Studying The Worst Trades Will Change Your Trading Experience!
I know it'll make you grimace but browse through your trading notebook for the worst deal you've ever had.
Examine the trading arrangement you observed. Consider what went wrong, and then ask yourself, "Why did I ever accept that trade in the first place?" "What was I thinking?". "Was I even thinking?" is a more pressing question.
That transaction was most likely taken automatically based on a familiar setting. Your judgment was based on your own thoughts rather than what the market was telling you in this situation. Your worst deal doesn't have to be the one in which you've lost the most money.
When you hesitate to accept what could have been your trade of the year, or when you lock in profits too early instead of letting it ride, it can be a squandered opportunity. You may have backed out because you were afraid of losing, even if the markets indicated that this next investment would be profitable.
Maybe you'll look back on your worst transaction and realize you did it because you grew so used to losing that you started mindlessly taking trade after trade to make up for your losses.
In this situation, you insisted that you were correct and that you would finally outperform the market. Remember that revenge trading may become a bad habit that can lead to big losses if not addressed. The typical reaction to disastrous deals is to just shrug them off.
It's simpler to bury the memory of a terrible transaction to the back of our minds, much like the memory of being rejected by crushes in high school (not that it happened to me all that often), and falsely comfort yourself that you'll prepare better next time, and then go on to the next deal. That isn't enough, though!
You must go deeply into the issue and go over every detail of your terrible deals. You run the danger of repeating your mistakes if you don't.
You must force yourself to open your trade notebook and ask yourself questions such, "Why did I do the deal?" no matter how difficult or unpleasant the effort is.
"Did I close my trade based on legitimate signals?"
You might be able to spot a negative trend in your behavior and take steps to remedy it if you force yourself to recognize the emotions you felt when you made poor trading selections.
It might be tough to break poor habits and trading practices, but it will get you one step closer to managing your emotions and becoming a better trader.
Even though the title says for all the newbies, this is applicable to all the market participants regardless of their experience. Remember, the sky is not the limit anymore!
Examine the trading arrangement you observed. Consider what went wrong, and then ask yourself, "Why did I ever accept that trade in the first place?" "What was I thinking?". "Was I even thinking?" is a more pressing question.
That transaction was most likely taken automatically based on a familiar setting. Your judgment was based on your own thoughts rather than what the market was telling you in this situation. Your worst deal doesn't have to be the one in which you've lost the most money.
When you hesitate to accept what could have been your trade of the year, or when you lock in profits too early instead of letting it ride, it can be a squandered opportunity. You may have backed out because you were afraid of losing, even if the markets indicated that this next investment would be profitable.
Maybe you'll look back on your worst transaction and realize you did it because you grew so used to losing that you started mindlessly taking trade after trade to make up for your losses.
In this situation, you insisted that you were correct and that you would finally outperform the market. Remember that revenge trading may become a bad habit that can lead to big losses if not addressed. The typical reaction to disastrous deals is to just shrug them off.
It's simpler to bury the memory of a terrible transaction to the back of our minds, much like the memory of being rejected by crushes in high school (not that it happened to me all that often), and falsely comfort yourself that you'll prepare better next time, and then go on to the next deal. That isn't enough, though!
You must go deeply into the issue and go over every detail of your terrible deals. You run the danger of repeating your mistakes if you don't.
You must force yourself to open your trade notebook and ask yourself questions such, "Why did I do the deal?" no matter how difficult or unpleasant the effort is.
"Did I close my trade based on legitimate signals?"
You might be able to spot a negative trend in your behavior and take steps to remedy it if you force yourself to recognize the emotions you felt when you made poor trading selections.
It might be tough to break poor habits and trading practices, but it will get you one step closer to managing your emotions and becoming a better trader.
Even though the title says for all the newbies, this is applicable to all the market participants regardless of their experience. Remember, the sky is not the limit anymore!