Tuesday, October 28, 2014
Keeping fit : Physically and Mentally
The Trading Mindset Exercise
Unfortunately, many people who start trading find success difficult to achieve, certainly in the period of time immediately after starting. Trading is a challenging endeavour that has torn people from all across the world across generations, from every extreme of their emotions. It is our money that is directly involved in trading and therefore at risk, and the potential of making more money is our primary motivation for beginning this undertaking.
Therefore any emotions that we may associate with other endeavours are heightened because money is something that seems to accentuate any natural human emotions that we have. Ironically, it is the money that encourages the vast majority to attempt to trade yet it is the money that causes most people to fail.
In his book, ‘Trade Your Way to Financial Freedom’, the renowned American psychologist Dr. Van Tharp discusses in several parts how important your psychology or mindset is to your trading success. He graphically depicts the significance of your psychology using a pie chart and explaining that there are three ‘Ingredients to Trading’. They are System, Money Management and Psychology. In the pie chart, the System is 10%, Money Management is 30% and the remaining 60% is psychology.
Note : My trading is 20% Method, 30% Management and 50% Mindset. This is oppose to what the majority of those newbies or novices think. Most people attended courses to learn technical-analysis and more indicators. Ridiculous. That is only 20%(or 10%) of what is needed in trading. Focus in YOUR MINDSET ... it is what inside your head and emotion that is playing you out. Not others. So, control that ... and you will be taking first step to be a better human ... a better trader.
Why does a psychologist who has spent his entire professional life counselling traders of all experience levels say that so much of your trading hinges on your psychology?
The key is that your mind drives everything you do in your life and trading is no exception. Your emotions are a part of who you are and your decision making process. Decision making is a large part of trading, as you need to make decisions often and many of them are difficult decisions. Furthermore, people like to break rules, even ones they set themselves.
Taken from : http://www.trading-plan.com/mindset_exercise.html
To be a better trader, I need to be fit. So, time to get back to my cycling.
Next year 2015 is nearing ... I have so many things to prepare myself, to be good trader as I wanted to be.
Time to stay focus ... and check on things I needed.