Trusting Your Trading, Part 1

The longer I trade, the more I trust myself. Part of it is knowing how and being in the jungle for years. The other part is deciphering the frustration on how often traders are WRONG.

So, here’s the take home: Stop following along with other traders’ stock picks, and start picking your own. That’s right. Pick your own stocks, and make your own trades. Imagine not following the herd into another losing trade. Imagine taking complete responsibility for your trading results. I know what you are thinking already…

You fear that you are not knowledgeable enough. Instead, you place your confidence on someone in the media and follow what they trade. Any fear is your enemy when trading, as fear narrows your perceptions of reality. You are not able to see the many alternative solutions in front of you, as fear limits choices.

When you hear the latest fortuneteller stock picks on Rapid Money or Angry Money, recognize those traders are already in their position, and they need you to jump in to drive their pick higher. If these traders are on mainstream media, it’s for a reason. Either they are extremely altruistic and are sharing for the sake of humanity, or their to-date trading has been inadequate in fulfilling their financial needs. Who would sacrifice a great, thriving trading business for being popular for reasons other than ego? An exaggerated ego is another great way to skew your perceptions of what the markets are actually doing.  

While it can benefit you early on to trade alongside an experienced trader or even join experienced traders’ stock or option alerts, you will not get the results you want over the long term by copying other’s trades. I’m talking from experience here!

Trading is not an easy endeavor. If it was, no one would ever show up to work again.

Stephen HErto

Sometimes it helps to be blunt. The reason you’ll follow another’s trade and not your own is not because you trust them entirely, it’s because you don’t trust yourself. You don’t believe you will execute what needs to be done at the right time. Your thinking will determine your risk management, also known as your exit trade, and it’s not the same psychology as the trade originator. Your fear-based errors stemming from hesitation, jumping the gun, rationalizing and misperceptions of markets will determine your exit unless you have a defined plan you have disciplined yourself to follow. When you don’t have a plan to follow, the pros will eat your lunch, dinner, and take you to the proverbial cleaners.

Trading is not an easy endeavor. If it was, no one would ever show up to work again. It takes time and continued effort to consistently improve your trading skills. Start trusting yourself more today.

Enuf said.