The two biggest driving forces of human emotions are fear and greed.
Fear often comes from the unknown. We don’t know what’s going to happen in a situation so we’re fearful of a bad outcome. Or we’re fearful we may have made a bad decision. On the tail of that is the fear of loss.
How Do You Handle Fear and Greed?
When you’ve conquered fear and greed, you can “pull the trigger” with confidence.
Four things about fear.
First, a definition. Fear is negative imagination…the assumption that an outcome of any action will be negative. And greed is just the flip side of the same coin. It is fear of success, not failure!
You can overcome fear and greed. Become familiar and confident with the understanding of what causes you this fear. Analyze all the issues. Note how you feel before, during, and after an event.
Lack of confidence in your system often forms the basis of your fear. You get confused when you get conflicting signals from different trading programs, gurus, time frames, etc..
Until your conscious mind and your subconscious mind agree on your approach, you will not trust the signals you see, and either hesitate, jump to soon, or freeze totally. This is caused by the uncertainty you feel.
No one can predict the future. You can only intelligently guess with some level of probability that a certain outcome will occur. Because trading is really trading the psychology of thousands of traders from around the world, it’s important to understand that that psychology goes through fairly predictable patterns.
The Bible says the Love of money is the root of all evil- not money itself. Money is a tool we use to get the things in life we need to live and enjoy ourselves.
Don’t let greed overshadow your training and fool yourself into not following the signals.
Yet all of these fears can be conquered simply through preparation.
Greed is deceptive. It clouds your mind with illusions of greatness. You begin to turn a deaf ear to your mentors when they exhort you to be cautious. You’re in a state of denial.
This leads to…
The belief you can’t lose
Over trading
Taking too much risk for your account size
The false confidence that every trade will be a winner
Of course, it goes without saying, disaster becomes the final result.
Check out a realistic plan for trading profits.
Consider the example of Sam Walton, the founder of Walmart.
Though he was a multi-billionaire, he drove the same old pickup truck he’d always owned. Even in his later years he still found great pleasure in working the cash register at one of his stores. He always flew coach.
He learned to control money instead of money controlling him.
Then there’s Warren Buffet, one of the richest men in the world.
He owns some of the same stocks he’s had since he first started – over 30 years. He still lives in the same house he purchased in 1965 for $35,000. He never makes a stock buy or sell without a lot of research and preparation. He ignores the whimsical psychology of the market.
Fear often comes from the unknown. We don’t know what’s going to happen in a situation so we’re fearful of a bad outcome. Or we’re fearful we may have made a bad decision. On the tail of that is the fear of loss.
How Do You Handle Fear and Greed?
When you’ve conquered fear and greed, you can “pull the trigger” with confidence.
Four things about fear.
First, a definition. Fear is negative imagination…the assumption that an outcome of any action will be negative. And greed is just the flip side of the same coin. It is fear of success, not failure!
You can overcome fear and greed. Become familiar and confident with the understanding of what causes you this fear. Analyze all the issues. Note how you feel before, during, and after an event.
Lack of confidence in your system often forms the basis of your fear. You get confused when you get conflicting signals from different trading programs, gurus, time frames, etc..
Until your conscious mind and your subconscious mind agree on your approach, you will not trust the signals you see, and either hesitate, jump to soon, or freeze totally. This is caused by the uncertainty you feel.
No one can predict the future. You can only intelligently guess with some level of probability that a certain outcome will occur. Because trading is really trading the psychology of thousands of traders from around the world, it’s important to understand that that psychology goes through fairly predictable patterns.
The Bible says the Love of money is the root of all evil- not money itself. Money is a tool we use to get the things in life we need to live and enjoy ourselves.
Don’t let greed overshadow your training and fool yourself into not following the signals.
Yet all of these fears can be conquered simply through preparation.
Greed is deceptive. It clouds your mind with illusions of greatness. You begin to turn a deaf ear to your mentors when they exhort you to be cautious. You’re in a state of denial.
This leads to…
The belief you can’t lose
Over trading
Taking too much risk for your account size
The false confidence that every trade will be a winner
Of course, it goes without saying, disaster becomes the final result.
Check out a realistic plan for trading profits.
Consider the example of Sam Walton, the founder of Walmart.
Though he was a multi-billionaire, he drove the same old pickup truck he’d always owned. Even in his later years he still found great pleasure in working the cash register at one of his stores. He always flew coach.
He learned to control money instead of money controlling him.
Then there’s Warren Buffet, one of the richest men in the world.
He owns some of the same stocks he’s had since he first started – over 30 years. He still lives in the same house he purchased in 1965 for $35,000. He never makes a stock buy or sell without a lot of research and preparation. He ignores the whimsical psychology of the market.
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