Trading Psychology – Why Courage Is A Huge Red Flag
For anyone to even consider being a trader, it takes guts, that’s for sure. However, there are quite a few traders that think trading with courage is kind of cool, that it makes them a rogue investor of sorts. The problem is, being courageous as a trader is really a red flag, and should be seen as a warning, not as a trait to be admired and here is the reason why.
The reason is that courage is by definition taking action in the face of fear, in spite of it as a matter of fact, and trading from a position of fear is not a desirable way to trade at all. If you have genuine fears, not just a little excitement from the anticipation of getting on with your trading day, then that is a sign that a real problem exists, and it is a problem that will wind up costing you.
What kind of fears are we talking about?
- The fear of losing money (or capital)
- The fear of failure
- The fear of making mistakes
…just to name a few.
Fortunately, there is a simple and direct way to become free of your fear. That is correct. Instead of feeling fearful and anxious about your trading, you really can feel very at peace and secure. It’s all about replacing your fear with real and well-founded confidence.
Okay, so I can tell what you are thinking right now, “Oh yeah, that is a whole lot easier said than done.” But the reality of the matter, the exact opposite is true. Trading while having fear and anxiety hammer on you is by far the harder way to trade than calm, cool and collected.
That’s why the adage “Treat your trading as a business” is so critical to being able to trade with true confidence. The business-like approach gives you the full confidence that you are trading in a calculated and knowing manner, rather than going on hope and courage. Now, there are certain elements and processes involved in treating your trading as a real business, and a proper business plan is at the heart of it all. The word “proper” is the operative term in that statement. Most traders make the mistake of having “make lots of money” as their business plan, and that’s all. That’s not a business plan by any means.
To have real confidence in your trading operation, discover the trader training program specifically designed to walk you through the steps of properly organizing your trading business, including the creation of your own personal Trading Business Plan,
When you don’t treat your trading as a business, you’re running on hope and faith, which leave you open to all sorts of fears and other emotions. This also sets you up for inconsistent and sporadic trading, which is not the desired result. When you are properly organized and prepared, you have true confidence in what you’re doing – and you no longer have need for courage because your fears have been addressed.
In short, fear is the absence of confidence. Where one exists, the other cannot. If you are feeling fear, whatever it may be, it is there for a reason and it is telling you that you are not as ready to face the challenge as you should be. If you were properly prepared, you would not be fearful at all. Trading with true confidence from proper preparation and operating in a business-like manner is truly the best way to trade!
To trade with true confidence and in a business-like fashion, watch this free trader training video, Trading As Your Business here, http://insideouttrading.com/tayb/tayb.html
You will also find the answers to many of your trading psychology questions as you watch it!
Trading Psychology – 2 Crucial Best Practices You Can’t Afford to Neglect
In my Quality Engineering days, we always sought to establish Best Practices wherever possible because it had a measurable effect on the bottom line, plus numerous other aspects of the business. Now in trading there are Best Practices which will definitely benefit you and if you neglect them, your performance and your results are almost certain to suffer.
The First Best Practice
Highly successful businesses don’t just ‘happen’ by accident or by themselves… and you do want a highly successful trading business, right? I mean you’re not in this for mediocrity or just something to do, are you?
No, you want a trading business that is consistent and most of all RELIABLE. You want the security of knowing that your trading business can be counted on to provide both right now and for the future. Again, reliable businesses don’t just happen, but the reason the so many traders never get anywhere, let alone taking it to that level where it IS reliable is this:
- they make the mistake of thinking that if they can just get making some money, then somehow everything will fall into place.
Where things go wrong
So many traders wind up too busy doing the thing of the business to ever take it to that next level, and just stay in kind of that ‘scrambling to make money this month’ mode. This is how businesses that ‘just survive’ get built and the owners usually do NOT enjoy the lifestyle that they want.
They find that they are working more hours than they’d like. They are not making nearly as much money as they’d like. They do NOT have the security in their business that they want.
The other (and more common) result is that the business struggles and dies, usually in a matter of months, simply because of the resources that get wasted instead of contributing to the bottom line.
So the solution is to implement the first Best Practice: taking time to work “on the business”, not just “in it”.
This is most crucial AT THE VERY BEGINNING of the venture with the most important business asset – your Business Plan. Once that is in place, then taking time periodically to again work “on the business” and not just in it, is so vital to making it what you really want.
The Second Best Practice
Because you are the decision-maker and center of your trading business, how well you perform has a direct impact on how good your results are, so you need to live by the second Best Practice and that is making the time to take care of yourself – this means several things.
1. Take the time to exercise. Taking a walk or jogging or anything that gets you away from ‘work’ and does your body good will also benefit you in your trading.
2. Take time to detach and get some R & R. It is vital to efficient and effective trading for you to take time completely away from trading. A full 24-hour break, meaning completely stepping away from it, will do you worlds of good.
3. Get enough sleep – how can you expect to trade at your best if you are shorting yourself necessary sleep? You can’t, so make sure you get enough to feel rested.
4. Mind what you eat. Certain foods will agree with you and others might taste good, but don’t serve you well. On trading days, eat what helps you feel good and sharp.
Summing it up – and more…
Your trading is your business and it directly depends on you the trader. Put these Best Practices into place and make them practices. Remember to work “on your business”, take care of yourself, and make sure that you have a Business Plan.
Are you truly treating your trading as a business?
To watch the video “Trading As Your Business”, go to
http://insideouttrading.com/tayb/tayb.html
Find out how well you’re doing, take the “Trading As Your Business Quiz” go to
http://insideouttrading.com/thequiz.html
Psychology of Trading Forex – Keys to the Winning Mindset
When it comes to trading Forex, your mindset is the most critical aspect on which to focus, but what specifically does that mean, and how do you go about it? Most traders I work with have that question initially, and it is very worthwhile to pursue because EVERYTHING depends on your state of mind when you are trading.
Okay, so what does ‘mindset’ mean in practical terms?
Your mindset is the set of expectations, beliefs, attitudes, doubts and desires that you bring to trading. Yes, this sounds like a pretty broad list, and it is – your mind is not a simple place. It is quite complex. Yet at the same time, getting your mindset right for good trading does NOT have to be an overwhelming task.
First thing to understand that much of your mindset is determined by a handful of perceptions. These perceptions include what trading is all about, your relationship with money, and your self-image.
The reason that so many very intelligent and otherwise successful people struggle when it comes to trading is because they underestimate what trading is, what all is involved in successful trading, and what it takes personally to make it as a self-directed independent trader.
They struggle NOT because it is such a complex or inherently difficult occupation. They struggle because they fail to take the simple steps to make it a successful pursuit.
Why do so many people fail to approach trading in a more realistic and healthy manner?
One reason is primarily lack of proper guidance. There are numerous large companies trying to lure people into trading with an ‘easy money’ presentation. Some even have multi-million dollar television ad campaigns that have been running for years.
Partially due to the presentation, but mostly due to lack of general education, trading is perceived as rather a simple endeavor that many think that can be learned “on the job”. Many attempt to get their education on forums, online videos and in articles. While these can be helpful, this is one of the most difficult ways to learn a profession, which trading is.
Those that at least partially recognize that trading truly IS a business, albeit one with low barriers to entry, give themselves a HUGE advantage.
How is that?
Because the simple act of recognizing the nature of the activity brings with it a host of perspectives, attitudes and expectations that put you in a very advantageous mindset – the right mindset to win.
This is why the trading wisdom, “Treat your trading as a business” is SO crucial and more important than most realize.
When you treat your trading as a business, you inherently shift the odds of making it away from failure and towards success. The business-like approach and mindset bring a calculated approach to your trading.
To see how well you are treating your trading as a business, there is a FREE quiz you can take.
Click here to take the quiz
Often times it is in knowing the right questions to ask…