Two factors: If you overcome them then there is no limit for money in the
Stock market for you.
Fear
We are all humans and one of the greatest emotions that has a huge impact on
our trading is FEAR. The fear of loss, fear of being incorrect, fear of
other's or fear of losing money.
You as a trader, must learn to be neutral at all time. Try not to get upset
when you have a loss, try not to get too happy when you win on a trade. Just
remain neutral. Easier said than done of course.
When you lose you panic, but please we want you to know that losing is part
of the exciting world of trading. Think of it this way, "when a tennis
players hits the ball there is a good chance the ball will not go over the
net !". Think of this when you are trading, you will not always hit a winner
but with the correct stop loss protection you will have another chance of
taking a good trade.
This is what we mean by having a positive psychology. In circumstance when
your emotions take control without a trading system you will most likely
suffer from action paralysis. No action is taken, often resulting in staying
with a losing trade. This can be painful to watch as the price of your stock
goes down and down... and then you start thinking why didn't I get out ??
Let us tell you that the financial market is not for second guessing !
Follow your trading plan to the letter, if you don't you are second guessing
and this will cloud your judgement and most of all you will start getting
into this habit, as a beginner we don't want you to start second guessing !
Please acknowledge that there are only two possible outcomes to any trade -
win or loss.
It is extremely easy for fear to kick in, this happens to all us, this is
why it is crucial that you stick to your plan. Sticking to your initial
plan, will remove fear of taking a good trade, missing out on taking another
good trade just because your previous trade didn't work out !
Be patient my friend when the market does not present you with an
opportunity. There are hundreds of daily opportunities in the market, wait
for right technical set up and don't over trade either.
Remember that you are in control only of the trade, no one is going to tell
you when to get in or when to get out. Don't ask others what to do, they
haven't done the home work !
Always have a positive attitude when you take a trade, and don't expect the
trade to go in the direction you want it to. Just except the outcome of the
trade and stick to your initial plan. Play to win and expect results. When
you have a losing trade always reflect on what you have done and learn from
your experience. Don't go tell everyone remain neutral and be patient until
your next trade.
Greed
We are sure that many of us traders have held a particular stock too long
and sold out breaking even. Sounds familiar? Greed changes our way of
thinking and just like fear we hold on until the market reserves on you.
Remember that when you invest in the market you are making an educated
decision based on your technical analysis. Do not use trading as a form of
gambling. Getting to know yourself is the key to successful trading; there
is lots and lots of money to be made in the markets, but only if you learn
to control your inner emotions.
A rule of thumb to remember "When you run out of trading capital your game
is over!". Don't worry keep on reading as you will teach you where to set
your stop loss and how to maximize profits by taking low risk entries and
gaining high returns.
Regards
Puja Singh
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Blog & Register for free letter http://crnindia.blogspot.com/
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