Trade With Precision Newsletter - Psychology

If you haven’t already read Part 1 of this series then make sure you do so before reading on. In Part 2 of “Technical Analysis Tips for the Everyday Investor” we want to show you how to read the trend in a product which you may be looking to invest in. By simply reading the trend we believe that you can increase the odds of the investment working out for you. If you can align your fundamental view with a technical view then you’ll be much better off than if these two views are conflicting.

What sets professional traders apart from amateur traders is that professional traders are able to predict price action and trade accordingly instead of continually chasing moves like amateur traders. By predicting price action, these professional traders are able to gain entries into markets before the bulk of the move occurs. In contrast, amateur traders are only drawn to the market after large price moves have occurred and they try to chase the market. By the time amateur traders gain an entry into the market, the professional traders are already unloading their position and ringing the cash register.

The state of mind in which you are in when you’re trading the markets is extremely influential to your level of trading success. Managing your state of mind to enter into your “trading zone” whenever you are looking at the markets is a skill that can be developed and mastered.

At the end of the trading week, how many of you actually sit down and conduct a review of the trading week just gone? If you can’t answer yes to that question and you’re serious about improving your trading then perhaps you need to fit a weekly trading review into your schedule. It doesn’t need to be a daunting task; if you allocate yourself just 15 minutes at the end of the week to review your trading performance for that week then it can make a big difference to your trading.