stress on trying a single direct strategy, repeatedly. It’s a proven method of making money, and it works. With just $500 to start, I was able to make $26,852 by the end of the year in 2008.
This concludes my review of Forex AutoMoney. To be brief, this is one of the best and most complete forex trading system, I have ever come across.
Underneath the flashy sales page claiming “forex this” and “forex that,” is an amazing, unique, simple, yet very powerful system that will help any day trader make money online, regardless of experience.
Just as soon as I finish writing this review, I’m off to set up another Forex AutoMoney campaign!
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Investing In Gold Bullion
Jul0
Recession often turns our minds to protecting our finances. If you are looking to beat inflation then the simplest solution is buying gold bullion, known to be a winner in just such situations. Even during instances of deflation, you will find that gold bullion is still a wise investment.
Pounce On The Opportunity to buy gold bullion.
Interference in the supply of gold, which often happens at times of economic crisis, is the perfect opportunity to buy gold bullion. Learning about the gold bullion market and how to buy the commodity is a piece of cake if you use the internet.
Unfortunately, the internet is not always a reliable source so don’t believe everything you read. Much of the information that you come across will need to be cross-checked so that you are sure that it is accurate. If you doubt any of the information you read over the internet, your common sense is probably right.
There are instances when using your intuition and nothing else will pay off when buying gold bullion. But this is not always successful and can leave you with a loss so listen to industry sources. Gut feeling is rarely enough to get you through hard economic times.
In countries where inflation is enormous like Zimbabwe, buying gold bullion is still the safest way to invest your money in the long run. Recession and inflation can be overcome through buying gold bullion. Ignore the high price of the commodity and buy as much as you can afford. Its benefits during hard times far outweigh the short term cost.
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