Sharpening your trading and investing psyche
I understand the mental battles we all have, having gone through them myself, but successful investors and traders all eventually understand two things very clearly.
- You must trade/invest unemotionally.
- You must use a process that protects your capital (i.e. stops) so you can sleep at night knowing your capital is safe.
That really is the essence of sound and responsible investing and you may say yes, I can do that and realistically we all probably know this, but I have to tell you there is actually a third and more difficult part to this equation and that is actually having the discipline to do exactly that. Not just saying, it but doing it.
- Discipline, discipline, discipline.
Stockradar takes the process of these three necessities and overlays this structure on a real-time trading template that covers 160 stocks. You can then see how it works as the Stockradar process drives absolute returns. It helps you understand, it provides guidance and it gives you confidence in a process driven strategy so you to can just do it, not just say it. It is somewhat robotic and boring sometimes, but it works – that’s the payoff
Let me tell you a story of three investor behaviours, their names are Mr. Worry, Mr. Greedy and Mr Cool.
A string of winners can convey a sense of reckless abandon and invincibility. This is Mr. Greedy, and this is when the good trader appears and must take control, Mr Cool.
A string of losses can cause paralysis and fear, and this is when Mr Worry appears and is paralysed by fear. We need Mr. Cool on board again to help us trade with perspective, poise and control to be able to take advantage of market opportunities.
When you get that frustrated feeling that you want to ‘chuck’ the process take a big deep breath move away from the screen go for a walk or any activity that soothes you your mind.
Then afterwards remind yourself of what you’re doing and why. Go through the process and remind yourself what is the right way and what is the wrong way.
Hopefully you’ll feel better and then be able to return and tackle the problem in a cool, calm and collected manner.
If you follow this process slowly but surely you’ll develop an emotional detachment and confidence in yourself under all circumstances. You suddenly ‘click the link’ and start to become a successful trader and investor, you better understand your shortcomings and strengths, and in turn become a better person who knows thyself.