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This leads straight to disaster. What you think is irrelevant. The market is your boss. Trade your plan. |
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Thinking you are "bulletproof." In this case, the trader has made a few great trades, and he can do no wrong. Watch out. |
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Hesitation. The trader has a plan, the market comes to the selected price, but the trader can't pull the trigger. This trader is simply leaving money on the table. |
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Not staying focused. The trader lets the noise of the market distract him or her. To succeed, stay attentive to your plan. |
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Being right instead of making money. Trading is about making money . . . period! Yet trading is overpopulated with people who go to great lengths to justify how they were right and the market was wrong. Who cares? Take the money! |
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Not consistently applying tactics. How can the trader guess which signal is best? When you have chosen a good plan, you must take every signal possible. |
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Not preserving capital. Rule number one is to protect your trading "stake." Yet we have seen so many fledgling traders riskand loseit all on just one trade. The saddest words on the trading floor are: "The trade looked so good," or ''I just knew it would come back." |
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Not being in the right state of mind. The trader who is distracted or upset is just giving money away. Stay away from trading unless you can concentrate. |
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How do you overcome these problems? The very best traders always talk about "having the edge." What do they mean by "having the Edge"? The Edge is the overriding capability to deal with what the market presents you with no emotional impact. |
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Say it again! The Edge is the overriding capability to deal with what the market presents you with no emotional impact. |
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That's great, but how do these great traders get the Edge? Consider the chart in Figure 9.1. Compare those with the Edge to those without the Edge. |
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Now that you've had a chance in Figure 9.1 to compare trading with the Edge and without the Edge, use the following questions to review the advantages of proper preparation and mental attitude: |
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Do you see the progression in this chart: from motives ® to goals ® to trading style ® to educated tactics ® to risk control and money management ® to discipline ® to state of mind? |
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