Candlestick Trading Blog
October 27, 2009
Stock Market Beginner
| If you are a stock market beginner, I suggest you prepare yourself for the roller-coaster of emotions all traders must learn to control. It is well noted that the markets capitalize on investor greed and fear. Fear makes investors get out of the market at any price, and greed causes them to buy at any price to get in. Your first educational goal should be learning all you can about your trading personality. The psychology of investing affects not only you, but the stock market as a whole. Which illustrates why learning emotional strategies is as important as trading strategies. Are you an overconfident trader? As a stock market beginner, overconfidence can cause you to place too many trades. Confidence is otherwise a great character trait but placing too many trades causes more fees, and can lead to higher tax consequences, resulting in overall lower profits. Are you a “me too” investor ? A common pitfall among new traders is the need to be part of the group. Everyone else is talking about the great ride they’re having on stock XYZ, causing you to feel a bit left out. Resist that urge to jump in and force a stock trade. Anyone can run with the pack. You want to lead the pack. Are you a “late joiner”? Do you follow an investment on your potential trades list, only to watch the prime entry point pass by? Does that missed opportunity chew away at you until you join in way too late? You will find more trading prospects than you can possibly watch at one time. Successful stock investors understand the importance of following a proven trading strategy. We are not suggesting that you strip yourself of all emotions. That wouldn’t be good either. Rather, learn to recognize both positive and negative feelings, and make yourself aware of how they affect your stock trading decisions. The best investors, and ultimately the most profitable, learn to balance these sensations and even put them to good use. Don’t let your investing career get cut short because you didn’t learn to handle your emotions as you trade. Join us October 29, 2009 at 8:00PM Eastern Time as we welcome Adrienne Toghraie presenting the Evolution of a Master Trader on our free public stock chat session. (Or, listen to the recorded archive session) Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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