Someone who is an active trader 20-plus years, I have had the opportunity to observe something much more than your average investor.
For example, is one of the things you've noticed that many unusual merchants coming from a gambling background and horse betting particularly. in fact, many years ago I worked on a piece of the breed and placed a few bets himself.
Why betters horse often gravitate to trading?
I think it is because there are certain aspects of the negotiations is more predictable than horse betting. A stock or an option or a pair of currency cannot break a leg or unexpectedly fall ill.
Plus, very few children playing the horses live full-time in this but there are many, many traders who are already enjoying a healthy partial income-or even live full-time-by negotiation.
I believe this happens because your chances of winning as a trader is much better than your chances of winning best as a horse.
Unfortunately, many ex-gamblers hold in bad thought patterns, what I call "the gambler mentality." this is the mindset that you can roll the dice, or purchase a lottery ticket, or pick a trifecta and win a fortune.
This type of get-rich-quick thinking is hard to shake and maintains many traders from reaching their full potential.
The risk of Gambling psychology in Trading
If your trade as a gambler, you're bound to lose money.Will make your ugly distribution will throw good. money after bad. And finally, you'll find yourself wondering where did all your money.
(Hint: Wall Street took you for a ride!)
Fortunately, there are some simple mindset shifts that can turn your trading around, sometimes overnight.
Don't Chase mindset Shift # 1: trade-let us Come to you
Gambling produces some strange responses in humans. If a gambler WINS once again, it is possible to keep gambling until it wins again ...even if it loses a small fortune in the process. And if you lose, you're likely to keep gambling in an attempt to "win back" what lost-even if he is still missed.
These behaviors are not unique cones. traders are guilty of doing the same exact thing. If you win a trade, trying to force another winning trade-even though the second trade is doomed. And if we lose a commercial, I try to make getting back what we lost the next trade.
This irrational behavior is caused largely by our cultural conditioning. we are all hard-wired to work 40 hours a week; If any less work, we feel somehow that we do not deserve the money you make.We believe that we should "work hard" to earn a living.
This belief often walked in negotiation, and so "we work hard to negotiate." Plazas business even when there aren't any good distribution available.We trade for negotiation of God.Then, when our poorly placed distribution movement against us that fear losing gambler fills ...and we make decisions even more foolish virgins who joins our losses.
You do not need a genius to see where will lead this behavior.So, here's a hint: If you understand what makes a good trade as opposed to a bad trade, let the good distribution come to you.
One of the best ways to accomplish this is to monitor only a handful of stocks, options or pairs of currency and to familiarize yourself with them.Over time, you will be able to understand better the movements in prices and you'll be able to more easily find good distribution.
You don't have to trade every day or even every week to make a very good life as a trader.You only have to do some good jobs, when the opportunities present themselves.When negotiating, patience is a virtue.
Culture Shift # 2: establishment of a "Win Small" approach to Trading
Gamblers-enabled-traders seeking often "hit the jackpot."Want to place a trade and be set for life.
But it doesn't work this way Often receives tens of occupations., even hundreds, build really kind of fate will envy your neighbors.
With this in mind, it is much better to aim for small consistent wins small consistent WINS is much more realistic.And more over time, small WINS might add up to real time frame numbers.
The best part is that while focusing small consistent WINS, you'll be sure to experience some big wins as a natural byproduct of your strategy "small victory".
Culture Shift # 3: don't have to win every trade
The last mindset shift-and probably the most difficult of all-it is important to understand that you don't have to win every single trade can make good money as a trader. in fact, is to be expected and planned for losses.
The best fund managers, the best dealers and the best trading software all have this in common: sometimes lose money.
Ultimately, it is how you react to a loss of money dictates whether it will accomplish during long-distance. stick to your stops? your money management rules do you follow?
You see, is not how you do on a single trade that counts is how well you over a series of distribution; if you win 6 or 7 Professional outside every 10, I could do very well.
Additionally, if you do a good job of limiting losses (in conjunction with a solid exit strategy), then it may even be able to come forward if you win only half the time (five winning five losing trades, professions).
However, I understand that emotions can still run rampant in spite of your best efforts to combat them; So, after receipt of the losing trade, you might want to take a break for a day or two so you don't make any more bad distribution in the depths of frustration.
Change your thinking, change your account transactions
It is true, your trading account reflects what is happening with the gray matter between your ears. until the next time you start wondering why you've visited on a series of losing, or because your merchant account, receive a shrinking time self-reflect.
Then remember to:
Waiting for good jobs
designed for small consistent WINS
To integrate with loss of jobs (if you can limit your losses)
These small "mindset shifts will help prevent you from trading like a gambler and your negotiation as a real business person instead; not to mention that will help you increase your merchant account consistently over time.
About the author: Les Schwartz is a veteran trade 20 years and the creator of DecisionBar Trading Software uses proprietary algorithms. DecisionBar to zero for perfect trading opportunities in real time and remove the guesswork involved in picking winning distribution. to learn more go to: http://www.decisionbar.com/
Article source: http://ezinearticles.com/?expert=les_schwartz
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