Know Yourself,Know Your Purpose

K n o w   Y o u r s e l f ,  K n o w  Y o u r   P u r p o s e

Almost any professional trader will tell you that the key to success in the markets lies in understanding your own psyche. (Understanding the psyche of fellow traders, collectively referred to as ‘sentiment’, is also an invaluable tool). Many inexperienced traders are unprepared for the violent assault on their thoughts and emotions at the start of their careers. They soon find their heads spinning with euphoria when winning (greed) and the pits of their stomachs knotted with anxiety when losing (fear). Contrast this with many professional traders who, it is said, achieve a sort of trading nirvana, whereby their thoughts and emotions blend into a sea of calm regardless of whether they are winning or losing. Their heads do not spin and their stomachs do not churn – ever. For you to achieve this exalted

state, you will need to know yourself and how you will react to both winning and losing positions. Once armed with this information, your trading plan can incorporate some of the positive aspects of your psychological make-up and filter out some of its negative aspects.

Coupled with understanding your own psyche it is important to know why it is that you want to be a trader. What is your purpose - what does success as a trader mean to you? Decide what it is that you want to achieve and then ask why and how trading is going to provide it. How sad it would be if, after a year or more and hundreds if not thousands of pounds later, you realised that trading was not for you after all and that the ladder to success was leaning

      up against the wrong wall.