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主題: Avoid emotional trading

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    初级会员 pattern 的頭像
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    Avoid emotional trading

    Avoid emotional trading
    Trading psychology describes how a trader handles generating gains and handling losses. It represents their ability to deal with risks and not deviate from their trading plan. The emotional aspects of investing will attempt to dictate your every transaction, and your ability to handle your emotions is part of your trading psychology.
    It is impossible to eliminate emotions in trading, but this should not be the goal in the first place. Instead, traders should understand how certain biases or emotions can affect their trading and use this information to their advantage. Every trader is different, and there is no simple rulebook that everyone should follow.
    Identify your personality traits
    Develop and follow a trading plan
    Have patience
    Be adaptive
    Take a break after a loss
    Accept your winnings
    Keep a trading log
    Identify your personality traits
    One of the keys to developing successful trading psychology is identifying your personality traits early on. You will need to be honest with yourself and say if you have impulsive tendencies or if you are prone to acting out of anger or frustration.
    If this is the case, it is important to keep these traits in check while you are actively trading because they can lead you to make rash and ill-advised decisions that have little analytical backing. However, it is also important to play to your personal strengths. For instance, if you are naturally calm and calculated, you can take advantage of these personality traits during your time on the markets.
    Equally as important as identifying and being aware of your personality traits and emotions is recognising your biases, as listed above. Biases are an innate aspect of human nature, but you should be aware of what your individual biases are before opening or closing any trades.
    Develop and follow a trading plan
    Having a trading plan is paramount to ensuring that you achieve your goals. A trading plan acts as the blueprint to your trading, and it should highlight your time commitments, your available trading funds, your risk-reward ratio and a trading strategy that you feel comfortable with.
    gold signals
    For instance, a trading plan could say that you were going to commit one hour every morning and evening to trading, and that you will never commit more than 2% of the total value of your portfolio to any one trade. This can help minimise losses and limit the effect of emotions on your trading as the rules for opening or closing a position are already highlighted for you.
    Trading plans should also take into account individual factors that could affect your trading discipline such as your emotions, biases and personality traits. If you make clear what your biases are before you start trading, you might be less inclined to act on them.
    Have patience
    Patience is integral to discipline and it is crucial that you have patience with your positions. Acting on emotions like fear can lead you to miss out on a profit by closing a position too early. Trust your analysis and remain patient and disciplined. Equally, when looking to enter a trade, it is important to be patient and wait for the opportune moment rather than just jumping into a trade right then and there.
    For instance, if you were wanting to speculate on some GBP currency pairs like EUR/GBP or GBP/USD, you may want to wait until just before a Bank of England (BoE) announcement as there tends to be increased volatility at this time.
    Forex trading Signals

    Be adaptive
    While it is important to have a trading plan, remember that no two days on the markets are the same, and winning streaks don’t exist in trading. With this in mind, you should become comfortable in assessing how the markets are different from day to day and adapt accordingly.
    If there is more volatility on one day compared to the day before and the markets are moving particularly unpredictably, you may decide to put your trading activity on hold until you’re sure you understand what is happening. Being adaptive can help to limit your emotions and rule out representative and status quo biases, enabling you to assess each situation on its own merits – ensuring that you are pragmatic during your time on the markets.
    Take a break after a loss
    Sometimes after a loss, the best thing you can do is walk away from your trading account for a short while to gather your thoughts and compose yourself – rather than rushing into another trade in an attempt to regain some of your losses.
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    The best traders are those that take their losses and use them as learning opportunities. They will typically take a few minutes to themselves before going back to their platform, using this time to assess what went wrong for that particular trade in the hope that they might avoid making the same mistake in the future.
    In doing so, they keep emotions like pride or fear in check by letting themselves cool off before approaching the next trade with a clear head and sound judgment.

    尽管在金融市场进行交易会有很高的风险,但是如果您采用正确的方法,它仍然可以产生额外的收入。 通过选择可靠的经纪商,例如InstaForex,您可以进入国际金融市场,并为实现财政独立开辟道路。 您可以在这里注册。


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    Wall Street's Complexity versus Investors' Profits & Simplicity

    Wall Street's Complexity versus Investors' Profits & Simplicity“Any darn fool can make something complex; it takes a genius to make something simple.” -- Pete SeegerAs a long-time trader, I am living breathing proof that simplicity and profits are positively correlated while complexity and profits are inversely correlated. In other words, as my 25 year investing career has jettisoned multiple methodologies and numerous indicators, my profits have became more regular and predictable while my losing ratio has diminished. This is the absolute antithesis of what Wall Street wants you to believe. Wall Street lives and breathes on complexity. They pitch derivatives of every variety and alternative funds for specific self-serving reasons. 1. They want to convince investors that it’s far too complicated for them to manage their own money – therefore, the wisest decision is for investors to just give it to Wall Street managers instead.2. They try to assure you that with this complexity come “insider” rates of returns and big profits. But then can you explain to me why so many university endowments and retirement funds are closing out their hedge fund positions? Because the returns have not justified the risks, losses and complexity.3. Wall Street loves to use the cliché, “you get what you pay for” as justification for higher fees. So then, can you explain to me again why so many academic studies have concluded that no load mutual funds outperform advisor-recommended loaded mutual funds? The fact is that investors often do not get what they pay for. gold signalThe catalyst for this week’s rant is that I cleaned out a closet with my old trading binders from over 20 years ago and was stunned by two observations. The first thing I realized was that I had been so vulnerable to believing Wall Street’s siren song of complexity. The second thing was that it was obvious my trading methodology back then was unnecessarily complicated. To most individual investors, it seems counterintuitive when I preach my doctrine of simplicity, but it is precisely this simplicity that empowers you to outperform the professional money managers. Layer on top of that my other sermon that no one will manage your money with the same passion and commitment as you yourself and you have the magic ingredients for achieving consistent success as a stock market investor.gold signalsWall Street is based on its own version of Yin & Yang as opposites and contrary forces are actually interconnected and interdependent. In simplest terms, the market is made up of buyers and sellers, load and no load funds, passive and managed strategies. The complexity and simplicity paradigm is just another example. Much like life, one must decide to embrace the light or the dark, the hot or the cold, the high or low. So too, as an investor, you must choose between the dichotomies that Wall Street offers you.I am simply sharing the experiences of my own journey as an investor. As I embraced the mantra of simplification in my investment methodology and my trading tools, my net worth grew. My relatively small basket of 10 technical indicators and the Tensile Trading approach that I’ve written so much about are living testimonials to this mantra.Albert Einstein famously said, “If I had one hour to save the world, I would spend 55 minutes defining the problem and five minutes implementing the solution.” If you were in a life threatening situation and had only one hour before it proved fatal, what would you do? Einstein said he’d spend his time wisely asking probing questions to understand the problem in depth. Having done that, he’d only need 5 minutes to address the issue. Many new investors I meet in my classes totally flip around Dr. Einstein’s approach. They have an unstoppable inclination to jump right into the market, metaphorically speaking. They’ll trade impulsively for the first 55 minutes and then allocate the last 5 minutes trying to figure out what just happened.Humor me, please. Just go with this. Place your hands on the table, turn down the lights and let’s invite Albert Einstein to our séance to give us his advice. If it was indeed possible to “channel” him, I suspect he would suggest approaching the market’s first 55 minutes more like this:gold trading strategyYou have accumulated certain assets. Ask yourself if they are safe. Dr. Einstein would challenge you to address asset protection, first and foremost. Issues such as insurance, estate planning, identification theft, tax planning, record keeping and the like. You have to secure what you’ve got.Next, he would ask if you had thought through personal money management questions and committed yourself to a personal trading plan in writing. It’s shocking how few investors actually do this. Einstein’s objective here would be to make certain you grasp the full scope of the problem.

    尽管在金融市场进行交易会有很高的风险,但是如果您采用正确的方法,它仍然可以产生额外的收入。 通过选择可靠的经纪商,例如InstaForex,您可以进入国际金融市场,并为实现财政独立开辟道路。 您可以在这里注册。


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