Category: Tips / Psychology / General

Do you know under which market conditions / environment / regime your strategy performs at its best and at its worst? Knowing this can be of great benefit to traders.

When in doubt, stay out!… If you’ve been trading for a while, you probably have heard that saying. It took me a long time to realise that when I have doubts before entering a trade it is much better to rather not enter it.

We’re all bound to make mistakes as traders. And making them is okay as long as we learn from it and try our best not to repeat them. Repeating trading mistakes often mean that you’re careless or that you’re not serious about your trading. 

If you are one of those traders that think psychology is the most important aspect when it comes to being a successful trader, I would say you are right. But, I feel that many traders jump too quickly to the conclusion that psychology is the root of all their problems.  

Apart from trading and blogging, I’m also a full time shift worker. And although I normally get done what I plan, I still feel that I can do much better.

We all start trading because of the amounts of money we stand to make. This leads to our imaginations running wild as to all the ways how our lives will improve because of this. So it’s easy to understand why we mainly focus on money when we start trading.

How I Made $2 Million In The Stock Market is a book written by a dancer, Nicolas Darvas about his journey to becoming profitable in the stock market. Even though the book was written a long time ago (1950s), it’s remarkable how we (traders) can still relate to what he went through. In the following paragraphs I will be quoting from the book.

Making trading mistakes is not uncommon. This is especially true for traders that’s just starting out because there is just so much to deal with in the beginning.

Following is an excerpt from the book “Technical Analysis of Stock Trends” written by Robert D. Edwards and John Magee:

Trading breakthroughs can come at any time. More often than not they are the result of positive actions that’s taken consistently through all the ups and downs (especially the downs) that comes with trading.