November 29, 2006

How To Become a Winning Trader

For those of you who golf, you know that there can be 15-20 small things you need to do to have a perfect and consistant swing.

When you watch Tiger Woods he has the text book perfect swing.  Even if you are not a golfer, it is easy to see why he is so great.  Everything he does appears effortless.

You also can't help notice that he is so intensely focused.  Talking about "being in the zone"!  I don't think my man Tiger would even blink if a earthquake started shaking the golf course.  That's how focused he is.

But guess what?

Take just a few of those key ingredients out of his swing and Tiger is now going to be more famous for hitting his balls into the woods!

Trading is the same way for me.  I have had periods where it is effortless and I am feeling like the 'Tiger Woods of the markets'.   I have had 18 winning trades in a row,  gone 22 for 23 and one occassion 27 for 30.  

BUT…

I have undone my winning streak  in a heart beat by simply neglecting to incorporate a few key ingredients into my 'trading swing'.   I simply beat myself by doing stupid things like:

  • Not getting out of my losers quickly and decisively
  • Forgetting to put in a stop loss order
  • I meant to hit the sell button and instead bought

As I have mentioned in a previous article, 90% of traders beat themselves.   In a nutshell here are the main reasons why.

1.  They get careless.  
2.  They bend the rules.
3.  They ignore the rules.
4.  They lose focus.
5.  They lose emotional control.

Obviously each of these has several pieces to them, but when you learn to not do these things on a regular basis, then you will have the 'perfect swing'.  NOTE: In future articles I will teach you how to avoid each of the problems mentioned above and how to master them.

If you put in the time to truly master your 'trading swing' and master yourself,  then I can promise you that you will raise your trading game up to a level you never thought possible.

And when you get in the the groove, I swear you just might feel like Tiger Woods walking down the 18th fairway of the British Open to a cheering crowd!

Peace & Prosperity!

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