The Psychology of Trading

The Psychology of Trading – is possibly THE most important part and yet most new traders ignore it. Below are a collection of thought provoking articles which enable you to create the mindset of a professional trader.

Fear Vs Greed based traders

Two key drivers greed-smfor humans are fear and greed. They influence us in all aspects of life and can aid/disrupt our decision making abilities. When it comes to trading the markets, individuals who are influenced by one or the other of these traits will need to recognise them so they can improve their results….read more

Do you follow the crowd?

When it comes to crowd-smtrading, do you follow the crowd? We as humans have a natural tendency to do so, but when trading the markets, following the masses can often lead to losses. Unless we are in the middle of a trend, it doesn’t normally pay to be on the side of the masses…read more

Understanding our emotions when trading

We repeatedly say emotions-smthat psychology is by far the most important aspect of trading in the markets. The best market timers are able to control their natural emotions and make calm, calculated decisions about when to buy or sell. There are a huge array of emotions that different investors may go through but the bottom line is these are not all conquering, you can control them like anyone else…read more

Hitting the trigger

The difference success-failure-smbetween success and failure for a trader is much closer than you might think. New traders tend to think that the pro’s have some sort of secret knowledge/system that enables them to make trading look so easy. However, the difference between a new trader trying to gain consistency and a professional normally comes down to mindset…read more

Two of the most powerful investment secrets

Having re-read secret-smJack Schwager’s book ‘Market Wizards’ recently, it gave us yet more evidence that the world’s greatest traders and investors really only have two things they would agree on. You see, most of them trade differing markets and certainly have different styles/strategies for investing. But there were two common links between them…read more

The power of patience

We all like to think we have the patience-smdiscipline to always trade in a way that is logical and acting in our best interests. But certain emotions can cause us to make decisions that are in direct conflict with this. There are many psychological traits that can help or hinder our trading and one that we want to explore is patience…read more

Keeping the scoreboard ticking over

Watching the 6 Nations rugby scoreboard-smreminded us of an important parallel between the game with the oval ball and trading in the markets. Clive Woodwood always stressed the importance of ‘keeping the scoreboard ticking over’, keep taking the 3 points whenever they were on offer…read more

Trade like the house

It’s widely accepted that in Las Vegas, the roulette-smhouse always wins. Not necessarily every time, but in the long run it always wins because the odds are stacked in its favour. When we travel to Vegas to gamble, we ‘hope’ that we will leave the black jack table a winner – we are either going to get lucky or not. However, trading the markets is not gambling if done correctly. If you trade with a plan, you have an edge that you know will win over time as long as you have the discipline to follow it…read more

Getting your revenge!

One of the easiest mistakes traders and revenge-sminvestors make is trying to make back losses from a previous trade. Many people call this revenge trading and it can come in various forms. However, the most common is to double up on future trades to try and make back previous losses quicker…read more

Taking the long way round

When it comes to investing and business-plan-smtrading, we need to be able to objectively analyse the markets without allowing our emotions to influence us. Now when it comes to making decisions in everyday life, our minds tend to react to the situation that is in front of us on each occasion. These reactions are completely natural and we don’t even have to think about them. But when it comes to investing, the reactionary impulses that we naturally use in every day life are very often the complete opposite of what we need to be successful in the markets…read more