Do Stock Traders Have a Psychological Advantage over Currency Traders

[Guest contribution provided by Forex Traders]

It was Warren Buffett that once stated, “To invest successfully over a life time does not require a stratospheric IQ, unusual business insights or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” Mr. Buffett has distinguished himself as one of the greatest “value” investors of all time, but his wisdom applies if you are a long-term, “buy-and-hold” investor or a trader looking for short-term gains when opportunities present themselves.

To be successful in any of today’s trading markets, experts will tell you that knowledge, experience and emotional control are the most important factors that matter, and the latter may be the most important of all. Traders will practice endless hours perfecting their various trading plans, reducing them to simple steps to be followed while in the heat of battle. Having a fine-tuned plan that has become ingrained as routine habit is the only tried-and-true way for blocking the mind from unnecessary intervention, especially when the need to close a position is at the top of the agenda. Is this psychology of trading the same in all market venues?

Over the past decade, the popularity of currency trading has swept the investment community and wooed many a stock trader over to its special style of investing. As many have found, however, the forex market can be especially cruel in handing out its own form of justice for the ill prepared, inexperienced, and impatient throngs that have rushed to this new medium. Failure rates are reported to be 70% and higher, thereby suggesting that some subtle differences are at play in this genre that unwary stock traders have somehow missed in the transition.

Both markets support day-trading strategies, as well as position traders. Technical analysis skills are easily transferred from both worlds, providing the necessary guidance for selecting optimum entry and exit points, free from emotional involvement. From a psychological perspective, both markets demand that you have a detailed plan with logical steps that cordon off your mind from messing with your “intellectual framework”, but “fear” still raises its ugly head in each genre, but in differing manners.

With stocks, you must worry about the management competency of a company, if its financial records have been manipulated, or if inside information has been leaked. Potential bankruptcy is also an issue, and what goes down may never come back up. In the forex world, currencies cannot go bankrupt, and even central banks have difficulty trying to influence this market from the inside. However, the massive size of the forex market, some $4 trillion daily, and with 80% of the volume related to speculation, every little bit of information can cause massive gyrations in an instant as global opinions are formed and a new equilibrium is established.

Volatility in both markets provides the opportunity for trading, and from a scientific standpoint, stocks are technically two to three times more volatile than currencies. Currencies, however, tend to change directions more rapidly than stocks, another form of volatility, and it is sensitivity to this other market characteristic that generally requires a defter touch and quicker ability to shift without emotions getting in the way. It is for this very reason that forex brokers provide free “demo” accounts to practice with virtual cash and real time quotes to build confidence and consistency and to learn the nuances of this extremely fast-paced market vehicle.

Warren Buffett also pointed out, “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

Tags: best forex brokers, forex currency trading online, Forex trading psychology, stock trading plan

Trading Psychology Article - Stressed? Overwhelmed? Nervous? 3 Helpful Things In These Turbulent Times

August 12, 2011 by admin · Leave a Comment
Filed under: stock trading, trader training, trading psychology

Are you feeling stressed out with all the horrible and forboding news lately?

Are you feeling overwhelmed with all your responsibilities on top of your trading?

Are you nervous about your ability to survive and profit in your trading?

Well then you are NOT alone.

I’ve been getting a lot of emails over the last few days from subscribers that are really on the verge of panic with all that’s going on, both in the financial markets and in the world in general.

It’s quite understandable too.

Some of the events are pretty scary since there’s not really anything an individual person can do anything about, and they’re certainly hard to ignore.

Fortunately, there are a few things you can do,

A few matters which ARE within your control which you can address to make a difference in your world.

1. First, keep things in perspective and use your ability to think strategically and NOT just tactically.

Remember, the markets are people responding to events.

To help restore your confidence if it’s been shaken, watch this video

In turbulent times like these, you’ve got a lot of people that are very fearful and emotional. On top of that, the events that trigger the response patterns are occuring more frequently, plus people (the markets) are a bit over-sensitive compared to ‘normal’ conditions.

This makes for circumstances where things are even more unpredictable than usual.

So how might you approach this predicament?

Apply some strategic thinking.

Take a closer look at your system, particularly at the reasoning that it’s based on, the current climate (high volatility, overly sensitive masses, etc.) and consider if it is really suited to these circumstances.

It may be a solid system during less volatile times, but if you’re going to trade, maybe this system should be put on the shelf for now.

For example, if your system is dependent on a high winning percentage and / or nice ‘trending’ price action, then this might be asking for trouble.

It might make more sense to stay on the sidelines until things settle down if you’re not confident in your system to perform reliably when things are like this.

I know there are a TON of traders that would have been better to be OUT of the markets during 2008 and 2009.

Remember also to NOT antagonize yourself with the wild market moves, focusing on the money being made and “missing out” on it. That causes many traders to trade recklessly and get seriously hurt.

2. To help address feeling overwhelmed, here’s an article I just received this morning that very nicely details a method I’ve used myself for years.

Download the pdf here (no optin required)

On that page you’ll see several different resources, but the pdf is right there for you.

3. If you’re nervous about trading in these turbulent times and not sure what to do with things all crazy again, and you want to be able to trade with some confidence, knowing that you can deal with the changing marketplace and economic climate, then here’s what to do to alleviate your anxiety the right way.

Change is inevitable, whether driven by specific events or just the natural evolution of things, so you absolutely MUST have a solid process to ADAPT.

Randomly making changes is one thing, where you simply ‘try’ one thing or another, hoping that something will work, but that’s not a very wise way to conduct your trading business.

The much smarter way to be is to make changes in a very calculated and business-like manner.

This is the ONLY way to make sure that you keep moving in the right direction without just throwing money at it.

Trading scared or nervous is NOT the way to trade.

This is serious business and challenging enough when things are ‘normal’.

If you’re feeling anxious about trying to trade in times like these, then put yourself in the position to have a very well-founded confidence, the kind of confidence you need to keep your cool and trade smart.

Remember, by having a specific PROCESS which includes adapting in a wise manner counters that anxiety by replacing it with confidence.

Gain the skill-set that gives you that rock-solid confidence

Cheers & Happy Friday!

Brian

P.S. Don’t just sit there thinking that ‘focusing on discipline’ and following your rules will save you in times like these.

Apply your reasoning and take appropriate action to effectively deal with the situation and make it a positive one rather than a repeat of 2008 and ‘09 when so many traders took a viscious beating.

Here’s another video that has been tremendously helpful for hundreds of traders.

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Psychology of Trading Stocks - The 5th Source of Self-Sabotage

June 8, 2011 by admin · Leave a Comment
Filed under: Day Trading Forex Currency, stock trading, trader coaching, trader training, trading psychology

It’s been right under your nose and you didn’t even realize that it has been directly interfering with your ability to trade profitably.

We’re talking about the 5th source of self-sabotage.

Hopefully by now you’ve probably heard me explain how most of the issues that traders encounter are NOT a matter of discipline, but really self-sabotage.

You are NOT by your nature an ‘undisciplined’ person.

You do NOT consciously have the desire to be reckless with your trading capital, right?

Most say, “It’s my emotions flaring up that mess me up, feelings like fear, greed, hope and despair.”

But where do those feelings come from?

Your subconscious.

So then the question becomes,

“Why would your subconscious work against you?”

It is simply making corrections.

Whenever there is something going on that is out of alignment with who you are, your subconscious will correct the situation.

If you are trying to make something happen that is NOT truly right for you, then your subconscious will provide resistance to keep it from happening.

That’s where the 5th source of self-sabotage is coming into play.

Here’s an example that I see all the time with day traders.

Most day traders, deep down, really do NOT want to be spending 8 hours a day staring at the charts.

They want the money of course, but full-time trading is not really what they want to be doing.

What would really suit their ideal life is to be an end-of-day trader.

So their subconscious is resisting success as a daytrader and doing them a huge favor too.

Because one of the worst things that can happen is for you to become successful doing something that you don’t enjoy doing.

The same can be true for your style of trading or if you are trading beyond your skill level (risking more than you should be).

This is the underlying wisdom when you hear to trade with a system that suits you.

Because if something is not right for you, your subconscious will provide resistance.

When you are doing what’s is in alignment with your true self and desires,

when you have developed the proper skills and tools to deserve the success,

only then will your subconscious will stop sabotaging your efforts - because there is nothing to correct.

Everything is in alignment, so your subconscious will now allow your success.

This is one of the main reasons that I created the Trading System Mastery Training and included the various support materials - so that you acquire and develop (all in one shot) everything you need to put your subconscious at peace.

When you you’re good at trading, you know you’re good, and you know what made you good, then your subconscious will support you rather than sabotage you.

Start right now to put an end to self-sabotage and other ‘discipline’ issues by acquiring the skill set and process that fixes the cause of the problems.

Click here to let your subconscious support you rather than sabotage you

Cheers

Brian

P.S. Please don’t let foreseeable mistakes happen. Start your trading turnaround right now and take these first steps to enjoying the success you know you should be as a trader.

P.P.S. What are the first 4 sources of self-sabotage? You find out about them in the video that is one of the bonuses with the training program. Don’t just sit there!

Click here to let your subconscious support you rather than sabotage you

Tags: day trading forex currency, learn to trade forex, psychology of trading stocks, trader training, trading mentor

[Psychology of Trading Forex] How To Fix The Real Problem - Permanently

February 10, 2011 by admin · Leave a Comment
Filed under: Day Trading Forex Currency, stock trading, trader coaching, trading education

Day before yesterday we discussed how the issues you encounter in your trading really aren’t from a lack of “discipline”, but were caused by something quite different.

(In case you didn’t get to see it, click here to watch that video)

Today we’ll explore the REAL matter and how you can resolve the problem - permanently.

This subject is so central to everything you do as a trader, and it just blows me away that NO ONE addresses it - and it is really very straightforward.

click here to discover the lasting solution to the real problem

Cheers!

Brian

P.S. In today’s video, you’ll also discover the 3 grave mistakes that traders make that brings the struggles about - and what to do if you’ve made any or all of them.

Tags: daytrading forex currencies, forex education, forex for beginners, Forex trading psychology, learn to trade forex, psychology of trading forex, psychology of trading stocks and options, stock trading psychology, trader coaching, trader mentoring, trading coach, trading education videos, trading mentor

Four Forms of Self-Sabotage In Trading That Kill Trading Accounts

December 22, 2010 by admin · Leave a Comment
Filed under: Day Trading Forex Currency, forex, stock trading, trader coaching, trader training, trading as a business, trading education, trading psychology

Do you sometimes sabotage yourself in your trading, and subsequently getting really frustrated with it?

It can be equally frustrating trying to figure out what specifically is causing it and what to do, huh?

Part of the reason for the elusiveness of the answer is that there is more than just one cause.

There are actually FOUR forms of self-sabotage in trading.

And right now, you can get access to a video that explains all four - for free as a SPECIAL BONUS.

Click here right now

Have a safe and enjoyable holiday weekend!

Cheers

Brian

P.S. DO NOT miss out on this! If results are what you seek, but they have eluded you so far, then this will make that difference you’ve been looking for - I guarantee it!

Click here right now