Welcome to this newsletter for easy share trading.
Now that headline was not designed to make you open this email, but if it did then it sort of proves my point. That point is how we think and feel about human fundamental traits will affect your view of money, life and the markets.
Feelings often result in actions.
Investors and traders mirror their emotions of life in the markets. I don’t want to get into a deep psychological discussion about that (if you are interested there is more on my website under the anxiety and desire section) but 2 simple examples are:
- If you are an adventurous risk taker in life than you will probably trade and invest that way.
- If you are security conscious and careful in life, you will probably invest and/or trade that way.
Emotions governing who and what you are can make trading difficult, so what’s the answer?
1/ Have a simple system,
2/ and stick to it.
If you can’t stick to a simple system or method go back to point 1, it’s probably not simple enough and doesn’t suit who you are.
You are either risky or careful.
You are probably trying for too much sex or security!
In trading terms that means attempting to make lots of money quickly (trying to be too sexy so you crash and burn and lose) or not prepared to take any risk at all (so conservative you never win because you are afraid to enter the market).
The point of all this is never underestimate the real reasons and emotions behind our actions as traders and investors.
Trading Tip: keep an emotional journal of why you did the trade you just did (or did not). After a while you will see a pattern emerge as to your emotions with the market and that is an invaluable piece of information no one else can give you.
Last newsletter I showed a graph of the All Ords and said it was looking ok and was above a longer term moving average.
Well things haven’t changed a lot except its looking stronger. Trading is about going with the flow, and at the moment the flow is up.
If you want to know more about simple methods of trading there is more on my website.
Until next time all the best with your trading and investing.
Peter.
