Trading Psychology Lesson –

The Key to Successful Trading - Know Who You Are – by Robin Dayne

This topic may sound a bit strange but in reality it can be very powerful when a trader can admit to their weaknesses and be totally honest about, who they are.

Unfortunately we all have our weaknesses but in many other occupations we have learned to adjust to them or cover them over. Let’s say you have an anxious personality and that things have to be done right away. Well this may come up now and than and even be an asset in another work environment but in trading it WILL have a direct impact on your trading entries.

Firstly, most new traders are not aware that trading brings to the surface ALL their emotional baggage whether they want it or nor not. Second they’re unaware it’s having a direct effect on their trading and third they have no idea how to fix it.

So here’s the key, be totally honest with, who you are, by noticing what is happening and taking responsibility for it. Having a weakness is OK but the important part is to find a solution and work on what needs to be changed as soon as it’s uncovered.

Let’s go back to the anxious trader example. Most likely this past asset is causing entries that are too soon or not at the best price point, subsequently this will have an effect on the profitability of the trade as well. This trader will need to work on their patience at the precise time of the entry. So how do you do this?

Here is where the power of questions will come in. Once you know the problem you must work it through to a solution.

So the question is; What can do in this moment to be more patient?

Possible Answers:

1) Set up my indicators so they give me a precise price point – this will create and confirm my “certainty” on the entry

2) I could place my entry at a specific price point and let it take me out automatically instead of waiting to place the trade on my own or where I think I should get in.

This takes the guess-work out and doesn’t give emotions a time to take hold, forcing a reaction.

This is primary reason many traders gravitate to automated systems because being automated doesn’t give the emotion a chance to grow.

So bottom line questions can be your best friend because they temporarily put a stop to emotions.  Why? When you ask your brain a question it has to stop and search around for the answer. Use questions in your trading to stop emotions and also work each challenge through to a solution.