|
Below you will find a list of tips to help you manage your emotion when trading.
Some of them may seem elementary, but they are all critical to your success.
Remember, your emotion determines your ability to make wise decisions. Master
the fundamentals!
1. Have fun! If you aren't enjoying the process, you're doing something wrong!
Figure out a way to enjoy it more...play some music or something.
2. Always make trading decisions when the technical indicators all say the same
thing. When the indicators are all in alignment, you are much more likely to make
decisions based on the truth...not how you feel.
3. Never trade when you’re tired, stressed, hungry or sleepy. You need to be
alert and in a positive frame of mind.
4. Focus on setting a weekly goal for yourself, then break it down to a daily goal.
When you’ve successfully met your weekly goal for 4 weeks in a row, then
double your goal. This will build confidence and consistency in your trading.
5. Never put more than 10% of your momentum trading money in any one trade.
This is very important. Violating this can cost you your entire trading account!
6. Always trade as if every penny of your life savings is in each play. This
attitude will help you to remain cautious. Always use stops and trailing stops to
safeguard your trade.
7. Trade the same dollar amount on each trade…as your account grows
monthly, increase your trade sizes equally.
8. Be patient…there are plenty of opportunities…wait for things to line up just
right. Be very picky. The quantity of trades you make is nothing compared to the
quality.
9. Go for base hits…avoid swinging for home runs. While it may be fun to hit
home runs, it can lead to lots of strike outs.
10. Quantify your level of certainty about the trade before you enter (and be
honest!) …ask yourself, ‘on a scale of 1 to 10, should I take this trade?’ Trade
only eight or above.
11. Avoid getting caught up in any individual trade. Take small losses when they
come and enjoy the fact that they're "small" losses.
12. Remember the loss recovery formula. (Details to follow)
13. Be "stingy" with your profits…if you have a winning trade, don’t let it go
negative… don’t give back any profits, ever! Take small profits and enjoy the
fact that they are wins!
14. Celebrate all winning trades…even small ones. Yell ‘yahoo!!!’, ring a bell,
jump up and do a dance, it contributes to your winning mindset.
15. Celebrate when you break even…there is always another great opportunity
right around the corner.
16. Celebrate all losses…have a quick party. Don’t let your mind fall into the
dumps because of a loss…keep your psyche healthy and positive.
17. Take your profits home quite regularly. Reward yourself frequently! For
every $2,000 profit, I take $1,000...this keeps my trading account from growing
too quickly thus causing me to get over-cocky and under-cautious!
18. Fear and greed are your biggest enemies…avoid them like the plague.
19. Avoid over-confidence, be wary of euphoric highs from trading…they are
your emotions out of control on the other extreme end of fear and greed. They
will lead to costly mistakes and loss.
|
