Getting What We Want From The Market

Getting what we want from the markets often seems to come at a great cost and it is this struggle that confuses and confounds many of those who start out on their trading journey.  It is often the cause of the majority of would-be hopefuls who give up in their quest for trading success.

If we could just understand and overcome this initial barrier then the path to trading freedom would be revealed.

Let me put it this way, in the physical world if we want warmth from a fire we stand close and hold our hands out to receive the benefit. But if we hold our hands in too close we get burnt!

It is finding that balance, that safety zone if you like, between getting the warmth we want from the fire yet not getting burned in the process.

It is the same in the markets. We need to enter the market in order to take a trade, yet by the very act of entering the market and by taking a trade, we risk the prospect of getting burnt!

The emotional pain as well as the financial pain of this experience makes us fearful of the market.  This fear is a hindrance to trading success and stands in the way of us being able to achieve our trading goals.

How do we overcome this barrier?

In just the same way as we put fireguards in place to protect children from getting burned, so too we can effectively put cost guards in place to protect us from getting burned in the markets.

These ‘cost guards’ come in a variety of types and forms. Here are just a few by way of an example:

• Only ever expose 1% of your trading capital on any one trade or product.  In doing this we quantify and limit the extent of any one loss.
• Accept the cost of entering the trade.  Ask yourselves “Do I truly accept the risk of this 1% in the market?”  You might be surprised to know that many traders place a trade and  “hope” that the trade will be a winner.  This is a sure fire way to disappointment
• Have a written trading plan that you follow religiously on every trade you take.  This brings order and consistency to an otherwise random and chaotic market
• Flawlessly execute your trading plan in every trade you take.

These are just some of the ways that we can enter the market yet protect ourselves from that feeling of being burned. 

At Trade With Precision, we know you don’t always get want you want, but when it comes to trading we can help you achieve your own trading goals and keep you out of the fire!

Regards,
The TWP Team