"The enemy is not the market, or your broker, or even the other traders out there. It's you."
Fear, Greed and Need
Your emotions play a key role to your success, in learning to try to earn a good second income by trading the markets. If you let them run rampant, the 'triplets' within you, fear, greed and need, will be your nemesis in this business. They will eat away at your trading account like a cancer until there is nothing left.
The fear of loss, the desire to maximize your profits and the need to feed your ego with success, are within us all. You, however, do have a choice. To either kennel them and keep them on a short leash or let them drag you from one end of your account to the other.
Does that sound too dramatic?
Well not to the vast majority of 'wannabe' traders after they fail (including myself once upon a time). Most learn the lesson long after they have missed the chance of a comeback. Consider yourself forewarned.
In this article I am trying to offer you some of my insight and knowledge that I have learnt over many years of trading. Quite simply, trading is a bit like flying, in that it is a whole lot easier to take off than it is to land. Also when trading, it is a whole lot easier to recognise when to enter a trade than it is to recognise the appropriate exit for you!
THREE BIGGEST KEY MISTAKES
The three biggest mistakes you can probably make are:
Entering a trade too early or too late;
Exiting a trade too early or too late; and
Trading far too often.
Here is a sobering thought. The average novice trader burns through his or her account very quickly. It is not that they are uneducated or stupid. It is that they either do not have, or choose not to follow, a trading plan or strategy. Remember, plan your trade, trade your plan.
One of the first things I encourage people to do is set up a personal trading plan. We are all different so I do not offer a 'canned' plan like some 'training' organisations do.
Until next time, happy trading
Dominic Nardone
This week’s email is written by Dominic Nardone of www.tradingknowledge.info. Dominic is also a professional trader and has a number of years under his belt trading the markets.
Please note that the views of Mr Nardone are his exclusive responsibility and have nothing to do with Tradefair Spreads, nor does the content of this website or his website.
The above comments do not constitute investment advice and neither Tradefair Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Risk Warning:
Spread bets carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Before you open an account, please ensure that spread betting matches your investment objectives, familiarise yourself with the risks involved and if necessary seek independent advice.
Article provided / approved by Tradefair Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.
Tradefair® is part of the Betfair Group.
'Trading Psychology' edited by DB, updated 04-Jun-09
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