TRADING PSYCHOLOGY
Your New Year's Trading Resolutions
Fresh Start
by Adrienne Laris Toghraie
Start off the New Year on the right foot.The past several years have been disastrous for many traders. Even concerted attempts by disciplined traders to follow their own trading rules have failed to produce profits. Why has this downward spiral continued? It is because the markets have changed but many traders are choosing not to acknowledge that they must as well.
Traders are no longer as confident as they used to be; instead, they are embarrassed, fearful, and angry. To reverse the losing trend, they put more and more time into their trading in the belief that working harder will make a difference. However, the increased effort only makes them more frenzied. It is time for a fresh start.
AGAINST STARTING ANEW
If you are a trader who is in a downward spiral, the idea of starting anew may seem unacceptable. You are accustomed to a certain level of income. You do not want to face any more embarrassment. Pulling back now would mean starting over with a new system, and probably making less money for a while. Maybe you invested $10,000 in your current system, plus two years or more of hard work, before it produced a profit. Giving up this system would make you feel as though you were giving up a true friend who has supported you for years. But if a friend is causing you too much pain and loss, sometimes you must let go.
Or perhaps you are hoping the markets will turn around, so you won't be forced to begin all over again. Maybe, you rationalize, the markets will suddenly return to a robust and predictable state. But what if they don't?
...Continued in the January 2003 issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the January 2003 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2002, Technical Analysis, Inc.
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