It's been a busy June with the school holidays, friends visiting from China followed by friends from Thailand that I couldn't find the time to update my blog.
I just don't seems to have enough time, scalping is taking up too much of my energy especially against the machines. I'm getting tired, need a break, my mind is blank.
My home laptop is giving me problem, constant reminder that the harddisk is going to crash, I can't even publish my post, can only save now and publish them in the office.
I just wonder whether those previous lessons were too boring, sorry for not being able to express them well.
Sunday, June 26, 2011
Sunday, June 5, 2011
Lesson No. 9 - Emotions
Read today's Sunday Times about an article on the Ups and Downs of Forex Trading, how a Mr. Wong made $600,000 with a initial capital of $100,000, fantastic, then up his trading size and lost all together with an additional $700,000 that he put up, amazing. Total loss of S$800,000 in just 4 months. I admire his guts. Would you call this trader a gambler?
He shared that 60% of your time, energy and attention should be focused on managing your emotions, 30% on money management and 10% on your strategy. (His opinion)
What are the emotions that affect our trading?
Fear
Greed
Hope
Anger
Worry
Ego
Stubbornness
Overconfidence
Being human, we are definitely emotional creatures and traders have to really make an effort to control his emotions in order to stay calm. The most effective way is to have a plan, knowing what action to take just in case the unexpected happens.
It's very simple to draw up a trading plan but extremely difficult for most traders to follow up, thus they become shorter and shorter term traders, weaving in and out of the market. It's perfectly fine if they are scalpers knowing what is their edge and able to consistently make money.
For Day Traders, make an effort to trade your plan.
He shared that 60% of your time, energy and attention should be focused on managing your emotions, 30% on money management and 10% on your strategy. (His opinion)
What are the emotions that affect our trading?
Fear
Greed
Hope
Anger
Worry
Ego
Stubbornness
Overconfidence
Being human, we are definitely emotional creatures and traders have to really make an effort to control his emotions in order to stay calm. The most effective way is to have a plan, knowing what action to take just in case the unexpected happens.
It's very simple to draw up a trading plan but extremely difficult for most traders to follow up, thus they become shorter and shorter term traders, weaving in and out of the market. It's perfectly fine if they are scalpers knowing what is their edge and able to consistently make money.
For Day Traders, make an effort to trade your plan.
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