Trader Psychology

One of the hardest parts of trading or investing is keeping our emotions in check when buying and even moreso when selling. I can easily still find myself sitting on a winner knowing I should take profit then watch it fritter away back to ground zero where then that trader now reluctantly becomes a long term holder.

Nothing worse than new found enthusiasm being quickly eroded into complacency and false reasoning why it's a home run, only to possibly end up even losing on what was originally a winning trade. Happens to the best of us, that is why I am way more focused now on keeping the emotional side at bay and clicking that mouse when the time is right. ?

But how ? Practice, plain and simple. Make paper trades hundreds of times,even if you just keep a mental scorecard. Drilling home that mental AND verbal command to hit the sell button and then give yourself kudos for pulling it off. It is critical to changing the mindset that you are going to miss out on even more profit which most time you don't. Reward yourself right after with a treat,beer,Canucks tickets or whatever. Sounds like animal training doesn't it ? :)

Practicing is critical if you want to be an active/short term trader,theres no time to waste humming and hawwing. You have to almost take a piece of paper and tape it to your monitor that says " Why The Hell Am I Even Here ? To Take PROFIT !!! " You may find that helps, it does for me.

When we get into these kinds of markets where we are basically flatlining/range trading, it is a good idea to use a couple valuable sites to keep you mentally in the game but not destroy you with information overload. The site I go to in times like these is who I refer to as The Godfather of Trading Psychology, Dr. Brett Steenbarger. The guy is frigging incredible and it is all free. The man is a trading psych machine who provides tons of charts and insight you will find no where else. You will find him at http://traderfeed.blogspot.com . He's on Twitter as well.

The second site I like to go to is Bernie Schaeffer's site for his weekly commentary which never ceases to amaze me on how bang on this guy is with his market insight. When the herd is leaning one way, he will lean the other but back it up the other with facts and stats that are so easy to understand. He has helped me many times when I see uncharted waters ahead. He's at http://schaeffersresearch.com/ .


Hope you find those two sites helpful as education is the key to making money and I love to help others make some cash as well as have some fun at the same time.

Cheers !