Trading is a very exciting investment vehicle. Very exciting if you get or make profit on your trade. There can be times that you feel like it’s so easy to make money and quick cash. But it may also a very disappointing investment. Specially when you see your money or profits melting and you don’t know what to do. It feels like that you don’t want to finish or close the day without taking back the money that you lost.
This is because trading is an investment vehicle that requires a large amount of self-discipline. You must be able to ride-on without having a huge amount of emotions attached inside your head. You must always prepare and be aware of what will going to happen to the market. You can’t be thinking, “ I’ve got to make money today because… “ the market doesn’t work that way.
Even for a short term trader the stock market is still a long term strategy. The difference is, if you are a short term trader you have to rely on the long term outlook. You may lose a little here or win some there, but in all you should be heading up, in the long term.
Taking out the emotions during trading means you have to be able to follow your system that you have made and set. Don’t get high when making profits or getting depressed when losing. The ideal way is to trade like a machine, trading without feelings. Everything is set automatically and work mechanically. Once the settings are made, the machine does not wonder or think, it simply follow. And if you want to be a great trader, you must be disciplined enough to follow your settings and rules.
In order for you to trade like a robot you need to do 3 things.
1. Develop a set of rules that you use to determine when to enter or exit a trade. Every trade you take should follow your rules.
2. Test your rules by back testing and paper trading. This is the best way to figure out if your rules will work in the long term.
3. Follow your rules. Never hesitate to buy when your rules tell you or sell when your rules tell you.
These three steps allow you to make money in the markets and allow you to trade unemotionally.
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