Trading is very dynamic. Traders who adopt a wishy-washy mindset are those who who really excel and stay in the game. Nothing is cast in stone in the world of trading and perhaps this is one of the reasons why many people do not embrace the finer art of technical analysis and trading. They give up practicing technical analysis or even trading altogether after setbacks. Many are too fixated in their long or short bias that they forget the most important goal of all; which is as traders, they are supposed to follow the way of the market instead of arguing with the tape / charts !!
Adopting a strict discipline mentally will allow a trader to overcome his fear of the market taking away his paper profit by adhering to his sell rules as dictated by his trading system or style. Jumping at early profits would only compromise the "letting your profits run" rule. It takes discipline to sit on your hands and wait for the desired move to end before closing your trade. The right patience is also required to make the big money as the market takes its time to play out the move. More often that not, we may be right in our interpretation of the movement of stocks but we beat ourselves by failing to sit tight. This was rightly pointed out by Jesse Livermore in one of his many famous quotes: “It never was my thinking that made the big money for me. It always was my sitting."
Whether you like it or not, there will be times whereby your favourite trading setups will fail. One should be flexible enough to change course or even scratch (fold) your trade if your stock is not acting the way you think it should be. Staying in cash and doing nothing at all while waiting patiently for your setups is also a strategy which many of us failed to fully appreciate. It is only after one experience the painful losses when market whipsaw that one will learn to appreciate the rationale behind this strategy.
Without a doubt, trading is one of the most challenging game ever. Let's embrace uncertainly, fear and greed. Never give up.
Adopting a strict discipline mentally will allow a trader to overcome his fear of the market taking away his paper profit by adhering to his sell rules as dictated by his trading system or style. Jumping at early profits would only compromise the "letting your profits run" rule. It takes discipline to sit on your hands and wait for the desired move to end before closing your trade. The right patience is also required to make the big money as the market takes its time to play out the move. More often that not, we may be right in our interpretation of the movement of stocks but we beat ourselves by failing to sit tight. This was rightly pointed out by Jesse Livermore in one of his many famous quotes: “It never was my thinking that made the big money for me. It always was my sitting."
Whether you like it or not, there will be times whereby your favourite trading setups will fail. One should be flexible enough to change course or even scratch (fold) your trade if your stock is not acting the way you think it should be. Staying in cash and doing nothing at all while waiting patiently for your setups is also a strategy which many of us failed to fully appreciate. It is only after one experience the painful losses when market whipsaw that one will learn to appreciate the rationale behind this strategy.
Without a doubt, trading is one of the most challenging game ever. Let's embrace uncertainly, fear and greed. Never give up.
No comments:
Post a Comment