“What The Wall Street Hot Shots Won’t Tell You!”
Bought to you by the Stockmarket Genie
Part One – Is Trading For Me?
Before you make any commitment to begin or even to
continue trading we believe you must
honestly ask yourself; “Is stock trading for me?”
Many programs will tell you any one can make money in the
stock market and I guess technically they are right. But
the reality is, for most, failure is inevitable.
Why do so many people fail at trading? The short answer
is – because of who they are.
You see, the major limits to your success are placed
there by you. As we have pointed out, trading is a mind
game. So to a large extent your success is controlled by
your beliefs and actions.
We want to examine this issue in some detail because,
although at the moment you may be skeptical, it really is
the key to your success or failure.
Apart from inadequate capital and poor money management,
novice traders usually fail for one or more of the
following reasons:
lack of commitment
lack of knowledge
self-limiting beliefs
ego
poor state of mind
lack of focus
undisciplined
no strategy
failure to accept responsibility
lack of perseverance.
Traders who don’t address these issues will not survive.
And the statistics show this to be true.
We address these matters in more detail in our StockMarket Genie System,
but for now let’s just touch on what is meant by each of these problems.
Commitment
We cannot overstate the critical importance of
commitment.
Many novice traders get frustrated when they don’t have
instant success. Without real commitment they will not do
what is necessary to achieve success.
Knowledge
Lack of knowledge, which is a major cause of
failure, is a result of an individual’s attitude. How
anyone thinks they can enter the stock market without
training amazes us. Yet it happens all the time. People
who accept that golf lessons are necessary before they head
out onto the course will start trading with little or no
knowledge.
Because you are reading this we assume you do not share
that view. This is a major step in the right direction and
you are to be congratulated. But whilst knowledge is a key
requirement it is not the most important aspect to success
as a trader.
Most novice traders fail to appreciate the level of skill
needed to trade successfully. They have no system and
resort to guessing or the use of tips from friends. They
are effectively gambling, not trading.
At the same time, too much information can lead to
overload and inaction. It is far better to narrow your
focus and concentrate on just a portion of the market.
We cover this concept in depth in our StockMarket Genie
tutorials.
GENIE TIP
Do not confuse information with knowledge.
Beliefs
Traders who do not have a positive belief system
or cannot reconcile their beliefs to the actions of the
market do not survive.
Self-doubt will destroy you as a trader. In particular,
it is critical that you do not tie your self-worth to your
actions in the market. Despite the emotional attachment
that you might feel, you must accept that whether one of
your trades proves to be profitable or not, it is not a
reflection of your value as a person.
This can be a critical distinction when you first begin
trading.
GENIE TIP
Don’t tie your self-worth to any individual trade.
GENIE TIP
Your success or failure in the market depends on your
thoughts and feelings.
GENIE TIP
Remember that you always have a choice in the stock market.
Ego
Ego is one of the greatest enemies to stock market
success.
Your ego needs to win all the time and wants to win now,
if not sooner. It can’t stand being wrong. And so it
rationalizes events and denies reality.
You must be able to perceive the market how it is, not how
you want to believe it is. But it is difficult to clearly
see price action if your ego is in the way.
Ego makes us take small profits but large losses. It
argues that even a small profit is a win. But a loss hurts
and instead of accepting a small loss we try and get it back.
Men in particular are prone to say, “I’m going to make
back that $1000 loss, no matter how long it takes!”
Ego makes us sell stocks that go up and keep the ones that
go down. If a stock price increases there is immediate
gratification in being right so taking quick profits feels
good. And we won’t sell the bad ones because we have then
made a loss.
Do you see the logic here? We tell ourselves that we
haven’t made a loss until we sell. So if we don’t sell, we
can’t make a loss!
State of Mind
The stock market is an unusual environment.
It is a pressure cooker type atmosphere for those
unfamiliar with it and it can generate emotional and
irrational behavior.
The market is a large group of people trading their
perceptions. Throw lots of money into the equation and it
is not surprising how emotionally charged an environment it
can be. The power of group psychology and the mob
mentality ensures that irrational action is commonplace.
At a personal level, fear and greed are the primary
emotions at work. And stress and anxiety are common issues
that need to be dealt with.
Probably the strongest mindset with novice traders (and
many who have traded for a long time) is the fear of
failure – the fear of loss. We will come back to this key
issue shortly.
GENIE TIP
Fear blinds us to opportunity. Greed blinds us to danger.
GENIE TIP
Have a healthy regard for the market but don’t be
intimidated or fearful. Find a balance between confidence
and respect.
GENIE TIP
Everyone is afraid. It is how you respond to that fear
that determines whether you succeed.
Focus
If there was one topic that we would stress above
most others it is focus.
The ability to concentrate on the present moment to the
exclusion of other distractions is vital when you are
trading. And one of the great things about focus is that
fear and anxiety actually disappear when you are
concentrating on the task at hand.
Traders who don’t learn how to focus will be continually
distracted and will find it hard to make decisions.
GENIE TIP
To trade well you must learn to stay in the moment.
GENIE TIP
Focus eliminates fear.
Discipline
Discipline is so important in trading. You
need it to do the things that you have to do, even when you
might not want to. Such things as analysis; risk control;
money management and record keeping. All are critical and
all require discipline.
Discipline is also necessary to maintain focus and to
follow your trading system. Most importantly, it is
critical when you suffer a string of losses. As it is
discipline that will get you back on the horse.
GENIE TIP
The vast majority of traders lose money not
because of their trading strategy but because of their lack
of discipline.
GENIE TIP
There are no rules in the market. You have to develop
your own. And then follow them.
Strategy
You need to find a trading system that works but,
more importantly, one that you trust and are comfortable
with. You then have to apply it and this is where
discipline comes in.
But the truth is that most novice traders concentrate on
this subject and particularly entry signals, far too much.
The reality is that good risk and money management backed
by a supportive belief system is far more important.
Don’t get us wrong. Having a valid trading system is
critical to your success. Just don’t fall into the common
trap of thinking that it is all you need.
GENIE TIP
Your state of mind is more important to your success than
your trading system.
GENIE TIP
It is you, not your system that will determine your success.
Responsibility
Your trading success is in your hands. It
is your responsibility, no-one else’s.
Traders who don’t accept this will fail. Because they
will always be blaming someone or something for their
mistakes and never learning from them.
GENIE TIP
You are responsible for your success. No one else.
Perseverance
Without action, knowledge is useless. Massive
action is the key to real success.
Many traders begin with great enthusiasm but become easily
disillusioned. Perseverance is required to get beyond this
stage and to start to reap the rewards.
As Winston Churchill famously said: “Never, never, never give up.”
That’s it for this issue of “What The Wall Street Hot
Shots Won’t Tell You!”, I hope you have found something
that is of help to you.
If you have anything you want to see covered in this course
please don’t hesitate to email us at the address below.
Keep a look out in your inbox for part 2 of this course
which covers: The biggest single mistake you could ever
make! Whatever you do, DON’T MISS IT or you could go bust!
This free course is brought to you by the StockMarket
Genie(TM) Trading System.
Remember “Ordinary People Making Extraordinary Profits”
Keries
