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     TRADING SYSTEM
 
 
   WELCOME || TRADING SYSTEM || TRADING SIGNAL || PSYCHOLOGY || PORTOFOLIO SIZE || TRADING PHASE ||
    STOCK PICK HISTORY || INVESTMENT BASIC || WEIGHTAGE ALLOCATION || GOLDEN RULE || PE MYTH

TRADING PSYCHOLOGY

Trading psychology is a subject that experienced traders consider important, if not critical, and beginning traders generally consider of little interest and value.

Make no mistake about it my friend.  Are you Ready? Each day is a new day & those who don't like it had better get used to it because self-empowered traders are here to stay.They have experience of the following:-Over Coming Traders Block,The Psychology of Winning, & Mental Status.

The investment in awareness is finest investment  that one can make it.
Self- empowered traders have expirenced the following:-
  Over Coming Traders Block.
  The Psychology of Winning.
  Mental Status .
1)OVER COMING TRADERS BLOCK

Proper trading, in may respect, is a by-product of power " thinking".

  • We have to learn that, in Stock Market " You do not trade stocks, you trade people".  This is because knowing what to do is no guarantee that you 'll do it. because 80% of the trading game is psychological in nature, we would like to highlight  some of the psychological and emotional challenges that every active market participant must face.
  • Trading system that we have discussed or you have developed will have little to no value if the mind behind those techniques has not been properly prepared. Proper trading is proper thinking.
  • Why aren't you making  any Money, when you have done every thing you can think of to profit from trading. The problem is not with system. I have met many  Knowledgeable traders & investors  with good  trading method who despite of all that are unprofitable Why?
  • Lack of success often has to do with  traders action rather than his method.
  • Some Traders are afraid to pull trigger,While other have no trouble to get into the trade but take there profit too quickly.
  • Many simply over rides there  methods for emotional reasons.
We refer these tendency as Traders Block.
I have closely seen users of many sophisticated Technical Analysis Software who have designed template with high system of percentage of winning trade. However still they have been struggling to profit from and seem to be stuck  at that point year after year.

FORGET THE SYSTEM:- For most of the traders the answer is not the new system , an emotional upset can be a problem for almost every Trader, but most trader fail to realize that  they can improve there trading result by improving there emotional well- being. Trading of Stock is a Business in which  timely awareness is  most important aspect of success, the investment in awareness is finest investment  one can make it.

IT'S YOU:- Many traders assumes that  when they perform different task, they actually behave differentially for each task. The assumption is created by the varying circumstances and rule of behavior in each arena, but one thing remains constant  it's YOU. Improving your self not only improve your trading but all areas of your life.

2)PHYSICAL, EMOTIONAL & SPIRITUAL
There are several area in your life for you to examine your physical health and conditioning, emotional and behavioral area and spiritual life.
Physical:- It is body that support  our mental and  emotional states. Trading can be intense  emotional and mental activity and the intensity takes its tool. It is important to keep your body in excellent condition. Many traders stress themselves by excessive  alcohol, too much of technical Analysis, Extended Stay at night to watch NASDAQ & DJIA, poor nutrition and no rest. This ads to the stress  That your body is subjected to with trading. To balance the intensity of trading and maintain the awareness I find that three types of exercise are needed.
Excerise includes
1
Aerobic, Dance
2
Gymnasium: Strength
3
Flexibility
4
Yoga
5
Swimming
6
Tennis
7
Gardning
8
Tracking
And many more which you feel relives stress and strain.

Every movement the market is opened there are winners and losers, opening and closing trades. Some where out there is another trader with talent similar to yours. If you are physically fit it will add another dimension to the awareness and you can take many more trades without stress.

Mental & Spiritual Conditioning:- We recommend Mediation for various reasons. over last 30 Years there have been untold no of scientific studies on mediation  in general and thousand on TM  specifically. These studies have verified that mediators experience broader awareness and greater clarity while increasing there ability to concentrate both of them are useful things to traders.

In the emotional arena, mediation has been shown to be an effective mechanism to relieve stress. Since trading stress is most powerful stress physically that traders have to deal with then reducing that stress is likely to increase traders ability to remain calm in ever changing winds of the market.

Spiritual  Conditioning:- Here what we are looking out is having life outside of trading. Most of the traders posses spiritual  components or discipline in there lives.  A trader by religion might be Hindu, Christine, Jew, Muslim  it does 'net seems to matter what it is. Most common thing is to what degree these traders are involved. if your spirituality consist of Watching Cricket, Coaching a Swimming / singing, yoga classes or a rotary member for social welfare etc which might find comfortable with will improve the spiritual effectiveness.

Just Plain Work:- Before you enter a trade, you should know why you are going to trade. Many traders have a technique they like. if you don't study back test and study some more. One can paper trade to achieve 90 % success and then start with small lots to test the emotion this is because trading is all about emotions. Discipline :- record every trade you make, Record your emotion and physical state, Record the trade which you don't take and why, Record every thing you can think of. This will help to separate reality from fantasy. If you record everything then your memory cannot play  tricks with you. this is the best way to gain confidence in your system to help you stop from loosing.

If you don't know what to do get out of the market and review old result and keep watching the people what they do differentially. List what you do it rightly and list what you don't do it rightly and then adjust your system accordingly to begin trading again.
THE PSYCHOLOGY OF WINNING
In Stock Market many traders & Investors, including myself, have experienced periods of loss that create the wrong mental state necessary to stay on a consistent path of success. As a trader, you must learn to balance all of the emotions and issues that influence success by asking  and answering each of the following questions:
  • When I win, how do I respond? What is my psychological state?
  • When I lose, how do I respond? What is my psychological state?
  • How can I avoid extreme psychological highs & Low and strike the balance?
Trader or Investor who is a  beginners or experienced on his side  must have a clear plan in mind for dealing with success. At times  feeling of winning  causes traders to become careless and then trade over trade with over confidence ignoring market indicators or language. This feeling of Golden Touch Trading Rule will drive him to loss and if not taken care off there exist potential for Big loss which increases exponentially. When ever I start getting the  feeling of winning I reward my self, for a week end picnic  to enjoy Roller Skating and Swimming or a good diner. This build's and gives a strong foundation for the success there by increasing self confidence and self - reliance.While winning is everybody's ultimate goal, learning to effectively handle losses is equally important. Professional trader not only has systems, methods , discipline and consistency for winning but has records, procedure to review loss making trade and educate to avoid these mistakes again all with positive mental approach.When you have a trading success no matter how you trade, it works. This may at times lead to psychological high or laziness that can be very dangerous. When ever one reaches this level he has to stop out trading any further.However dealing with periods of psychological low is the toughest one. During this period One has to alter and have predetermined set of rules to look differently. Should one experience  a set number of losses or else what ever you do leads to loss, he or she should quit take a break for a specific time frame and  take up any thing which is stress free that can completely separate individual mind set from trading. Personally I use Gardening Roller skating which  separates me from the market, temporarily without any communication and allows me to open my eves and think differentially there by getting To strike a balance between Psychological High and Low one has to follow a plan and not only recoup losses but accumulate the profit as well. Get start the next Day with fresh mind set up.
MENTAL STATE

Decision are easy to take in detached and unemotional state of mind:-

Individuals have experienced that when they advise others they are right many times but when they put it to uses them self  it is hard to follow. Many new comers and losing traders believe that good proven system is all that is needed for success. It is not so, unless you feel you are in control.

  • It is the link from the mechanical approach to the enhancement of your mental approach for developing winning, daring and confident attitude each trading day.
  • It is the mental state when you are happy, rested alert for any challenge that will let you trade effectively and feel in control.

Do Keep your emotions in control for trading and wining:-Greed & fear for  profit/ loss position should not interfere with your ability to make effective decisions, thinking should be clear on any stage of any trade you take.

  • A trader that experiences strong emotions loses the ability and vision to see the  clarity and reality of the trade.
  • Beginners feel grate when they paper trade with,  say, 80% accuracy. However, when  it comes to actual trading, they are under so much pressure because money is too important to them. This realization of internal  psychological pressure need separation.

When you do not have focus on money trading is more profitable and fun.. Like wise if you  define a winning trade as per the right pattern easily without tension money start flowing to you. However if tension starts flowing to you money might not. They form apposite poles of the trading.

Difference between a winning trader and a losing trader is the ability to take right action:- Right knowledge, Required trading capital, Technical Analysis Software, Good Data Feed, No external interference are all good however ability to take action at right time separate winning trader and loosing trader. In trading price pattern and signal as per the trading system form quickly and require disciplined automatic response on trading signal.

  • Quickly responding to signals and a deep need for action when you really should not take a trade must be dealt with by every day trader
  • Another problem is not taking action at all , even when valid signals tell you probabilities are on your side. This is because you believe that not taking a trade will be less painful than taking the trade.

A trader must trade on valid signal and change from fearing to take control of the trade and react.

Trader who is not able to execute a trade is unlikely to be successful at trading:

- Successful trading is directly preoperational to right signal and amount of confidence to take a trade and inversely preoperational to fear you brain generate.

  • Fear is not the market but the inability to act when you need to.
  • Learn what to fear and realize if you are free to act or not.
  • Market cannot do anything  to you that you don't allow.
  • Loosing traders dream of wish, hope and wait for the market reversal every second and a minute contributing to loss.

Best way to face is change your self to adjust the market  requirement.

Ability to act is based on your mental state at exact moment you have to take a trade:-Every trade is a new trade. Start with a clean mind for a new trade. by disciplining  your self to act fast to get out of a losing position, executing it to the best of your ability.

  • Successful traders maintain right state of mind.
  • Success as a trader will be achieved when the probability of successful trades outweighs the probability of losing.
  • Success is unlikely to come without consistency.
  • Market becomes your friend which you respect and understand but never fear of.
  • When trading becomes natural part of life, the source of joy.