Are You Calmed and Relaxed When You Trade?

Posted in Trading Commentary, Submitted by Trading Critic on Tue, 2006-05-16 04:08.

Although it's unpleasant to think about, it's worth considering the worst-case scenario, and making a detailed plan to recover should it happen. It's just one strategy for learning how to trade in a carefree manner so that should you face a severe financial setback, you can recover from it. So-called "trading in the zone" requires intense concentration and focus, and it's difficult to maintain this stance when the pressure is on you to perform. Thus, you must do whatever you can to reduce the perceived psychological pressure. The most obvious way to relieve such pressure is to think in terms of probabilities and carefully manage risk. It's useful to remember that you may not win on any single trade; but after a series of trades, you will have enough winners to make a profit in the long run. It's also important to manage your risk. Determine your risk up-front and risk only a small amount of trading capital on a single trade. Doing so will ease a lot of the pressure, allowing you to be more open to see the opportunities that the market offers. Don't crack under the pressure of a potentially mortal financial defeat. Consider the possibility, and be ready to recover from it.

Joe Ross Trading Educators Inc

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