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Chapter 12. Your state of mind (trader's... > Six hurdles to successful trading

Six hurdles to successful trading

  1. Trading for the thrill of it

  2. Trading for revenge

  3. Lack of money management

  4. No well-defined trading plan

  5. Inability to pull the trigger

  6. Inability to admit you're wrong

Condition yourself to be unemotional

If you are trading for the thrill of it, you trade when the conditions favor your methods, and you also trade when they don't. Because you are trading emotionally, you overtrade, which is an inevitable outcome of thrill trading. You also overstay your welcome on trades that are not going your way, and this invites disaster. It might work for a while, but there will come a time when thrill trading will wipe you out, plain and simple. The other side of this is those people who trade for the adrenaline rush but are subconsciously uncomfortable with risk. If you are one of these people, you tend to undertrade or place your stops too close, and this is not a recipe for success either. If you cannot condition yourself to assume the risk of a leveraged market, place your hard-earned money in Treasury Bills and go home. Undertrading is just as fatal a flaw as overtrading.


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