Trading Psychology

Hey Gang,

On Nov 6th, I gave a graduate call about trading psychology.  I noticed that I forgot to post the outline we created in that call.  I am posting it below.  If it comes up funky in your browser…try using Mozilla Firefox and it will appear in its proper format.  Feel free to listen to the call from the 6th in order to better understand the outline.

Happy Trades!

Jeff

4 Trading Pitfalls:

 

 

1.      Desire to be Rich Quick

a.       overtrading

b.      force trades

c.       lack money management

 

2.      Fear of Losing

a.       Won’t trade due to fear

b.      One bad trade…they give up.

c.    Positive Mental Attitude

 

3.      Need to be right

a.       Stay in losers too long…

b.      Lack discipline with our trading stops

 

4.      Being Undisciplined:

a.       System Jumpers

b.      Jump on news or trade recommendation without their own hw…

c.       Random

 

 

 

Winning and Losing Streaks!

 

            Winning Streaks: 5-7 profitable trades in a row.

 

1.      Overconfidence

2.      Short cuts on my analysis

3.      Market reversal

 

a.       Cut back on my trades (number/dollar amounts)

b.      Take quicker profits

 

Losing Streaks: 3 unsuccessful trades in row

           

1.      Destroyed confidence

2.      Become tentative

3.      Chase Trades

4.      Build Negative Mental Attitude…go from having fun to having another job.

5.      Make all losses back in one trade.

 

a.       Shut my account down 4-5 days

b.      Ignore the market

c.       When I make my 1^st trade…take quick profit.

d.      Cut my loss very small.

e.       Order Pizza