Go to Top

Playing With Fire

http://mmma.org.uk/members/?co=aida-srl-uk-branch As you trade the markets, it’s vital to trade calmly and with confidence. If you constantly worry about failing or losing money, you will sabotage your efforts and end up losing in the end. That said, you don’t want to be too overconfident. The overconfident trader is the naïve trader. In the back of your mind, you should always remember that trading is like playing with fire.

see At a party last month, I was talking with a young woman about her retirement plans. She made a good salary, but not high by any means. She proudly told me that she had saved and invested $50,000 in the markets. Unfortunately, she seemed to also think that the markets were as secure as a bank account. Understandably, she became a little perturbed with me when I suggested that she was taking a potentially huge risk, and could possibly lose a few years worth of savings if the market had turned dramatically. My point isn’t to pessimistically deride the markets, but to point out that trading requires risks, and taking risks doesn’t always work in your favor.

buy provigil in mexico Based on my experience as a Peak Performance Trader Coach, it is a fact that not everyone can trade successfully. As we have pointed out in numerous columns, many are called to the trading profession, but relatively few end up profitable in the end. It is important to remember that you are taking a risk and that you can lose. You must look at your financial resources, innate trading talents, get educated and be committed, and find a trading or investment approach that matches your resources and abilities. For some, that may be short-term trading, and for others, that may mean long-term investing.

If you are a novice, short-term trader, you may not want to jump in headfirst until you get educated properly.  You can attend our free workshops or attend our classes for free for 10 days. You may want to paper trade or make small practice trades to gauge your skill level before risking years’ worth of savings. I would recommend that if you are going to dabble in the trading game, make sure to risk money that you could afford to lose. Again, it may sound pessimistic, but losses are commonplace when trading. For your own safety, you should prepare mentally and physically for a worst-case scenario, and make sure you can live with the consequences. Decide how much you can afford to lose, and if you do risk money, use protective stops or other financial instruments to minimize your losses. If you have trouble handling stress, or have trouble controlling your emotions while under pressure, you especially want to limit your risk, and may want to consider long-term investing rather than short-term trading. But again, the key is to be aware of the downside.

Trading is a rewarding activity. It is intellectually challenging and if you have a knack for trading, it can pay off financially as well. But trading isn’t fun if you lose so much money that you can’t recover. Trading is a lot like playing with fire. If you aren’t careful you can get burned badly.

, , , , , , , , , , , , , , , , , , ,

Leave a Reply