Cash Risk Trade Management & Trading Emotions
Trading thoughts play an essential role in the success or failure of traders. Thoughts affect our results and will prove the big difference between successful and not successful trading. fusionex
Are you one of the regular traders?
You have no trading plan or view.
You may have no money management rules
You may have no risk management guidelines or use a Prevent Loss
Your prone to emotional swings (price moves up – happy, price goes down – you are sad)
You are worried almost all of the time when in a control
You quickly “give back” to the industry your recent gains
You try to recoup losses immediately (revenge trading)
You are adhered to the computer display all day watching every price movement like a hawk
You never review your trade leads to follow up on winning trades and losers.
Here is a fairly easy one: You are losing MONEY!
I would like to speak to you about what a normal trader is. Regrettably many of men and women fall into this ‘average trader’ category. Basically, they seem to be to feel that trading is not hard and for whatever reason they buy a stock, the stock’s immediately going to go in their favour. Heaven forbid they actually are successful, because now that reinforces that habit going forward and it really creates for a major disaster. Should you be an average trader, you have zero trading plan or view of trading. It’s that simple. Most people treat this as a hobby and they have no trading plan to speak of. They have hardly any money risk management guidelines. For anyone who is sitting here reading this in addition to no money risk management rules whatsoever, don’t be anxious. You’re section of the average investor that is offered.
Are you prone to emotional shots? So, price goes up, you’re immediately happy; if price goes down, you aren’t trying to jump out of a window. These types of emotional shots are typical with average traders. Are you stressed almost all of the time when you’re in a control? Can you sleep during the night? Average traders don’t have confidence in their system or their plan so they may be fairly nervous whenever they’re in a trade. You quickly give back to industry your recent gains.
Inform me if this appears familiar: Is made $500 on a winning trade. You feel great. And then on the very next trade you get arrogant and wrap up losing $700 and give back all those gains that you just made to industry and more. This is very common. Keep in mind that suggest you’re a failure. It really means that you’re an average trader.
You try to recoup losses immediately, also known as retribution trading. Basically, here is how it occurs… You take a modest damage on a trade, a few say $1, 000. Today, you feel you are on a mission. You immediately go out buying trade which means you can make up for that $1, 000. 00 loss. You wrap up chasing a bad entry or for whatever reason you conclude forcing the pace and get into a wrong reveal and also you wrap up losing even more. Does this circumstance sound familiar?
You’re adhered to your personal computer screen all day long watching every price movement like a hawk. This goes hands in hand with your emotional swings. It is going up, you’re happy; it goes down you’re ready to beat your brain on the keyboard. If you are stuck all day seeing prices and you’re constantly with an emotional roller coaster? Don’t worry. You’re not alone.