I’m going to post a lot of stuff on this over the coming months because quite frankly, from what i have seen and personally experienced, it seems to be the main reason why most people fail at trading or investing. If you are absolutely chomping at the bit and want to know more, just have a look at the blogroll and wing your way over to FuturesTrader71 and Brett Steenbarger’s blog. These guys are great and will help you tremendously.
Here is a quote is a quote from the great Paul Tudor Jones in his Trader documentary from 1986-1987, i often like to remind myself of it when i feel like i’ve had my legs taken out.
“Why most people lose money as individual investors or as traders is because the fact they are not focused on losing money, they need to focus on the money that they have at risk….If everyone spent 90% of their time on that rather than 90% of their time on pie-in-the-sky ideas on how much money they are going to make then they will be incredibly successful investors.”
The above quote pretty much summed up my issues when it came to trading and it took an awful lot of effort and desensitizing to swing me around. Everyone is wired differently and so these emotions are more prevalent in some people than others but you can do things to help alleviate it whether you are scalp trading emini futures or take a multi-year approach on investing.
I’ll post up some thoughts on the market later today.