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

---

Critical Options Investing Tip When Trading Naked Calls and Puts

An option is a derivative trading product that is best... Read More

Asset Allocation: Critical to Your Investment Success

Asset allocation is a critical component of investing success. Both... Read More

Chile Leads the Latin Pack

Everyone's talking about China. Don't miss the opportunities in the... Read More

Top Ten Investment Mistakes

1. Lacking an investment plan a/k/a/ "Don't take a trip... Read More

Poll Names Coin Laundries Best Investment For 2005

According to Morton Pollack, CEO of PWS, The Laundry Company... Read More

It Is Never Too Early To Start A Roth IRA!

The Roth is kind of weird until you get used... Read More

Annuity Investment - The Whole Truth

Do you ever feel like you haven't been told the... Read More

Financial Planners

"Financial planners are like dentists: they may occasionally inflict pain,... Read More

Invest To Make Money, Not To Get Rich

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

Learn How to Lose and Risk Management

One of the leading traders on Chicago Mercantile Exchange, because... Read More

Annuity Investment Guide

While there is not a lack of information on annuities,... Read More

How To Create Wealth In The Stock Market

First and foremost, an opportunistic strategy for creating wealth in... Read More

How to Invest Overseas - Intelligently!

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

A Safe Port For Mutual Funds But Not You!

Soft dollars, a form of legal kickback, is a sly... Read More

The Real Cost of a Bad Habit

What is the value of a good habit? Think of... Read More

IF - The Wonders of Investing

If it seems... Read More

Risk and Reward

If you are doing your own investing in the stock... Read More

Why Do You Want to Become a Online Trader?

Motivational guru Tony Robbins teaches that the reason for doing... Read More

An Introduction to Offshore Investing

Once upon a time, offshore investment strategies were spoken of... Read More

Sell Discipline for Investors: Importance and Execution

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

How Do I Start Investing Online and What Are Some Basic Tips?

If you are new to investing online, don't put your... Read More

Remembering TEOTWAWKI and Learning from It

Its only been about 5 years since we had major... Read More

Invisible Mutual Fund Fees Erode Your Returns!

Many investors think that investing in mutual funds is free.... Read More

Rolling your 401k: Contributory IRA vs. Rollover IRA

In an ideal world you would start your working career... Read More

How To Start Investing For Financial Independence, Part 1

Today, I am going to start a multi-part series about... Read More

Index Trading Weekly Update

Here is a sample of the last newsletter:SP500 Last Signal... Read More

The Convertible Craze Brightens The Future Of Equities

Convertibles are stealing the show with their safe investment image... Read More

The High Price of Oil

In less than four years, the price of oil has... Read More

Asset Allocation Lessons: The 70% Inflation Solution

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

High Volatility Investments

Penny stocks and options are high volatility investments that attract... Read More

Franchise Opportunity Sellers Beware; franchise buyers lie on forms?

It seems completely absurd that franchise buyers lie about their... Read More

Annuity Owner Mistakes

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

My Way Or The Highway: Give Your Financial Professionals A Good Talking To!

All this talk about Investing is encouraging lately. Over the... Read More