Trade from a Place of Opportunity
Many traders think only of the potential profits they can make in a given trade. In fact, some traders even put demands on how much they wish to make in a year. Contrast this with the professional trader who trades focusing on the trading process and that includes how much money he or she can lose in a trade. Make no mistake, we are here to make money and not lose money. But, when we focus on how much money we can make versus focusing on the process of where we should get in and out of a trade, we are without a doubt putting pressure on ourselves.
Demands we put on ourselves to make money only further limit our profits and quite frankly that is when we are most likely to refuse to take a small loss
and violate our trading plan rules
. When we need to do something or must par-take in the market's shenanigans when the risk to reward is unfavorable, that is when we end up chasing market moves. Or we try and predict where the market will go.
Focusing on demands to make money or putting pressure on yourself to generate profits
is where you will ironically be most susceptible to losses. Think back to a time when you said to yourself that I will make $1,000 in the stock market use that money to pay a bill or buy that new television. The moment you restrict yourself in absolute extremes to make money, you put pressure on yourself. When there is pressure you tend to force things and let losses run.
You feel differently when you are trading with a respectable position size, under control
, and from a place of opportunity versus pressure. The next time you trade, take note of how you feel. Are you trading from a place of opportunity or a place where you feel pressured?
Labels: Finances, Pro Stock Trading Tips