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Facing Temptation With Discipline
Looking at your screen can be much like looking at a slot machine, and stopping yourself from dropping a dollar in the slot
and pulling the handle. You must restrain yourself from making an impulsive trade, but there's a very human tendency
to seek out excitement and receive a quick reward. You must fight temptation and maintain self-control.
However, Electronic trading platforms have made trades easier to execute, but at the same time, they've made trade
execution so fast and easy that many novice traders overtrade, and even when traders don't overtrade, they may be tempted
to constantly monitor their trades and abandon trading plans prematurely, a common ailment of novice and seasoned traders
alike. Practicing patience can help you stick with your trading plan until it comes to fruition.
Impulsive trading doesn't happen in a vacuum. Many factors contribute to prematurely abandoning a trading plan. A
significant precursor, though, is a feeling of boredom. When we are bored, we may want to spice things up, and what
better way to put a little excitement into life than looking at a position to see how well things are going. What's the problem ?
The more you look at how a trade is going, the more you think about it, and if your plan is to patiently wait for a week
or longer, looking can only make you feel like you want to take action. It's necessary to remove temptation.
Don't think you are a hero. The biggest mistake traders make is thinking that they have superhuman self-discipline. Do you
remember the "Got Milk ?" commercial from a couple years ago? Imagine eating a frosted cupcake and trying to stop yourself
from drinking a glass of milk. You could try it, but it wouldn't be easy. Rather than put yourself in such a situation, it's easier to
avoid eating the cupcake altogether. It's the same with trading:
Avoid looking at the market action unless it is a necessary part of your trading plan.
How else can you maintain discipline ?
First, admit your limitations. Self-control is like a muscle. You need to practice self-control. Don't try to be superhuman.
You can't run a marathon tomorrow if the farthest you had to run in the past year was between your front door and your car
when you were late for an appointment. You need to work up to it. Don't expect to be able to maintain self-control without
extensive practice. Give yourself time to build up your self-control skills.
Second, make a strong commitment to build up your self-control skills. Take the matter seriously. Until you commit to
change, you cannot improve your ability to maintain discipline. It's similar to losing weight or quitting smoking. A person must
first acknowledge that he or she has difficulty with self-control before change can happen. Admitting that you need to improve
your self-control skills goes a long way.
Third, you must use psychological techniques to learn to maintain discipline.
It is essential to monitor your self-talk. The kind of self-talk that most people have when they lose control is, "I need a little
excitement. Let's see how my positions are doing." When you look, however, you'll bring the emotions regarding your trade
into your consciousness. You'll start thinking of how well or poorly the trade is going, and when you start thinking about it, you
will be putting strain on your self control "muscles." It's useful to remind yourself that you can maintain control: "I can wait if I
try. I just need to concentrate".
Fourth, when you start thinking about making an impulsive move, immediately run away from your screen until you
"cool off" and allow your emotions to dissipate. In the old days, brokers helped prevent traders from acting too impulsively.
Having to call a broker provided a cooling off period. A trader may have wanted to change his or her trading strategy
prematurely, but it wasn't as simple as clicking a mouse to execute a trade. A trader had to call up the broker and deal with
the interpersonal issues of what he or she might think. A trader was likely to stop and think, "I don't want my broker to think
that I'm wishy-washy, impulsive, or timid, let me think about this a little more." But these days, you can go to your computer
and buy, sell, and re-buy a position in a matter of minutes. An obvious remedy to impulsive overtrading is to use a broker to
place your trades. Another solution is to acknowledge that looking at your screen too soon is a temptation, and avoid looking
at it as much as possible. And if you do catch yourself looking, leave the room as soon as possible before you take an action
you don't want to take. Don't trade impulsively.
The winning trader is the disciplined trader.
The more you can stay calm, rational, and in control, the more profits you'll take home.
Looking at your screen can be much like looking at a slot machine, and stopping yourself from dropping a dollar in the slot
and pulling the handle. You must restrain yourself from making an impulsive trade, but there's a very human tendency
to seek out excitement and receive a quick reward. You must fight temptation and maintain self-control.
However, Electronic trading platforms have made trades easier to execute, but at the same time, they've made trade
execution so fast and easy that many novice traders overtrade, and even when traders don't overtrade, they may be tempted
to constantly monitor their trades and abandon trading plans prematurely, a common ailment of novice and seasoned traders
alike. Practicing patience can help you stick with your trading plan until it comes to fruition.
Impulsive trading doesn't happen in a vacuum. Many factors contribute to prematurely abandoning a trading plan. A
significant precursor, though, is a feeling of boredom. When we are bored, we may want to spice things up, and what
better way to put a little excitement into life than looking at a position to see how well things are going. What's the problem ?
The more you look at how a trade is going, the more you think about it, and if your plan is to patiently wait for a week
or longer, looking can only make you feel like you want to take action. It's necessary to remove temptation.
Don't think you are a hero. The biggest mistake traders make is thinking that they have superhuman self-discipline. Do you
remember the "Got Milk ?" commercial from a couple years ago? Imagine eating a frosted cupcake and trying to stop yourself
from drinking a glass of milk. You could try it, but it wouldn't be easy. Rather than put yourself in such a situation, it's easier to
avoid eating the cupcake altogether. It's the same with trading:
Avoid looking at the market action unless it is a necessary part of your trading plan.
How else can you maintain discipline ?
First, admit your limitations. Self-control is like a muscle. You need to practice self-control. Don't try to be superhuman.
You can't run a marathon tomorrow if the farthest you had to run in the past year was between your front door and your car
when you were late for an appointment. You need to work up to it. Don't expect to be able to maintain self-control without
extensive practice. Give yourself time to build up your self-control skills.
Second, make a strong commitment to build up your self-control skills. Take the matter seriously. Until you commit to
change, you cannot improve your ability to maintain discipline. It's similar to losing weight or quitting smoking. A person must
first acknowledge that he or she has difficulty with self-control before change can happen. Admitting that you need to improve
your self-control skills goes a long way.
Third, you must use psychological techniques to learn to maintain discipline.
It is essential to monitor your self-talk. The kind of self-talk that most people have when they lose control is, "I need a little
excitement. Let's see how my positions are doing." When you look, however, you'll bring the emotions regarding your trade
into your consciousness. You'll start thinking of how well or poorly the trade is going, and when you start thinking about it, you
will be putting strain on your self control "muscles." It's useful to remind yourself that you can maintain control: "I can wait if I
try. I just need to concentrate".
Fourth, when you start thinking about making an impulsive move, immediately run away from your screen until you
"cool off" and allow your emotions to dissipate. In the old days, brokers helped prevent traders from acting too impulsively.
Having to call a broker provided a cooling off period. A trader may have wanted to change his or her trading strategy
prematurely, but it wasn't as simple as clicking a mouse to execute a trade. A trader had to call up the broker and deal with
the interpersonal issues of what he or she might think. A trader was likely to stop and think, "I don't want my broker to think
that I'm wishy-washy, impulsive, or timid, let me think about this a little more." But these days, you can go to your computer
and buy, sell, and re-buy a position in a matter of minutes. An obvious remedy to impulsive overtrading is to use a broker to
place your trades. Another solution is to acknowledge that looking at your screen too soon is a temptation, and avoid looking
at it as much as possible. And if you do catch yourself looking, leave the room as soon as possible before you take an action
you don't want to take. Don't trade impulsively.
The winning trader is the disciplined trader.
The more you can stay calm, rational, and in control, the more profits you'll take home.
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| Daytrader-Generation “No Gambling but True Working Tools to Achieve Profit” "Day-Trading, Business of the Future !" |
Trader : Herman Bogaerts --- Tradersname : Freedom --- Portable : 0033.(0).683.13.99.99
E-Mail : Herman.Bogaerts@Wanadoo.fr --- Herman_Bogaerts@Yahoo.com
E-Mail : Herman.Bogaerts@Wanadoo.fr --- Herman_Bogaerts@Yahoo.com
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