Tag: trading psychologySort
Beginner Stock Trading Mistakes: Risk & Psychology (Jeff Wilson, Trader & Economist)
For many, the process of learning to become a consistently profitable trader can be both long and demanding. I know that for myself, every facet of my emotions were tested and I really saw what "I was made of". I firmly believe that in order to become a trader one must really have full control of their mindset and this carries over to all other dimensions of life in a very positive way.
I was recently asked in an interview what I would say to a trader or investor who is fearful. That is, what would I say to help them overcome their fears and trade without fear.
There are a few different fears that many traders face at one time or another, but for this post I want to focus on one of the main fears many traders have. That is the Fear of Losing Money.
Based on my own experience as well as working with hundreds of traders over the last few years, I have come to the conclusion that there are three major components to making money consistently in the markets. They are:
1) A solid, back-tested Methodology that the trader has confidence will provide an Edge
2) A customized trading Plan that is objective and in alignment with the Edge and the trader FOLLOWS that Plan
3) An Positive, Realistic, and Fearless Mental Approach
You've probably heard talk about "market uncertainty" in the financial news recently. But when are the market trends ever certain? The constant uncertainties contribute to your frustrations as a trader, and you need to have a method for dealing with the ups and downs. Every successful trader has one.
Human psychology is a weird thing. People sabotage their success in many things they do, consciously or subconsciously. Often not even knowing it. Maybe it's the fear of what would come with success. This lesson isn't to explain why. Let the psychologists and psychotherapists do that.