Trading Psychology - Why Traders Knowingly Make Bad Decisions
769
Summary:
"To Err is Human", but in trading it often happens that traders will knowingly make decisions that create losing trades. Now we're not talking about losses that come about because of testing out a trading plan or a specific indicator. Nor are we looking at simple errors committed purely by accident. If our goal is to profit, then why would we do these things that are clearly against what we know to be right? This phenomenon has many very undesirable consequences that are expe...
Keywords:
forex,forex training,currency trading,daytrading,trading psychology,trader psychology,self-sabotage
Article Body:
"To Err is Human", but in trading it often happens that traders will knowingly make decisions that create losing trades. Now we're not talking about losses that come about because of testing out a trading plan or a specific indicator. Nor are we looking at simple errors committed purely by accident. If our goal is to profit, then why would we do these things that are clearly against what we know to be right? This phenomenon has many very undesirable consequences that are experienced quite regularly in the trading world.
A person's confidence can take a severe blow when these intentional mistakes occur on top of the loss of money. Other after-effects often include a lot of putting oneself down for having done these things. Depending on the magnitude of the error, this can wind up in a rather nasty cycle that compounds the problem and sets the stage for it to happen again. Until the source of the issue is discovered and the trader takes action to address it, the self-sabotaging behavior is likely to happen again and again. This isn't limited to new traders either.
For an example, one such trader (a real person that we'll call Mark) of over 50 years had been going through this month-after-month for over a decade since becoming an individual trader trading from home. Mark has done just about everything in the futures industry that there is to do. He worked on soybean farms and at the shipping docks loading ships and coordinating shipments and orders. For about another decade, Mark ran orders on the exchange floor. From there, he worked both for and as an introducing broker in the commodities industry until he decided to retire at the age of 59. Needless to say, Mark had plenty of experience in trading, but for nearly fifteen years, Mark has been losing money. But why, and why does he keep doing it?
Trading is definitely nothing new to Mark. As a broker, he was very successful. He's tried just about every strategy and system there is. He's pretty sharp and knows his way around the computer and what he's looking at on the charts. Mark loves trading and looks forward to getting up every morning to get busy with his trading. On a typical day, he might make $600 or lose $800. More often than not he loses. When his wife gets home from work (yes, she still works at the age of 70), he's usually brooding in his easy chair after kicking himself and calling himself "stupid" or "idiot". In all these years, he still has yet to end a year in the black. He's also concerned about how much longer his wife is going to let him keep on this way.
When asked why he continues to trade this way, and why he doesn't make use of a system that he knows can make him money, he simply says that he doesn't want to because they are boring. This is very true: a well-thought out trade, where you know what you'll do before you get in regardless of which way the market moves can be very boring. However... when you enter trades without a plan, or if you've deviated from your system, the suspense can be very intense.
Why do people take the time to sit through movies instead of going straight to the end to see if the hero triumphs or fails? Why do millions of people watch baseball games, rather than simply check the scores in the morning? It is the suspense, the excitement of not-knowing the outcome, that brings the thrill. The moments that are most enjoyed and fully hold our attention are when the ball is in the air and we don't know if it will be caught or dropped, when the hero's fate hangs in the balance. As humans, there is a part in all of us that craves that excitement.
At the conscious level, profits are what everyone wants (who doesn't?). Many people choose trading because trading offers the opportunity to realize very significant financial gain. The real risk is that it also offers the thrill that another part of us craves at the subconscious level. If that part of you isn't being fulfilled through other channels of your life, it is highly probable to find its way into your trading and seek satisfaction there. Excitement from not-knowing the outcome in your trading is where you don't want it. What you need to do is to include activities in your life that provide sufficient excitement, and be okay with it if your trading is a bit boring - but profitable.
Web Hosting Services is there to allow you to get your website on to the internet. Web hosting services are important and selecting the options that will get you what you need matters. With the options for web hosting services find the best option in web hosting services. Remember you can get all your web projects on to the internet. To find and get the web hosting services that will be an essential for your new domain. Click Web Hosting Services to get started!
Web hosting services are just one of the parts in the process of hosting a website. Getting content for your websites is the next key part and content for your website such as blog posts and articles is going to be an essential in keeping your websites fresh and interesting. For businesses, content can help your existing clients and help your potential clients know about your brand and company. Get original articles by going to these web links: article writing service and buy blog posts.
Have you been wondering how to get more views on YouTube? Head over to get more views on YouTube to increase viewership of your YouTube videos.
Search engine optimization also called SEO is an essential part in getting organic traffic to your website once you have web hosting services. This long term strategy helps get your websites noticed by search engines such as Google, Bing and Yahoo. To get search engine optimization services, go to SEO services.
Once you have got web hosting services, you can also begin earning with affiliate marketing programs also. Make sure you look and join the affililate programs on the Try A Million affiliate marketing programs affiliate directory.
(C) Try A Million, We empower the World Wide Web!