Investing opportunities are never scarce in any market if you know what to look for.  Be clear about this: A trader should not be thought of as a loser or winner. The difference between those who does well with the market and those that does not is wrapped up in one word - GOALS!

Before you can amass a fortune, learn to make market stock trading work for you. Let me explain what I mean: All good traders learn how to trade by controlling their emotions and learning how the market really works. Let's focus on the mind of the market.

Psychology of the trade

As a student of organizational psychology I have always been interested in the way people think in private arenas, group settings, and organizational structures. Its is amazing how the different variables influence the same person's behavior so drastically. I have spent quite a bit of time studying group dynamics. It is interesting to see how a person acts in situations where there is a certain level of anonymity and de-individuation. However, there is nothing more intriguing than the mind set of an individual trading in the confines of his own home. Strange things happen but unfortunately they are usually all too predictable. When a person starts to trade they get caught up in thinking that they can buck the system. Rules may apply for others but they have a method of dealing with it. They may have received pearls of wisdom from those who have gone before them but the ringing of the bell at 9:30 seems to throw a blanket off of every bit of sanity and reason. Unfortunately, the consequences are grave. The two headed monster, fear and greed, alluded to earlier will rob you of all sanity and strip your account blind. It is my attempt in this brief but necessary chapter to discuss the psyche behind the winning and losing trader. My hope is that you fall into the latter. The choice is yours and no matter how far down your account has shrunk it is not too late. You can climb back up the trading ladder and reach heights that once were thought impossible.

First, let me clear one thing up: A trader should not be thought of as a loser or winner. The difference between one who does well with the market and the one that does not is wrapped up in one word - GOALS!

The person who is successful (truly successful) does not think of winning as defined as a fattened bank account. Don't misunderstand, we all want to receive rich monetary reward as a result of our trading efforts. There is nothing wrong with that. It just cannot be the final goal. If you are so focused on money then like so often happens - the very thing you hold on to tightest will be squeezed to death. Money will never be enough of a goal. The person who struggles day in and day out on the market is often so overly focused on the account that they are not able to do anything else. In the world of trading you need all of your attention on objectivity and clarity. That is why you need to be trading with money you can afford to lose. If you are trading with the mortgage payment, etc.. you will lose objectivity and clarity. Under conditions where the trader is using scared money, the problem is not with the strategy but the psyche of the individual. His concentration is too much on money and nothing else.

The most successful traders are focused on goals such as: having more time with the family, being able to donate to the local food bank, retiring at an earlier age, a long due vacation in the Caribbean, etc.. See, the focus is not so much on money but the ultimate outcome of the money in terms of quality of life. I believe there is an important distinction between the two. The former places pressure on the trader to make so much each and every day thus lending to decreased objectivity. The latter is a goal that is being worked toward but the timeline pressure is not there or at the very least it is decreased. Again, the less pressure on the grip the easier it is to let go. As traders we need to let go of the grip. In letting go, we ultimately win because we are free to trade in such a way that we can go forward with the trades allowing them to play out and provide the gains we have worked so hard for.

Back to the two headed monster. Lets first look at FEAR. Why has this disabled so many traders and often stopped them right in their tracks? It is because we do not truly believe that we have a strategy or move that is going to do what we planned for it to do. We fear because we do not think that we are going to have the strength and wisdom to get out when we need to. We fear because we think the move is going to turn against us. Think about it. How many of us traders have fallen into the previous categories? It is ok to admit it and the beautiful thing about it is that we can do something about these issues. We do not have to fear any longer. If I was teaching the class in person right now I would have us all repeat that three times very loudly in order to get the point across.

First, we believe in the strategy that we have decided to go with. If you do not have confidence in the system you are using then paper trade it until you do or discard that strategy and move on to another one. That is part of the reason why I have listed so many of them in this book. You must be confident with the strategy you have decided to use.

Secondly, you must perform due diligence. Research is time consuming but an absolutely necessary evil. This also works hand in hand with what was just discussed. Good research provides the confidence that you need to be successful.

Thirdly, you do not have to fear a move going against you if you have used limit orders to get into the move initially and then placed proper stops (IE: Straight stop orders, trailing stops) should the move go against you. There should not be any fear if these things are followed through on.

Now, let's look at GREED. Right along with fear this has caused many a trader to stop dead in their tracks. Greed so often takes the profit right out of otherwise successful trades. Personally, I understand how fear plays out more than I do greed. Simply locking in profits through well placed stops or just using a good old trailing stop is a disciplined approach to handling the greed factor. It also goes back to the confidence issue. If you believe in your strategy and yourself then you should not have to try and max out every play looking for the top. Take what you get and move on to the next play. Opportunities are never scarce in any market if you know what to look for.

The last thing I would like to mention in this brief overview of the trader's psyche is you. All the research and the best strategies will not help if you do not believe in yourself. You must enter the trading day with an absolute knowledge that you WILL exercise discipline. You WILL make the right moves. You WILL follow the strategy that you believe in. You WILL make it today and nobody will stop you, not even yourself. Once you were your own worst enemy but not any longer. Tape these statements up on your computer and meditate on them for five minutes or longer before you even type in you broker's address on the browser. It is not an empty mantra but a life changing creed.

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