I was hoping to post this last night but didnt manage to find the time to do so but it is here for you now. As we are awaiting news today I will not post any charts until tomorrow.
A new trader by definition would be someone who has recently entered the world of trading. However, there are many people who have been trading for years and I would still be refer to them as a new trader even though they would refer to themselves as a seasoned trader.
Many people start out with good intentions and use a quick and simple technique such as stochastics overbought/oversold or RSI convergence/divergence to start trading and even make money the first few times they use it. Then this wonderful technique they have discovered failed yesterday and so starts the inevitable cycle of always being a new trader.
Here is a simple question for you. Two traders both been trading exactly a year. Trader A has been trading with two techniques for a year and Trader B has been trading with a different technique every six weeks. Who has the most trading experience?
The answer is Trader A. Trader B who I refer to as Bee Traders are those that will go from one technique to another just like a bee goes from one flower to another. The Bee Trader is always in search of the holy grail but as all you readers of this site know, there is no holy grail. The Bee Trader will also have high emotions when trading and be stressed most of the time when in a position and think they are missing out when not in a position so will force themselves to enter a trade regardless of the chart telling them otherwise. The other common fault is they see the price moving rapidly and decide to chase the trade only to find themselves buying at the top of an uptrend seconds before it drops or vice versa.
To be an A Trader you need to have control of your emotions but no matter how good a trader or how experienced a trader you are, emotions always play a part. The trick is to remove the emotion from your trading. So how does a new trader remove the excitement and emotion from trading the markets?
Statistics have shown that more than 90% of individuals who start to trade will lose all there money from there trading account normally within the first six months yet commercial traders who trade with millions and billions of our money continue to make money year after year and have done so for decades. The reason is they trade without emotion and with a system.
Using a form of system trading will in most eliminate the emotions. Aim to be disciplined and ice cool towards your trading system. If you find the efficiency of your system is very low then tweak it to suit you more or consider changing it if it fails most of the time.
An ice cool attitude, mental strength and a good trading system that you commit to execute when signalled to do so will open the doors to the pathway of the seasoned succesful trader.
Good luck today.
