Successful Traders Secrets (Part 1)
August 13, 2012 (AAPLTrader)
When trader’s make a profit, emotional boost usually follows, and that feeling can become associated too closely with a person’s self-image, greed and sense of worth. Thinking too far ahead of what the possibilities are with your profits can put you in a sense of delusion.
Three things happen when a person encounters fear. They either freeze, flee, or fight. Having any of these type of emotions while trading makes life more difficult in general.
Afraid to Trade?
When a trader loses, he/she often plays the blame game on everything and anything around themselves, not being accountable for their own actions. That’s when fear starts to linger and self-confidence is lost. Essentially, what you fear is not the markets, but rather your inability to do what you need to do, when you need to do it, without hesitation.
Find more helpful tips in the AAPLTrader Community room here.
Most traders have bi-polar emotions. One day you are extremely positive about your skill and ability, the next you could be negative and your ego starts to get badly bruised. That’s why it’s important to…
Plan Ahead
Don’t make a trade without writing it down. A successful game plan has three elements: an entry strategy, a get out of trouble strategy, and a winning exit strategy. A successful trader is never born a success, but trained to be one. There is always something new happening in the market, give yourself the time to learn everyday so you can prepare yourself for the future.
The Element-Of-Ruin
A described fact from blackjack players; if you over bet, you will lose your entire bank account, regardless of how skilled or successful you may be. Don’t put all your eggs in one basket. If you’re a beginning trader, try not to use a margin account and only trade 2-3% of your portfolio in any one trade.
“It’s not what you think the market is going to do, but what the markets can do.” Click to tweet this quote.
8 Helpful Tips for Success:
- Keep a record of your trades!
- Be patient.
- Don’t trade because you feel you’re going to miss out.
- When in doubt, get out.
- Stick to your game plan.
- Control your emotions.
- Learn your risk.
- Think of all the possibilities.
You don’t want to be afraid to trade. You want to be okay with possibly losing a trade and moving on to the next one without the fear of losing it all. Find a way to limit your risk and expand your reward. You want to feel good about a trade knowing all the different possibilities. Look back on all your winning & losing trades and dissect each part of each strategy. Stop doing what’s not working and expand on what is and you will become the trader you want to be.
Eric Consiglio – AAPLTrader.com
For further discussion on trader psychology make sure you check out our stock mastermind group which broadcasts live every Wednesday and Sunday here at AAPLTrader.com
PS. Make sure you check out Part One of this Series Successful Traders Secrets (Part II)
what if youve never been up period?
Great article Eric, I like that you outline some helpful tips. I remember when I was first learning to trade and a trade went against me, I would freeze and not know what to do. Having a set game plan to go back to that outlines a plan A, plan B and plan C supports me in making better decisions under pressure.
“When in doubt, get out”
99.99% of the time when I get out, next day or next week that same position is up 50% to 500%…Do this happens to anyone…it make me crazy
This has happened to me more times than I want to say.
I would be a millionaire twice over if I had not made
the moves I had.
Yes but you have to remember a 1% profit is better than a .00001% loss.
I think this quote is more for confidence in trading. Stick to your game plan, be confident in your strategy. If your not confident and you have some fear of the trade, get out. I know this happens to a lot of traders, you get out and the next thing you know, the stock goes in the direction you thought it was going too. Happens to all traders. Most of it is controlling your gut feelings and sticking to the game plan, which is not easy too do at all.
Great advice – NO ONE can time the market, so never feel you are alone in winning or losing. Make and plan and work your plan.
My thoughts… Apple has a run for a short period- perhaps through Spring 13. Apple is now so big they have become a Goliath. While sales will continue to expand, they are ignoring much of their core consumer’s emotions. In fact, they are out of touch when pricing MacBook Pros so far above where the market can tolerate. They now face aging products, higher retail prices, less informed employees and a hugely degrading customer service. At one point, the Apple stores were mobbed with buyers. Now, the consumers are pacing their Apple purchases. I invested in Apple because I was a huge Apple consumer. No longer a huge Apple consumer because of their failing and out of touch opinion of their own self, but long on Apple stock, where I will sell all positions in the Spring, if not sooner. Good Luck!
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