Whatever markets you trade, having the right mindset is critical to your success. I've been mentally preparing myself as we enter into what could be an extremely volatile week/month. The ability to develop a sound trading psychology and to blend that psychology together with your trading method is the key to success. My four guiding principles going into this month are:
1. Wake up early. Be aggressive.
2. Cut your losers short and let your winners run.
3. Uncomfortable with a trade? Get out, because you can always get back in.
4. Don't ever feel you are very good at trading. The second you do, you are dead.
This may seem overly simplistic to you, but the simple aspects of trading are usually the hardest to master. Finally, I've been reading several of Martin J. Pring's books lately, and a quote from one of them really stood out. I've been pondering about why the equity markets are trading at their current levels, given that I believe the market fundamentals currently warrant equity indices at significantly lower prices. In order to understand why equity markets are trading at elevated levels, you must first understand the short, medium, and long term bullish views of market participants. If you put yourself in their place, you will understand the key factors that have the potential to spark a reversal.
"There is no point in bucking the crowd just for the sake of being contrary. Good investors need to rationalize why the crowd might be wrong and what the alternative outcomes are likely to be. These investors therefore have the ability or knack to justify their contrariness." - Martin J. Pring, Investment Psychology Explained
Good luck trading this week and feel free to join us in our Free Live Trade Room.
BeamFX is a guaranteed IB that introduces exclusively to Institutional Liquidity (ILQ).
No comments:
Post a Comment