The immense paradox of trading today is that it demands a level of discipline so high, that it often seems daunting to the newest of traders and with it, hand them the boot in which they are kicked off the market. Trading in every sense attracts those that are impulsive, cataclysmic and those that have gambling prone psychologies, and it is those very people that will see moderate success and massive failure in the end, because the market is set up in such a way to devour, eat, hunt and obliterate those very people, all the time.
What kind of psychology do you need to have when trading online. One thing you need to check back at home is your emotions. While this is a paradox and ultimately, something we cannot avoid. We are creatures of emotion, and we are not built like machines. When we see what we think is a good trading pattern on the ground, then we always jump at the chance to capitalise on something great and make some real money. Our heart doesn’t think about the how and the why, Invest Now in Trading it just thinks of the ‘what can be’ and the money that can get them rich.
Then the other problem is that there are traders who are much too calculative in the sense that they are machines to the point of stupidity. So if you see a good price pattern emerging, you become doubtful and pour over your charts. You make the calculations and pour over the data, check the news and feeds that you are getting and soon, you realise that not only has the market passed you by, but the price has peaked and now is dropping at a phenomenal rate. You could have been there, riding the waves of profit, but you are on the wrong end of the stick, losing money.
So the end result is that for online trading, you need to strike a sort of balance. Trading with hunches and feelings can come in, but for only 10 – 20% of the overall decision making process. The bulk of your strategy should be based on numbers and a good deal of analysis and once you can do that, then you would have perfected the art of mediocre trading. Mediocre is because you have a long way to go to get to know the market.