Excerpts from my book

 

 

TRAITS OF A SUCCESSFUL TRADER

 

 

EMOTIONS

Trading by itself does not mean profits although in the business sense it should convey a means for making money consistently. So may be the right way is to call it either a profitable trade or a losing trade.

FLIGHT OR FREEZE

Naturally one would like to be on the winning side always. The human emotions play a big role in deciding which way the dice will roll. In order to master our emotions it is not required to do masters in physcology. However it would be necessary to understand that in every human being lurks an animal behaviour bordering on flight or freeze when confronted with danger filtered through many generations of evolutionary survival instincts.

It is an established fact that the human brain has two sides , one the logical brain and the other the emotional brain. However we also have at the base of the skull that part of the brain which literally runs on auto and is responsible for all our bodily functions and which actually can make turn off the

Logical brain and brings about base survival instincts which may not be always correct.

It is this illogical brain which a successful trader has to conquer. The paradox is that the very instrument of leverage in the markets which gives us an opportunity to trade with larger sum of money than we have actually becomes the reason for us to lose reasoning. This happens when the losses are magnified due to leverage , which our minds cannot comprehend and the flight and freeze mode takes over our brains.

Imagine you have taken a trade and utilized majority of your funds as margin. The usable amount then is finished with only small fluctuations.

Imagine a trader opens an account with 1000 dollars and places a trade on EUROUSD on a 1000 lot.

Now on every pip, the trader sees a fluctuation of ten cents a pip which ensures moderate losses if any. These losses the trader will be able to take in his stride as relatively the losses will not be high

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