Tuesday, October 23, 2012

Trading Insights

"You don't need to know what's going to happen next" - Trading in the Zone

This was the quote that turned my trading around; from a state of helplessness to a state of certainty. Consider a full time profitable professional trader and a novice trader. The professional trader is able to make money even using a mediocre moving average trading system unlike the novice trader who seems to be seeking for the "holy grail". 

Well, its almost impossible to not fall into this trap. It's easy to blame the system and dump it. Truth is, whether you would readily admit it or not, trading goes far beyond a system. In fact, I can almost certainly guarantee that purchasing a complete system from any vendors in the market would still result in losses. So you might ask, how do I know? Let's put it this way, I was the most optimistic person and went down this road. Remember, you don't need to make the same mistakes as I did to learn from them.

Purchasing a trading system that places the odds of success in your favour is the first step of the long journey towards being a consistent and profitable trader.

Like me, you probably found it hard to devise a trading system that places the odds of success in your favour. Go ahead, purchase a trading system that suits your personality. However, what I am emphasizing is not to buy with the expectation of making immediate profit. Trading goes than having a system in place.

Thinking about Trading

Here are some crucial ingredients that you would need to possess in order to become a consistent and profitable trader:

- Trade management
- Managing emotions
- Psychology
- Your view on trading
- Responsibility
- Complete acceptance of risk

Bottom Line
Trading is more than just buying and selling. On the contrary, it goes far beyond what most people think. Just because you are trading and have put a stop loss in place, does not necessary mean that you have completely accepted the risk of trading. I define complete acceptance as the ability to be responsible for all your trades and not experience any emotional pain regardless of what the market does.

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