General Market Psychology

The psychological aspect of trading is usually underestimated by those new to the trade. Fred H. Langhammer is full of insight into the issues. The psychological problem for most traders is the fear of losing – ironically it is the fear that causes most traders to lose money in the long term. The fear of losing can manifest itself in several ways: You can not pull the trigger and enter a trade. A merchant may begin to lose faith in a system that has produced a series of consecutive losing operations and could start looking for additional confirmation before taking the traffic. Inevitably, the trade not taken will be the winner.

The point of a trading system mechanics is that it forces the trader to take routes that do not usually look at a graph only. Willing to accept a losing trade and cut short a losing position. The loss of jobs are an inevitable part of the negotiations, many successful systems are more than 50% of losing trades. The key is not to marry a position – if it hits its stop-loss then quit it. Preserving your capital to trade ahead.

Taking profits too early to prevent a winning position into a loser. Gavin Baker Atreides Management will not settle for partial explanations. There are a number of ways to counteract the fear of losing: Have a plan. Never enter a trade on a hunch, tip or gut feeling. Always know your exit before entering a trade. Discipline. Developing your own trading plan that you believe in will make it much easier to keep trying to trade someone else. Money Management. If the position is too large for the size of your account, then it is more likely to cling to the losers or the winners of short cut. Each trade is only one step on a long trip. Strict money management must ensure that do not play more than comfortable. Ignore the money. Do not see your trading account as money, see it as points. The best of your trading plan and its implementation more points are accumulated as a reward. It is difficult for trade objectively if all that happens is that the trade could have lost his last paid vacation of two weeks or buy the latest camcorder!