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Lessons Learnt as a Trader (so far) Part 3

by BigFatPurse on July 16, 2010

Photo by PSD

Photo by PSD

I have slowed down my trading pace recently. Taking a step back and review my trading behaviour and psychology. It was apt to pick up Conrad Alvin Lim’s “Secret Psychology of Millionaire Traders” from the library to aid in the analysis of myself.

Find Reasons NOT to trade

I confessed I am a compulsive trader. I am quite fearless before I enter the market, which is bad as I tend to take unnecessary risks. I have conviction in the system that I used and protected by stop loss, I always think how bad can it go? But what if I missed the trade and the profits when I did not participate? It is a combination of “no fear” and greed that propelled me to enter trades carelessly. Conrad believes traders should take a defensive approach to trading. Instead of looking for signals to make an entry, traders should look for reasons NOT TO TRADE. This is like playing the devil’s advocate. By finding just one reason NOT TO TRADE, one shall not enter the market. If I have adopted this mentality earlier, I would have rejected many trade signals and save myself from unnecessary losses. Read more…


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