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Finance > Currency Trading > Trading and Your Personality
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Article rating : 0.00, 0 votes. Author : CT Larsen
Is not a stretch to believe. Most traders like excitement, like life edgier than most. Like their share of thrills, have their appetites and needs to excel. This is one of the personality that would be attracted to trading. But this and this but is big, if you are using trading to satisfy these parts of your personality you are fighting a losing battle.
Successful traders actually tend to be attracted to the duller parts of trading. The mechanical system designers that easily do 'this' if 'that' happens. They are not thrilled with their winnings nor do they despair over their losses. Every trade, every situation calls for certain actions, either liquidation, stop placements, or just waiting, but it is all pre-ordained. Sure there are chart readers, like yours truly, but even then the charts dictate the action needed. While we do not use mathematical equations to impart are entries and exits, we do use charts. We do sit on positions when we would rather not, we do exit when we would rather not, but it is all pre-ordained as well. In short, our observations, our trained eye is our system.
Contrast that with the emotional trader, who goes from ecstasy to despair, in a single week, or day, or even hour. One minute he thinks he has figured out the trading game, with the holy grail of systems, and the next he realizes that all his friends were right and trading is a waste of time, a game you cannot win, not any different than casino gambling,. He was attracted by the appeal of easy money, and was sure he would be the one who would get it.
Well even the most successful traders will tell you, trading is NOT easy money. 50% annual returns may sound too good to be true, but it is not without its share of the full range of human experience. For even the most seasoned, mechanical traders will also tell you, that deep down, they experience the same emotions as the novice. The trick is and always has been not to allow your emotions to effect your trades.
So you can be wildly emotional on the inside. But you had better stick to your guns on the outside. Most weeks, most days, most hours, you are not going to be very happy about your open positions. Most trades will go against you at least one time during their open status. And probably more than once, the unpredictable is always going to happen. The illogical will always have its moment, and yes, you are going to be wrong.
The only smart thing to do about all of this is to learn from it. In fact, if you are not still learning new things from your trading, you have no reason to still be in it. The markets like humans, like the universe evolve. Evolution is the only thing you can bank on, and if you think you do not need to partake in it. Then you will be consumed by it.
To be successful at trading you do not need to always be one step ahead of the evolution of the markets. But you need to be in time with it, to accept its existence.
CT Larsen has been trading stocks since 1990. Now trading large cap stocks exclusively. He has recorded three straight years of greater than 50% annual returns. You can read his blog at http://livingonlargecaps.blogspot.com.
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