| |
| |
|
|
Stocks and Mutual Funds |
|
Do You Know What is the Single MOST Critical Mistake in Trading the Stock Market??
Well maybe that's overstating it a little, but it's certainly one of the most important. It is?(drum roll please)? "the need to be right"! Now that probably wasn't what you were expecting. You might have thought it was going to be something like not picking the trend or putting too much money on a single trade or one of a dozen other things. But I can assure you, from bitter experience, that this one attitude causes more problems than most other things you might do as a trader. And it's worse for men! Something to do with ego or testosterone? You see our whole society is based on the importance of being right. The need to be right. Your parents rewarded you when you are right and told you off when you were "wrong". They probably still do this now that you are grown up! From your earliest days at school you are taught that being right is the most important thing. Isn't that what tests teach you? And this is reinforced through the rest of your life. Your boss probably reminds you of this just about every day! But some of the best things occur when we aren't right. Like the time you take a wrong turn. Either in your travels or in your life. And you end up at this amazing place or with this amazing person that you never would have, had you done the "right" thing. Plus there's not a lot of point beating yourself up when you aren't "right". Because, as we all know, it's going to happen pretty regularly! Coming from Australia, I don't know a lot about baseball. But I do understand that batters get paid a lot of money to miss hit the ball an awful lot! Think about that. Top baseballers step up to the plate every day knowing that they are more than likely not going to get it "right". Yet they are confident and successful because they know that over a season they are going to get it right often enough. Don't Beat Yourself Up or the Market Will join In! I went to a speed-reading course many years ago. I didn't learn how to read faster (!) but I did learn an attitude that has stuck with me ever since. It is - "Focus. No attachment to the outcome." This guy was telling us about how he taught elite sportsmen to achieve their best (hope he was better at that than teaching people how to read fast!). He explained that the trick was to get them to keep taking the shot (or making the jump or whatever) without getting upset with themselves if they got it wrong. The key was for them to focus on what they had to do in that moment, not on the outcome. Maybe I have lost you? But the point I'm trying to make is that you need to go into each of your trades with your focus - not on being right - but on following your trading system. And then the key is to not beat yourself up if you "get it wrong". Because if you have followed your system and you know the system works over time, you have done the "right" thing. Once you have confidence in your trading method your only focus is on following the signals. "Focus. No attachment to the outcome." By the way, try this approach in other areas of your life. It really works! My golf was much better once I stopped getting angry at myself for every lousy shot. Deadly Attitude in the Market In the stock market you can't afford to hold onto the need to be "right"! When trading, you cannot be right 100% of the time. In fact, you can be right only 50% of the time and still make lots of money. But this means you have to be wrong an awful lot! The market will do what the market will do - no matter what your opinion might be. If you are holding a stock and you expect it to go up in price but it starts to go down, what happens? If you are like me, a little voice inside says something like "?but this wasn't meant to happen!?it can't do this to me!? I know I'm right - it's just a temporary set back; it will come right, I'll just wait it out? This "voice of reason" is your ego. You can't bear to be wrong, so you justify your decision to yourself. You must be right! You tell yourself that you know what's going to happen?the market's just confused?it's just got it wrong! (totally illogical reasoning - the market can never be "wrong" - but it makes sense at the time!). This deep-seated, primordial need that we have to be right can destroy you in the stock market. It will make you put too much money on one trade. And it will make you hold onto stocks that you should have sold days or even weeks ago. It will mean you will miss opportunities you should have taken because your view was the opposite of what actually happens. And you can miss getting extra profits from a trade because you were convinced that "?it couldn't possibly go any higher?" By being aware of this "need" you can overcome it - over time! You need to get to the point where you "want what the market wants". Not what you want. Just remember. "Focus. No attachment to the outcome." David Chandler Ordinary People Making Extraordinary Profits! For a free mini-course on stock and options trading click the following link: http://www.StockMarketGenie.com Or visit our blog at: http://stockmarketgenie.blogspot.com/ The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn't worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
Learn to Calculate a Stock's Pivot Point Stocks breakout from properly formed bases everyday but many investors don't understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory. Valuation Every day I hear from the "experts" on CNBC-TV and the radio gurus that the way to buy stocks is find value. One man's Rembrandt is another man's connect-the-dots and fill in the spaces. Successful Trading - Taking Profits - Part 1 So you're started trading, you bought some positions with your online broker, you've set some reasonable stop-losses to protect your account and all of a sudden one of your positions move strongly in your favor - so what do you do now? This my friend, is probably the hardest situation to deal with in trading the market - believe it or not.Do you take profits? Do you hold on for more profits? Do you take partial profits? There is no textbook answer to these questions as it depends on your trading objective. Investing in the Stock Market From the book 'The Stockopoly Plan' by the author Charles M. O'MeliaThere are several factors an investor in the stock market should consider:1. Mindset In 1960 an engineer working for a watch company in Switzerland discovered that a small crystal would vibrate at a constant rate. He found this was so accurate that it could be used to calibrate time so he took it to company management and said it would make an entirely new kind of watch that had no springs and no gears. Trading For A Living How many times have you said to yourself, "I'd like to quit this job and just make a living trading in the stock market"? Well, maybe you can, BUT.. Market Timing? The recent criminal fiasco in the mutual fund industry is being used by Wall Street to persuade investors that market timing is a bad thing. The late trading by Janus, Bank America and several other well known mutual funds is falsely being called market timing. Why Buy and Hold? Since I can remember, and that's a long time ago, the Wall Street brokerage companies, mavens and mutual fund managers have been exhorting the mantra of Buy and Hold for all your investments. There have been erudite studies published that this is the only way to go. Swing Trading Strategies Using Swing Trading Strategies and Technical Analysis when Trading Stocks to Make Consistent Trading Profits.This article is one small part of a series of lessons using Swing Trading Strategies and Technical Analysis developed by WD Gann which are designed to show how anyone can build a profitable Stock or Commodity trading business from scratch. Whitewater Stock Market Ever done any whitewater rafting or canoeing? Long periods of tranquil river followed by short periods of terror. Suddenly the water grips your vessel and you are pushed and shoved by massive currents over which you have no control. Investing in Trash Company Stocks Refuse is a serious issue in any society, about as serious as cleaning the water and air, even more so to some degree, especially if you study your history with regards to the plague. This is why it is considered one of the better long-term hold stocks to have in one's portfolio. No Load Mutual Funds: Investment Hype vs. Investment Help With the internet such a huge part of our daily lives, many investors have access to a wide range of instant investment information.Whether you're into stocks, bonds, mutual funds, futures or options, there are tons of electronic investment newsletters offering to turn your small stake into a giant fortune. Stock Market System ... ONLINE STOCK TRADING ... Beyond Day Trading Basics & Tips Day trading is all about making buy and sell decisions. When you make a trade either your going to lose money or your going to make money, and some other times you will break even. The Shadow The Shadow knows. There used to be a radio program called The Shadow where the hero, Lamont Cranston, the Shadow, would overcome the shadowy forces of doom by clouding the vision of those around him. The Value of Stocks of a Company The debate rages all over Eastern and Central Europe, in countries in transition as well as in Western Europe. It raged in Britain during the 80s: Is privatization really the robbery in disguise of state assets by a select few, cronies of the political regime? Margaret Thatcher was accuse of it - and so was the Agency of Transformation in the Republic of Macedonia. Lights of the Stock Market There are red lights, green lights, blue lights and spot lights. There are orange lights, pink light and flash lights. Series 7 Exam What is the Series 7 Exam? If you are looking to become a licensed Stockbroker, you need to know about the Series 7. The Series 7 is a 250 question exam that when passed, licenses you to act as a Registered Representative. Economists #2 Economists know more about how the fragments of society work than anyone. In school they are taught to break down the economy into its tiniest parts and to quantify each minutiae so it can become part of a formula. 401K-itis Are you one of those many people who dread reading their 401K statements? You have been watching it decline for about 2 years and are wondering if will ever stop. Just about everyone says the market will come back. Big Buildings Can Mean Big Economic Disaster AS BUILDERS BEGIN WORK ON THE FREEDOM TOWER in New York City, to be the world's tallest building, economist Mark Thornton offers a history-based theory of the relation between super-buildings and the economy. Thornton surveyed economic performance worldwide following the completion of each of the world's tallest skyscrapers, and suggests what these events foretell.
|
|||||||||||||||
