Investors - What Separates the Good Traders from the Bad Traders?
There are many forms of investing online. While I can give you a list that is a mile long, these are the most common forms of successful investments. Some of the following know how to invest terms are:
I want to start this investing online critique out with a story... On a beautiful late spring afternoon, twenty-five years ago, two young men graduated from the same college. These men were very much alike. Both, better than average students, were personable and filled with ambitious dreams for the future.
For the sake of my example, I will set both college graduates off online trading using a day trading plat form. Through a gift, both start with the same online investing investment risk capital, the same daytrading plat form, and the same trading system with precise rules for entry and exits.
Shockingly, there is a difference. After one month, one day-trader went broke / bust, while the other day trader returned a 20% profit.
Have you ever wondered, as I have, what makes this kind of difference in people's trading? It is not always a native intelligence, talent or dedication. It is not that one person wants success and the other does not.
The difference lies within the psychology of the brain. Your psychological mind set is likely to play a larger role in your trading online career than your chosen technique or any other details associated with your day-to-day practice.
Here are some good examples:
1. One person looks at a glass ½ empty, while the other personality looks at that same cup as ½ full. 2. Someone may look at problems and call them stress, while another individual looks at troubles as challenges. 3. Another one may look at a ship in a storm as an adventurous roller coaster ride, while another human being sees the same situation as a hurricane that has a death call.
I am not the only one to discover this...
In his book, "Trade Your Way to Financial Freedom", the renowned American psychologist Dr. Van Tharp discusses the role psychology plays in trading success. He divides trading into three Ingredients.
In his pie chart:
-- System is 10% -- Money Management Success is 30%, and -- 60% pertains to the psychology of thought and emotion.
Tharp discovered that the trader's psychology make up of the mind has more to do with his success than anything else does.
However, what exactly is the psychology of the mind?
short, the psychology of the mind refers to your thinking and emotional actions and responses to any given situation...In trading, fear, greed, vanity, pride, hope, jealousy, denial - all these can affect investment decisions. Although, your aim in the market is to maximize your profit and minimize your risk, thinking and emotions often make this easier said than done.
FOR EXAMPLE - Traders, who cannot control the psychological process of thought and emotion, make the wrong decision - such as the common amateur mistake of holding a losing position in the belief that someday it will become a winner.
Loss aversion is a classic mistake. By nature, humans value a loss. Therefore, you suffer almost twice as much pain losing $1 as you would in gaining $1. Loss aversion compels most traders to hold a losing stock while it plummets downward. This clouded judgment clearly contradicts the trading adage: cut your losses and let your profits run.
Emotional investors hold losing positions because they view paper losses differently from realized losses. An investor also engages in other forms of irrational behavior.
EXAMPLES are attributing success as natural and losses to bad luck.
This is just the tip of the iceberg. When talking about the other devastating effects of trading, if you do not have the psychology of your thought and emotions in the proper prospective the consequences can be devastating.
This is what opens up problems for new traders, and then they lose manage money very quickly in the markets. Most people completely wiped out their finances within the first year of trading. So, as you can see, your thinking and emotions play a big part in determining whether you fail or succeed, but did you know that thought and emotion make up two different spheres pertaining to trading success?
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=- David Jenyns is recognized as the leading expert when it comes to designing profitable trading systems. Learn how *you* can become one of his students. Subscribe to eZine at: email@example.com
READ my articles; you'll FIND the best trading plans put together. Searching for these on your own, is a needle in a haystack. I trade everyday & my progressive efforts found the perfect system & plans work. These trading systems are unbelievably powerful, yet simple to use. Until recently, I've kept this formula to myself. NOW, I reveal all. CUSTOM ARTICLES AVAILABLE UPON REQUEST :-)
An Open Invitation To Frustrated Forex Traders That Desire Unlimited Success In The Market - Part 1
Why does one Forex traders succeed and another fail? What sets
the winners apart from the losers? Well, you won`t be surprised
to know that there are certain characteristics that all
successful Forex traders share. While many investors...
Discover An Effective Forex Trading System
What is the importance of an effective Forex trading system? An effective system provides you the trader, incomparable prospects to increase your earnings. And why not?
The Forex market is the largest financial market in the world with average...
Forex Trading Tips
Why do hundreds of thousands online traders and investors trade the forex market every day, and how do they make money doing it?
This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making...
The Best Time to Day Trade the Forex Market
The three major forex trading 'sessions' are as follows (all in
Eastern Standard Time):
1. New York open 7:00 AM to 4:00 PM 2. Japanese/Australian open
7:00 PM to 3:00 AM 3. London open 3:00 AM to 11:00 AM
** Often, the best times to...
Top 10 Scams
Here is a list of some of the frauds regulators are faced with every day. Recent additions are pricey day-trading seminars, supposedly high-yielding promissory notes and investments on viatical settlements (life insurance policies on terminally ill...
Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest / trade in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading.
** The Views and opinions represented in the provided website links and resources are not controlled by the Referring Broker or the FCM. Further, the Referring Broker and the FCM are not responsible for their availability, content, or delivery of services.