Module 12

Innerworth — Mind over markets

Chapters


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    1. Introducing ‘Innerworth – Mind over markets’

    Most people start trading the markets lured by the prospect of making easy money. But anyone with experience will agree that the stock markets are probably the toughest place to make easy money. You n ..

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    2. Accurate Perceptions of Loss and Risk Aversion

    Emotions often drive investment decisions. Trading lore is replete with examples of how fear and greed influence the masses to buy and sell at the wrong time. Similarly, behavioral economists have foc ..

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    3. Accepting Criticism

    Novice traders are infamous for needing to be right. This natural, human tendency is so powerful that novice traders engage in unproductive trading behaviors to avoid admitting that they are wrong. Th ..

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    4. Trading Capital: Size Matters

    How much capital does one need to start trading? Every person who is new to trading asks this question. It’s often the first question that pops up at trade shows and in trading-school classes. B ..

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    5. Action Oriented and Winning

    Trading isn’t easy. Indeed, the odds are against you. But if you succumb to hopelessness, you’ll never become a winning trader. You have two choices: You can wallow in self-pity or you can ..

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    6. Focus on the Action, Not the Prize

    It’s easy to falter while trading. Suddenly, you get distracted, panic, and make a trading error. When trading with an optimal mindset, in contrast, the winning trader is focused on his or her i ..

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    7. Detailed Action Plans: A Precursor For Trading Success

    In our everyday lives, we are used to doing things reflexively, on the spur of the moment. For example, we don’t consciously think about making a turn as we drive; we just do it automatically wi ..

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    8. A Trading Fable

    Did your parents read you fables as a child? Fables are often fanciful and improbable tales that have a lesson to teach. Here’s a thought-provoking trading fable. Once upon a time, there was a n ..

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    9. It’s Easier to Face Fear than Avoid It

    Jack fantasizes about becoming a profitable trader. He dreams of big wins and of amassing a great deal of wealth. In the back of his mind, he imagines that if he were wealthy, he could have a life ful ..

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    10. Regret: A Powerful Emotion You Must Face

    When trading the markets, one often faces actual harm: If you bet a lot of capital on a single trade, and it goes against you, you lose it. The harm isn’t imagined; the actual loss of money is p ..

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    11. The Unconscious Drive to Fail

    Ask traders about their reasons for trading, and most will tell you, “I want to make huge profits.” Although most traders get into the business to make a significant return on their money, ..

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    12. False Consensus Effects

    Suppose you decided to go long on Sears.  How many other investors would agree with your decision?  When people are asked such a question, they tend to over-estimate the number of people who will ma ..

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    13. Making Sense of it All

    Social psychologists are often fond of saying that people are “lay scientists.” Like formal scientists, they try to understand their world. They make hypotheses and test them. Rather than ..

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    14. Fear of a Sudden Turn of Events

    You have several positions open and things have been going well for the past few months. Suddenly, there is yet another interest rate hike right on the heels of a month of bad weather and natural disa ..

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    15. Refuting Core Beliefs: A Remedy for the Fear of Failure

    Our outlook and expectations dictate how we approach trading. For example, if we are extremely fearful, we will be reluctant to take risks, and at an extreme, we may even be afraid to even put on a tr ..

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    16. Paralyzed by a Fear of Failure

    Jack has just made five losing trades in a row. His confidence is shaken, and now he is reluctant to make another trade. He thinks, “Why should I try again. I’ll just lose again. If I lose ..

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    17. Getting Worked Up For Nothing

    Jack’s been trading for the past five years, and he has put in a heroic effort. He worked two jobs to build up enough capital to trade and have a realistic chance of success. He spent nights and ..

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    18. Loss is Feedback, Not Failure

    Like any challenging endeavor, trading requires a “thick skin.” One cannot be easily hurt by criticism. One must be completely open to criticism of any kind so that changes to one’s ..

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    19. First in Line and Ready for Action

    There’s security in numbers. Have you ever looked at a school of fish in an aquarium? They stay in a big clump because if a bigger fish is nearby and ready to eat one of them, a single fish is l ..

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    20. The Flexible Trader

    The winning trader is flexible. Flexible traders have a carefree attitude when it comes to executing a trade. They don’t over-think their strategy. They do their homework, develop a reasonable t ..

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    21. Flexible and Open to Possibilities

    Winning traders are flexible. They look at a trade from different angles and they are not afraid to explore every possibility. They know they may be wrong, but being wrong doesn’t bother them. I ..

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    22. The Flexible and Disciplined Trader

    Flexibility and discipline go hand and hand. In their book, “Electronic Day Traders’ Secrets,” Friedfertig, West, and Burton argue, “Discipline is saying ‘I’m wrong ..

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    23. Be Flexible Enough to Stand Aside

    It is vital for one’s survival to know when to stay out of the markets. There are times whey you should stand aside and wait for the right moment. Not only can market conditions change, but also ..

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    24. Peak Performance Trading

    Seasoned traders frequently describe moments when they trade in a peak performance state. There are various names for it: “trading in the zone” or “flowing with the markets.” B ..

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    25. The Fly and the Tree

    Flexibility is key when you’re a trader. One must be able to look at a trading problem from multiple perspectives in a calm, rational, and insightful way. Have you ever noticed that when you are und ..

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    26. Focused on the Trade

    When you have put on a trade, it’s essential to stay focused on monitoring it. You must be able to accurately perceive the signals that indicate the market is going against you, and you must act ..

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    27. Concentrate On the Trade

    When you’re trading the markets it’s necessary to concentrate on the trade. You cannot let your attention sway. You can’t impulsively make a mistake. We are often distracted, however ..

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    28. Focusing on the Positive

    When trying to meet the challenges of trading, it is often easy to obsess about what you are doing wrong until you start to feel that you’ll never master the markets. Rather than focus on what y ..

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    29. Knowing when to Fold

    The most challenging aspect of trading is finding a trading strategy that will work reliably. The possible strategies are endless. Some traders carefully backtest historical data and try to find a str ..

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    30. Following your Passion

    Successful people are passionate about what they do. They aren’t concerned with the outcome, but with the process of achieving the outcome. That said, it would be nice to avoid worrying about ou ..

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    31. Forward Thinking

    The famous psychotherapist Fritz Perls once noted that people feel anxious and fearful when they worry about, and mull over, their past mistakes or worry about the future. A peak performance mindset i ..

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    32. The Right Frame of Reference

    Many novice traders are frustrated when they start trading. It’s common to hear a novice trader complain, “I don’t know what’s going wrong. I study the markets every chance I g ..

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    33. Trading offers Freedom

    When trading the markets, there’s a constant need to make profits. You can easily start feeling that there’s too much to do and not enough time to do it. If you’re like most traders, ..

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    34. Free and Easy Trading

    Throughout the day you make everyday decisions that mean little to you. You drive your kids to school and along the way, you make a host of decisions about which route to take, where to turn, or when ..

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    35. Free Up Psychological Energy by Relieving Stress

    There are limits to the psychological energy you have available to devote to trading. And this limited energy is diminished when you let too many issues remain unresolved, lingering in the back of you ..

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    36. Organize your Workspace and Relieve Stress

    Trading the markets is a stressful occupation. The markets are unpredictable and chaotic. No outcome is a certainty, and many times, when it seems as if you know where the market is going, you discove ..

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    37. Market Frustration: Stay Calm; It’s not Personal

    Tom had been going long on a stock trade for two months. He expected a product announcement to boost the price a few points, but nothing happened. Despite rave reviews of the product and high demand, ..

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    38. Building Up Frustration Tolerance

    Setbacks are the rule rather than the exception when it comes to trading. Discovering reliable trading strategies is a challenge, and frequently, a promising strategy produces a loss. Losses and other ..

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    39. Fear of Success: Is it relevant for Traders?

    Psychologists studied “fear of success” in the 1970s and this topic received a great deal of attention in the popular media. Today, some trading websites have had discussions as to whether ..

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    40. Take Responsibility and Take Control

    The prominent psychologist Dr. Julian Rotter noted that there are basically two ways to understand and interpret events in one’s life: One can attribute the cause of events to internal forces, s ..

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    41. The Mindset of a Professional Gambler

    Many members of the “established” investment community are quick to point out that investing is not gambling. To the general public, gambling has many negative connotations. When professio ..

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    42. Closing the Gap

    Do you ever start the trading day feeling that there’s little chance of making a profit? You just stare at your screens, stuck and disappointed. It’s at times like these that an optimistic ..

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    43. Developing New Trading Ideas

    As any seasoned trader will tell you, the key to long-term profitability is a flair for devising innovative, new trading ideas. Winning strategies are hard to find. And after one goes through all the ..

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    44. Back On the Right Course

    Have you ever found yourself frustrated or angry, but didn’t know why? Perhaps you were innocently monitoring a position and the market suddenly turned, and when it did, you watched half of your ..

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    45. Take Credit for Your Efforts

    Winning traders make profits. In the end, the bottom line as a trader is the extent to which you are profitable. If your efforts don’t produce a profit, it is easy to feel as if you have accompl ..

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    46. Getting Ready to Trade

    Trading is challenging. It pushes your skills to the limits. And unless you manage your risk carefully, the consequences of a wrong move can be fatal. It’s vital for your survival that you make ..

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    47. Realistic Optimism Keeps You Grounded

    Jack and John have just started a small trading business. Jack says, “I can feel it. We’re going to make a fortune. By this time next year, we’ll be rolling in money.” John cou ..

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    48. Don’t Forget to Take a Break

    Reality is subjective. There are different states of reality in the same way that there are different states of mind or different states of emotion. After a series of setbacks, for example, the world ..

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    49. They Say it Couldn’t be Done

    Jim has been trading for six months. He started at $5,000, but he only has $1,500 left. He is starting to get worried. He’s frustrated and upset. He tells his friend Jason, “I think it is ..

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    50. Waiting for the Payoff

    Are you ready to work all day and make absolutely no money at all? If you ask most people that are accustomed to working a 9-to-5 job, they would say, “No way, are you kidding?” But if you ..

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    51. Modest and Realistic Goals

    Stan is disappointed with his life. He views his life as a consolation prize, a series of concessions that fail to meet his desires in the end. He wishes he had more money. He fantasizes, “If I can ..

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    52. Clear and Specific Goals

    Trading can be tedious at times. Day in and day out you have to look for market opportunities, and once you find them, you have to put your money and a little bit of ego on the line, and suffer the co ..

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    53. Setting Goals for the New Year

    With the New Year upon us, it’s time to make plans for the future, and set exciting new goals. Goals can be motivating. When we think of where we want to go next in our lives, and when we formul ..

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    54. Goal Setting Enhances Motivation

    The goals we set often dictate our motivation level. In his book, “The Mentally Tough Online Trader,” Robert Koppel (2000) argues, “Setting goals is imperative for the trader to enha ..

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    55. Go For It

    When your money is on the line, you can’t help but act cautiously. You don’t want to impulsively gamble with your account, dig yourself into a financial hole, and need to work twice as har ..

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    56. The Golden Mean: Real Trading Phenomenon or Just Wishful Thinking?

    If you’ve spent any time around trading, you’ve probably run into the Golden Mean. You may have seen it represented as Fibonacci lines on a price chart. The Fibonacci sequence is a string of numbe ..

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    57. Putting Up a Good Fight

    The outcome of a trade is never a sure thing. There’s always an element of chance. When going long, for example, all indicators may suggest a strong and solid trend, but it’s possible that ..

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    58. A Good Mood Is More Important Than You Think

    Have you felt under extreme pressure while putting on a trade, and found that you just couldn’t think straight? You questioned your trading plan, and suddenly, you hesitated at a critical moment dur ..

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    59. The Dynamics of Greed

    In the movie “Wall Street,” Gordon Geckko argues, “Greed is good.” Greed can motivate you to strive for perfection and keep you persisting in the face of adversity, but greed h ..

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    60. Don’t Be a Grinch: Relax and Seek Out Balance

    “How the Grinch Stole Christmas” by Dr. Seuss is a parable of modern life. The Grinch sneaked into town and tried to ruin everyone’s Christmas by stealing the presents and materialis ..

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    61. Grounded and Objective

    On Thursday, tech stocks took a dive. Mark lost $5000 on his AAPL position alone. It’s Friday morning, but he still feels guilty. He can’t get the losses out of his mind. He has been tryin ..

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    62. A Guidebook for Work Productivity

    Trading is a demanding profession. If you are a novice trader seeking consistent profitability, you have your work cut out for you. Many people are attracted to trading, but few actually become profit ..

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    63. Conquering Guilt and Moving Forward

    In the trading profession, profits are hardly a sure thing. Even the most seasoned trader makes a big mistake occasionally and pays the price. Professional traders at large financial institutions, for ..

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    64. Working Through Guilt and Moving On

    Last night, it all seemed so simple. You had a trading plan all worked out. The stock should dip to $50 around noon. You would patiently wait, buy it, and sell when it hit 52 later in the trading day. ..

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    65. Guilt: Protection Or Distraction

    Jack just abandoned his trading plan and ended up making a losing trade. He thinks, “Why did I do it again? Why can’t I stick with my plan?” He feels guilty. He’s kicking himse ..

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    66. Going With Your Gut

    Seasoned traders aren’t afraid to go with their gut instinct. After years of experience, an astute trader’s gut is the unconscious integration of all essential market information, the mini ..

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    67. Cold, Hard Facts: Look Honestly and Make Adjustments

    When it comes to evaluating your performance, there are times when there is no substitute for studying the cold, hard facts. In the end, the bottom line is unavoidable: If you are not profitable acros ..

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    68. A Good Hard Look at the Facts

    Have you ever made a small losing trade and thought, “It’s all right. I’ll win on the next one.” The next trade comes along, and you lose. And then the next one is a loser, and ..

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    69. Commitment to Trading: Why It’s So Difficult

    You’ve been told time and again that a strong commitment is vital to long term trading success. We’ve all seen the adverse consequences of people who are not committed to their goals, in o ..

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    70. Head-and-Shoulders Pattern is a Psychological Map

    While charts show a financial instrument’s price history accompanied by volume, they are also exciting reflections of human behavior. And because they reflect basic human nature, they can be used as ..

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    71. A Healthy Approach to Trading Success

    “Those who find trading intrinsically satisfying, enjoyable, and meaningful will put in the necessary hard work and achieve high performance levels.” ..

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    72. Having, Doing, and Being: Which State of Mind Drives You?

    Making profits as a trader is often a matter of trading in the proper state of mind. Trading expert Dr. Van K. Tharp, author of several best-selling books on trading psychology and head of the Van Tha ..

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    73. The Conscious Member of the Herd

    Do you ever just feel as if you are going through the motions, acting without thinking? Are you surprised that you react emotionally, selling prematurely when you meant to hold out a little longer? Or ..

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    74. The Herd Mentality

    Have you ever watched a herd of cattle as they graze in an open field?  It’s quite remarkable. The cows seem content as they eat the grass and stand in a scattered formation.  Then, suddenly, ..

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    75. Pulling the Trigger Decisively

    Do you have trouble pulling the trigger? How many profitable trades have you missed because of this affliction? Why do you hesitate? If every trading idea that popped into your head turned out to be p ..

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    76. Hesitation: A Plethora of Reasons

    Humans have a tenacious need to protect their assets and avoid risk. This is especially true for novice traders. It took a long time to build up sufficient capital to trade seriously, and it’s u ..

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    77. Trading in a Higher Psychological Sphere

    Top-notch traders trade in a higher psychological sphere. Trading is a peak experience where everything seems to click. Winning traders trade in the zone. They reach a psychological state that is inhe ..

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    78. The Highly Motivated Trader

    Jim is a novice trader who is deeply frustrated and ready to give up. He’s read all the trading books, followed all the trading “gurus,” and worked tirelessly day after day. Despite ..

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    79. Everything Seems Obvious In Hindsight

    Do you remember your first impressions of trading? Perhaps you were young and had a strong desire to achieve early success, but if you were like most people, you had unrealistic expectations about the ..

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    80. The Benefits of Hindsight

    Have you ever planned a trade that seemed a sure winner, yet we’re surprised to find it had failed? A plan could look great when you think of it, but after it fails, and you had time to think ab ..

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    81. The Future Is Never Certain

    When trading the markets, uncertainty is often a fact of life. Consider the plight of Jack who tried to add as much certainty into his trading as possible. He decided to invest in a solid retailer. Co ..

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    82. Using the Success History Search To Cultivate a Winning Attitude

    Making profits is often a matter of thinking and feeling like a winner. In their book, “The Mental Edge,” Kenneth Baum and Richard Trubo (1999) argue that tapping into your history of succ ..

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    83. Don’t Dig the Hole Deeper

    Bill has had a bad day. He’s down $1,000. He thinks, “I can’t end the day down $1,000. I’ve just got to make that money back by the end of the day.” He continues to trade ..

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    84. Trading From Home: Avoiding the Traps

    Jim was tired of commuting to work in two hours of rush hour traffic every day. He thought, “If I could only work from home and avoid the stress and monotony of driving day in and day out, IR ..

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    85. High Hopes

    Can an ant move a rubber tree plant? Perhaps it can if it has “high hopes.” This image exemplifies the eternal optimist. The power of positive thinking, if only we could muster enough of i ..

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    86. Next Time You Get a Hot Tip…Beware

    Few things appeal more to our sense of greed than a hot stock-tip. Sometimes it comes in the form of a phone call: “I’ve got a buddy who works for Ajax Widgets,” the tipster will tell you, “an ..

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    87. It’s How You Play the Game That Matters

    The old saying, “It’s not whether you win or lose but how you play the game” is especially relevant to trading. Many novice traders work under the assumption that winning is all that ..

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    88. A Humble and Modest Approach

    It’s exciting to win. Trading is challenging. It requires well-honed skills and rock-solid confidence. After a winning streak, it’s easy to get a “swelled head” or a big ego. W ..

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    89. Winning Traders Are Humble

    It is important to reward yourself for a job well done. We feel pride after making a significant achievement and are especially proud when the achievement has increased our social status. Pride can be ..

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    90. The Humble Trader is the Winning Trader

    Trading can be frustrating at times. You put in a heroic effort, but it doesn’t always pay off in the way that you had hoped. When you finally do win big, you naturally want to celebrate. You ma ..

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    91. Humility

    Why are folks initially attracted to trading? For many, it’s the money, especially the prestige and status that money can bring. But seasoned traders warn that when money, riches, respect, or an ..

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    92. Striving for an Ideal: Art or Science?

    Many trading books describe the ideal trader as disciplined, a rule follower who devises a trading plan and sticks with it. Trading requires a certain kind of discipline, however. Not just any kind of ..

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    93. Idealism: Dare to Dream

    Dreamers are often exalted because they dared to achieve the seemingly impossible, but unless one’s dreams match specific and realistic actions, little becomes of them. Without well-defined plans, a ..

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    94. Striving for Ideals

    When you look at the best and the brightest, it’s often necessary to merely admire them rather than actually become them. Not everyone can be the best and the brightest, but it’s nice to k ..

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    95. How Much Are You Making?

    Tim asks, “So how much money are you making?” His friend James timidly replies, “I’m doing all right.” Tim boasts, “Wow, I’m making so much money today. This market is so ..

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    96. Intuition: It May Be Illogical But It’s A Trader’s Most Valuable Asset

    If only humans were more like machines. In theory, the ultimate trader would act like a robot, analyzing market data with unfailing accuracy, devising a trading plan, and executing it without flaw. Bu ..

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    97. The Power of Positive Imagery

    Have you ever had those days, or weeks, where you just couldn’t get on a winning streak? Perhaps you are a novice trader trying to break into the field, and wondering if you’ll ever become ..

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    98. It’s Not Personal

    Have you ever lost big on a few trades and thought, “I need to win it all back right now”? When this happens, your emotions start to take hold. You may even start thinking about seeking &# ..

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    99. Acting On Impulse

    Why do so many traders abandon their trading plan? Is it their personality, an inherent pitfall of the trading profession, or temporary insanity? A host of factors may contribute to a lack of discipli ..

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    100. Controlling Your Impulses

    Winning traders have learned to control their impulses. They are calm and relaxed. They are not riddled with self-doubt or self-reproach. They can make trades intuitively and effortlessly. And they sh ..

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    101. Impulsive Trading: Possible Causes and Cures

    A common complaint of novice and master traders alike concerns the ability to maintain discipline and self-control. Whether it is prematurely abandoning a trading plan or putting on a trade just to ge ..

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    102. Impulse Control Strategies

    The most serious malady facing many novice traders is a lack of discipline. Rather than sticking with a trading plan, many novices lose control. They impulsively abandon their plan and often pay the c ..

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    103. Impulse Buys

    Have you ever had a hard day and had to stop off at the grocery store to buy a loaf of bread and a gallon of milk? As you stand in the line that never seems to end, you glance at magazines, look at th ..

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    104. Facing Temptation With Discipline

    Looking at your screen can be much like looking at a slot machine, and stopping yourself from dropping a dollar in the slot and pulling the handle. You must restrain yourself from making an impulsive ..

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    105. Increasing the Odds of Success

    Trading is one profession where you often find yourself working against the odds. Not just anyone can walk in off the street and start making consistent profits. It takes practice, skill, and proper m ..

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    106. The Independent Minded Trader

    Market action is driven by fear and greed. Masses of market participants follow each other to their doom. It’s a fact. If it weren’t true, winning traders couldn’t take advantage of herd instinc ..

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    107. The Independent and Confident Trader

    Trading isn’t a profession where the top performers follow the crowd. In some professions, it’s vital to be able to astutely identify what everyone else is doing and follow them. But trade ..

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    108. Independent Minded and Carefree

    Novice traders are often puzzled by their inability to put on winning trades. Everything seems plausible in the planning stages of a trade, but when it comes time to execute the trading plan, they cho ..

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    109. Striving for Independence

    The entrepreneur, the corporate CEO, and the top-notch trader are all viewed as exemplars of independent thinkers. They go their own way, go against the status quo, and are unyielding individualists. ..

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    110. Information Anxiety

    Do you ever have a nagging feeling that no matter how hard you try, there’s no possible way that you can keep up with everything around you? If the answer is “yes,” you may be suffer ..

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    111. In the Mood

    Jason is in a rut. He feels as if his trading performance is lacking, although he’s relatively new to trading. He is easily upset. Even the slightest setback gets him down. He wonders, “Wh ..

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    112. Discovering Your Inner-worth

    John and Jay are both novice traders, but their approach to trading is markedly different. John is drawn to trading for profits. He fantasizes about achieving great wealth and imagines that when he am ..

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    113. Looking Inward For Your Mental Edge

    Jim is a master trader. He manages a multimillion-dollar hedge fund and has made substantial profits for the past five years. He drives a Mercedes and lives in a beautiful home in the affluent part of ..

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    114. Mastering the Inner-game

    If we had a crystal ball, trading would just be a matter of buying at a bottom, holding the stock as the price continued to rise, and selling near a top, right before the masses sell in a state of pan ..

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    115. Appreciating Your Inner-worth

    Jake is attending a party at his brother’s house. Old family friends are freely spreading gossip. Many are bragging about their recent accomplishments, and showing off their latest prizes. As a ..

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    116. Putting the Trade in the Right Perspective

    As a novice trader, Jack has just put on his tenth trade. He’s still new to trading, but he is optimistic that he will be successful. He wants to succeed. He thinks, “I want to prove that ..

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    117. Insufficient Justification

    A common problem among traders and investors is the tendency to sell profitable trades prematurely and hold losing trades unnecessarily.  Once we have held a losing trade for a long time, we have a s ..

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    118. Stay in the Moment

    Existential psychotherapists point out that people experience fear and anxiety when they think about, and regret, their past mistakes, or when they worry about an uncertain future. The antidote: Exper ..

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    119. Buy on Weakness, Sell on Strength: An Example of a Contrary Approach

    Many investment psychology books tout the virtues of thinking independently and acting like a rugged individualist: “Don’t follow the crowd. Be a contrarian.” It’s often useful ..

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    120. The Intuitive Mind

    Ever see a pattern emerge, and instinctively trust your gut instinct even though your logical mind told you otherwise? Sometimes it works, but other times your intuition may fail you. Scientists are f ..

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    121. Trusting Your Intuition

    Many people who begin trading think of it in purely mathematical terms: If the ultimate multiple regression equation could be devised, one could simply put in the inputs and get the outputs. And the o ..

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    122. Trusting Your Intuition Part 2

    Seasoned traders have learned to trust their intuition. Do you? How do you observe the world and gather information about it? Do you just want the facts and the specific details and none of that ̶ ..

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    123. Using Your Intuition

    Skillful traders know how to use their intuition to make quick, conclusive decisions. There are times when going with your “gut” instinct can be shrewdly accurate. There are also times, though, wh ..

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    124. The Intuitive Trader

    Stan and John have been following a stock and trying to anticipate the pivot point. Stan declares, “After looking at the troughs and moving averages over the past 30 periods, the facts indicate ..

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    125. When Intuition Fails

    Trading can be fast-paced. The astute trader knows how to make quick, intuitive decisions. Seasoned traders have learned to trust their hunches. They have extensive experience with the markets, and as ..

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    126. Investing in Yourself

    Are you putting time and money into honing your trading skills yet wondering how to justify it? As a novice trader, you may often wonder if it will be worth the time and effort in the end. Honing your ..

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    127. Getting the Job Done

    Do you ever make big plans for the trading day, but fall short of your expectations? Maybe during the off-hours, you decide to make a dozen trades, but when you get down to actually doing the work, yo ..

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    128. An Action-Oriented Approach

    Jim is a novice trader who has had three straight losses. He thinks, “I’m such a failure. I can’t stand losing. I’m disappointed. I just don’t want to think about it. I t ..

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    129. Be Adaptive

    It’s often bantered about among short-term traders (traders that are flat the majority of nights), whether, one should “have an opinion”.  Many traders will say that they don’t have an opinio ..

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    130. Addicted to Trading

    Winning traders have a passion for trading. They love what they do. They may even get a little thrill when they put on a trade. But there’s a huge difference between loving what you do and tradi ..

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    131. Transformed Through Adversity

    You see your true self when you hit rock bottom. What do all newbie traders fear? Blowing out their account and having to start over, it is a fear that haunts them. But ask any seasoned, profitable tr ..

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    132. Affirm To Win

    Trading can be exhilarating. When you see a trading plan come to fruition, you cannot help but feel a little special. There are those times, however, when you feel frustrated and disappointed. You reg ..

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    133. What Is a Good Company?

    In choosing a stock to trade, many traders try to identify a “good” company, but what actually is a “good” company? Many times a “good” company is merely based on a ..

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    134. All By Myself and Loving It

    As a trader, the bottom line is the amount of money you make on your trades and pocket. It doesn’t matter how you go about doing it, and it doesn’t matter how long it takes you, or how har ..

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    135. You Don’t Need To Be Perfect To Win

    If you’re driven to succeed, in all likelihood, you are an overachiever. And as an overachiever, you strive for perfection. The need for perfection can go too far, however. I’m all for str ..

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    136. Alternative Rewards: A Way to Keep Trading During Setbacks

    All animals, even humans, need a reward before they act. Why does something if you can’t get something out of it? Our strongest motives are to satisfy physical needs, such as hunger. When an ani ..

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    137. Driving Ambition

    Winning traders are driven by a strong motivation to achieve. Trading coaches and seasoned traders have observed that the most profitable traders are those who decided early in life to chase success. ..

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    138. A Must Trade: Sometimes It’s Better To Stand Aside

    A dream. Pure hope. A winning lottery ticket. These images capture what the masses think of trading. They don’t take it seriously, and in the past couple of years, they think anyone who trades is wa ..

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    139. Analysis Paralysis

    John has been looking at a profitable trade setup all day. He has tediously studied indicator after indicator, even though many are redundant and converge. He continues his search, nevertheless. He ir ..

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    140. Anticipating Outcomes

    Our emotions are closely tied to our expectations. If we expect to receive love and affection from our spouse after a long, stressful drive through an extra 60 minutes of rush hour traffic, we are ups ..

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    141. Avoid a Potential Disaster: Anticipate Earnings Reports

    When you ask most short-term traders if fundamental analysis ever plays a role in their decision-making, they usually roll their eyes. For the most part, this indifference is justified, particularly f ..

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    142. Don’t Be Caught Off-Guard: The Art of Anticipation

    How do you react to unanticipated events during the trading day? When you are trying to put on a position, are you upset when you can’t get a complete fill? When your DSL line goes down, do you ..

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    143. Keeping Up Appearances: A Dangerous Activity

    Have you ever been at a party and felt a need to impress others. Many see trading as an exciting profession. It’s a glamorous job. Traders are seen as rich and powerful. People like to hear abou ..

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    144. Getting in Sync with the Market

    Professional athletes practice extensively in preparation for a game. It’s critical to be well prepared, ready to perform at your best, and ready to take care of anything that may come your way. ..

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    145. Don’t Get Too Attached

    Jim has just purchased 500 shares of a hot new company he’s liked for years. In a calm and rational manner, he notes that a set of momentum indicators suggests the price will keep moving upward. Des ..

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    146. The Automatic Trader

    The winning trader has an intuitive feel for the markets. To trade profitably one must execute a trading strategy under ideal market conditions. If market conditions don’t match the strategy, th ..

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    147. Dare To Be Average

    When you put your money on the line, there’s a strong need to seek out perfection. Many novice traders believe they can get everything just right. They believe that they can locate infallible in ..

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    148. Avoid Denial: Confront Unacceptable Ideas

    Many people think the best way to cope with unacceptable ideas is to pretend that they are irrelevant and just don’t matter. It seems easier to deny the unpleasant or unacceptable than acknowled ..

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    149. The Background Factors That Throw Us Off

    Trading requires intense concentration. As easy as it sounds, it’s psychologically difficult to monitor trade and to prevent yourself from acting on impulse. The reasons for impulsive behavior a ..

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    150. One More Thing in the Back of Your Mind

    When you have a psychological conflict, it’s in your best interest to resolve it as soon as possible. As an old saying goes, when you ignore a conflict, “it’s just one more thing in ..

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    151. When You Fall Off the Horse

    At first, if you don’t succeed, try, try again. And when you fall off a horse, it’s wise to get back on. Are these sayings appropriate for trading? In some ways they are, but in some ways, ..

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    152. Getting Back Up

    It’s not the number of times you fail that matters. It is all about getting back up after you’ve been knocked down. Ask any successful person and you’ll find that he or she has exper ..

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    153. Emotional Baggage: How to Unload It

    Bob’s been trading for the past year. He’s still a novice, but he has made hundreds of trades. He’s going long on Intel today. He has a plan. He has managed his risk. This trade is j ..

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    155. Happy Traders Seek Out Balance

    Trading is a challenging business. Only the most skilled traders can make a living as an active, full-time trader. Trading experts suggest that novice traders approach trading the same way that studen ..

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    155. Balanced Optimism

    A reality of trading is that a trader must doggedly make trade after trade, yet may often face loss after loss before realizing a win. Trading requires persistence in the face of seemingly constant se ..

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    156. Beaten But Still Hanging In There

    Carl has dreamed of being a winning trader since he was a teenager. He tracked the market in high school and started trading stocks in college. But he has blown out twice in the last five years. He wo ..

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    157. Beat Stress Before It Beats You

    Did oil prices ruin your trading plans this week? Adverse events, such as foul weather in the Gulf, are just one of the many sources of stress an active trader must contend with. If you’re not c ..

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    158. Who’s Behind the Curtain?

    If you haven’t seen the “Wizard of Oz,” you are in for a treat. It is a great movie on multiple levels. The climax occurs when the heroine, Dorothy Gale, reveals that a great wizard is only a co ..

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    159. Appreciating the Beauty of the Markets

    Have you ever had one of those days where you wished you had stayed in bed rather than executed your first trade of the day? Perhaps you excitedly put together a trading plan the night before only to ..

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    160. The Best Laid Plans

    A common complaint of novice traders is that they just can’t seem to stick with their trading plans. Many novice traders develop a viable trading plan only to abandon it impulsively. What goes w ..

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    161. Don’t Be Afraid To Be Yourself

    There isn’t one right way to trade the markets. It’s tempting to emulate your favourite “Market Wizard,” but in the end, it’s essential to match your trading style to your personality. Some ..

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    162. How Accurately Do You Track Your Performance?

    Jim and Sam, two part-time online investors, are discussing the performance of their stock portfolios at lunch. Jim inquires, “How well did you do last year?” Sam with assurance declares, ..

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    163. Getting Ready for the One Big Moment

    Winning traders make consistent profits. One way to trade consistently is to minimize psychological pressure, and the best way to do that is to minimize risk to the point that the potential financial ..

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    164. The Big Picture

    Jim is focusing on a big trade that he’s just put on. He has 25% of his trading capital on the line, and he feels it would be a disaster if he doesn’t see a substantial profit. He can̵ ..

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    165. Taking Big Risks

    Why would anyone want to avoid success? ..

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    166. The Big Win

    The most prudent way to make money trading is to work at it consistently, and through hard work and persistence, make steady profits. ..

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    167. Paying Your Dues

    The great trader Jesse Livermore blew out his account more than once in his illustrious career. It’s scary to think about, but if you want to become one of the few who reach the top in this busi ..

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    168. Fighting Boredom

    These days, few traders find it profitable to scalp or trade intraday anymore. Most traders prefer to make swing trades, but swing trading can be boring at times. Depending on your total capital, it i ..

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    169. Don’t Overwork: Take a Break

    Trading the markets can be a mix of excitement and stress. It’s exciting to put on trades. It’s a thrill. You feel energized and thrive on the action. But it’s also stressful. You ..

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    170. Breaking Away From the Herd

    As evolved as we want to think humans are, there are times when people can act as mindless as a herd of cattle. It may not be all the time, but there are times when you wonder if people are thinking a ..

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    171. The Breakeven Point

    Once a trade is entered, there are two possible outcomes: on the light side it can make money; on the dark side, it can lose. Between the light side and the dark side is the breakeven point, and becau ..

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    172. Out with the old and in with the new

    “Old habits are hard to break.”  “It’s hard to teach an old dog new tricks.”  These sayings have a grain of truth to them. It’s often difficult to abandon old way ..

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    173. Looking on the Bright Side

    Winning traders approach trading scientifically. They develop hypotheses, devise sound trading plans, and test out their theories by executing a trade and seeing what happens. It’s very systemat ..

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    174. A Brutally Honest Look

    Trading is challenging. Many are drawn to trading, but few last very long. It’s difficult to face the cold, hard fact that trading is difficult. Many novice traders need to win. They are hoping that ..

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    175. Easing the Burden of Decision

    Is there anyone who does not feel at least a twinge of nervousness when he or she initiates a trade? It’s quite natural to feel butterflies when one’s bid or offer is hit – even for someone who ..

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    176. Hustle and Bustle Trading

    Many people these days feel pressure to perform. We don’t believe that we have the luxury of taking our time to patiently learn a profession, like trading. Instead, we must do things quickly. No ..

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    177. Stranded But Profitable

    If you were lost and alone on a desert island, with only a satellite connection to monitor market activity and place your trades, you would probably trade more profitably. What about the emotional sup ..

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    178. Staying Calm Under Pressure

    Many trading days are full of chaos and stress. Sometimes we are in a bad mood, while at other times, the markets don’t seem to cooperate with our trading plans. It’s natural to crack under the pr ..

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    179. Maintaining a Carefree Attitude

    The proper mindset can go far to improve one’s trading results.  Successful traders have a carefree attitude when it comes to trading.  They have little difficulty executing trades. They don’t s ..

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    180. Carefree and Easy

    In the Mark Twain classic, Tom Sawyer convinced his friends that whitewashing a fence was fun, rather than tedious, hard labour. The moral of the story: What we see as work depends on our perspective. ..

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    181. Cautious Optimism

    Dan’s been tracking IBM for five months. He knows the price pattern by heart, its ups and downs, and the conditions that precede and follow each new trend. Now it’s just a matter of psycho ..

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    182. The Centered Trader

    Profitable traders have full control over their emotions. They don’t allow emotions to interfere with their concentration. They focus on the markets, and through focused concentration, they can ..

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    183. Motivated To Change

    Are you the kind of trader who makes mistake after mistake, yet can’t figure out why you just can’t change? Perhaps you don’t follow your trading plan. Maybe you set your stops too c ..

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    184. What Do You Do When the Markets Change?

    Be a rugged individualist. Think independently. Take the contrary position occasionally. Anticipate changes in market conditions, and be ready with alternative plans.” These are common, yet some ..

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    185. Classic Chart Patterns: Know How to Use Them

    Technical analysis and short-term trading go hand in hand. The revelation that one can make huge profits by looking for reliable chart patterns that repeat with unfailing regularity has raised many tr ..

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    186. Accepting the Chaos

    A butterfly flaps its wings …a hurricane strikes miles away. According to Chaos Theory, a seemingly irrelevant action can precipitate, and contribute to, a major event. The right set of factors come ..

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    187. Clear and Immediate Payoffs

    “As a trader, I face failure almost every day. It can be stressful, but at least the objectives are clear: make profits. And they are immediate. I don’t have to make a sales pitch and wait ..

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    188. At Least You Know What to Expect

    It’s hard to become a consistently profitable trader. You’ve got to put in long hours, and many times, your hard work doesn’t pay. But when you become a seasoned trader, the situatio ..

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    189. Facing the Cold, Hard Facts

    One of the greatest struggles novice traders face is monitoring their progress carefully. Beginning traders have not yet developed the skills to trade profitably in a variety of market conditions. Und ..

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    190. The Big Comeback

    Despite all our best efforts, it’s hard to pick ourselves up after a fall. You’ve heard it time and again: Traders must learn to expect losses, take them in stride, and recover from them. ..

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    191. Appreciating Your Comfort Zone

    Trading in a peak performance state of mind enhances performance. When you enter this state of consciousness, it is easy to become lost in the flow; your full attention is focused exclusively on the m ..

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    192. Going All the Way

    So you’ve decided to become a trader. You’ve decided that you want to master the markets and take home huge profits. You’re not the only one. Each day, hordes of would-be traders tur ..

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    193. Matching Commitments To Expectations

    The number of profits you can expect to make is directly related to the amount of commitment you devote to trading. ..

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    194. Commit to Trading Success

    “Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which ..

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    194. Comparisons Can Be Harmful To Your Ego

    Unless we keep up with our neighbours, we feel like a failure. Throughout our lives, we have been taught to compete. We habitually compare ourselves to others and try to beat out our peers. As childre ..

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    196. The Detrimental Comparison

    Jim has been trading for six months. His performance isn’t spectacular, but it isn’t too bad either. He’s made a decent return. But Jim isn’t satisfied. He’s been reading ..

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    197. Keep to Yourself and Trade Independently

    Have you ever been tempted to go into a chat room and brag about how well you did on a good trading day? Perhaps you called up a buddy under the guise of giving emotional support when what you really ..

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    198. The Competitive Spirit: Learn to Tame It

    Throughout our lives, we are told to foster a competitive spirit. We compare ourselves to others, inspire ourselves to do better, and try to beat out our peers. As children playing sports, we are advi ..

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    199. Drawn to Complexity: When Keeping it Simple is Better

    In the mid-1980s, Steve Wozniak, the creator of the Apple II computer, was asked about the future of computing. Interestingly, in hindsight, he said he thought people were making too much of the home, ..

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    200. Complex and Always in Flux

    Alan Greenspan, in his opening remarks at the August 29, 2003 symposium sponsored by the Federal Reserve of Kansas City, said, “Uncertainty is not just an important feature of the monetary policy la ..

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    201. Full and Intense Concentration

    Your ability to concentrate fully and intensely can mean the difference between consistently taking home huge profits and barely staying above water. It’s vital that you pay attention to multipl ..

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    202. The Art of Concentration

    You can be highly motivated to trade, have limitless capital, and a foolproof trading strategy, but if you don’t devote your full concentration to the trade that you have on at the moment, you’ ..

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    203. Self-confidence: A Prerequisite for Financial Success

    Top-notch traders don’t follow the crowd. They lead it. They anticipate what the masses are doing, and capitalize on how they are mindlessly swayed by the current mood of the markets. Seasoned t ..

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    204. The Confident Trader

    Joe tells his friend, “I’m staying out of the markets for a few days.” “Why?” asks Tom. “I can’t trade under these conditions. I’m going to wait for the markets to change,” answers J ..

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    205. The Self-Confident Trader

    The self-confident trader is decisive. He or she carefully plans a trade, patiently waits for the ideal market conditions, and executes the trade effortlessly and flawlessly. There is no self-reproach ..

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    206. Pleasant Moods Reduce Confirmation Bias

    Whether you are a long-term investor or a short-term trader, you must look through reams of information, such as charts, analyst commentaries, and financial statements, to arrive at an astute decision ..

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    207. Don’t Be Afraid to Go Your Own Way

    Jim asks his friend, Marty, “Where have you been? I’ve been waiting for 15 minutes. They are ready to give our lunch reservations away.” Marty nervously replies, “Sorry Jim. I ..

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    208. You Can Go Your Own Way

    Sergeant Friday on the 1950s television drama “Dragnet” was fond of sticking to “just the facts.” Many police officers look at the world from a strict rule-oriented point of vi ..

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    209. The Consistent Trader

    The winning trader is a consistent trader. A winning trader puts on trade after trade in a free-flowing, carefree manner. Profits pile on with each trade. Trading consistently means approaching each t ..

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    210. The Quest for Consistency

    Two keywords you often hear in trading are consistency and discipline. A winning trader makes consistent profits. Here’s what that means. In contrast to seasoned traders, novice traders’ e ..

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    211. Don’t Catch a Bad Mood

    Winning traders are eternal optimists. They must be to survive. Markets are constantly changing. What works in one market doesn’t necessarily work in another. You can’t complacently expect ..