Confidence can be an important psychological tool for the trader – important enough to make the difference between a winning trade and a losing trade. When you develop your trading plan, it is obviously important that you have confidence in its accuracy and usefulness and in your belief that you can follow your plan closely and execute it successfully.
 
Often, traders fall into a mental “I know it all” trap, where they use their confidence to nurture their ego instead of using it to be appropriately decisive in their trading and …

90% of option traders lose money

Even people who are highly knowledgeable about the financial markets and work in the industry do poorly. There is evidence all over the place that losing money in options is normal and “everyone in the know knows it”.
I never got good at options trading, but I never encountered anyone else who was good at it, either. Some people admitted that they lost money overall, while others, although they spoke readily of their wins, were evasive about losses and totals. This was less surprising when I …

An avaricious or keen desire for profits is one of the most prevalent causes of failure in speculation. This weakness is general among traders. They desire “just a little more ” profit. If the stock or commodity bought advances, then that’s proof to them that it will advance further and so they hang on. They usually overstay and thus miss their market. If they fail to obtain the top price and it reacts, then they assure or console themselves by the expression: “Oh, it will come back.” It may “come …

Nifty did again the Unexpected Making everyone Bearish Today  Blue Channel talking about 4600 Traders holding Bulk of Puts and Than came the U-turn and an awesome rise in 15 mins.
Traders who were short  need to cover at high price or might be still holding the shorts in a HOPE of nifty coming down.(Well it can but I am a system trader and System is in up mode)
100 % traders are bearish/bullish – how can market fall now or rise? ?
For every trade to take place there must be a …

As 2011 come to an end let me share an important aspect of trading
Keeping losses small in order to avoid huge losses
Why is that so?
From a psychological point of view nobody wants to sell at a loss as in most situations in life making mistakes and admitting them is associated with being a loser. That’s why most people prefer sticking to a losing position. They don’t want to be labeled a loser. So they start hoping their position will turn around and end up being a huge winner. The stock …

Before taking a trade how many times have you thought i will buy at bottom and sell at top.
How many times have you removed your Stoploss after feeding it but removed it once price started coming near Sl.
How many times have you lost all profits earned in a trade and end up being a losser
If you have the above mentioned problems in trading

Reason is need for perfection

 
A common trait among newer traders, or among traders that are not profitable is a need for perfection. With so much noise in the …

Trading is a profession which requires a person to be disciplined, control over his emotion, risk management.

90% of Traders fails in this profession only 10% excel.

 
So what makes trading so difficult?
I have compiled few rules which you should adhere with and read it daily when you had a bad day.
These are some of the trading rules which are universally valid for stock/commodity trading.
Take a print out and nail it on your trading desk.

Never risk more than 10% of your trading capital in a single trade:Try to distribute your trading capital …

Today Nifty opened Gap Down and than continued its downtrend till it reached the 4842 levels set up a panic bottom than a pullback and than again a decline before closing hours.How many traders blindly shorted at open levels and end up in losses and How many must be averaging there longs at 5100-5000 levels only based on there emotions and intuition. As a Trader you should always trade on your trading system not with your emotions.

Buy and Sell only when your levels comes not on your emotions.

I have interacted …

“Good trading is 10% technology and 90% psychology. People defeat themselves. It doesn’t matter how often you repeat basic trading principles when almost no one will practice them.” (Maoxian)
People lose money at the stock market for very simple reasons:

They don’t have a method at all. They rely on other people opinions.
People don’t have a winning method. The method they are trading has a negative expectancy. Being disciplined about stop losses and position sizing won’t help, if you are trading a losing method. Expectancy changes with volatility. When your method stops …

From a psychological point of view nobody wants to sell at a loss as in most situations in life making mistakes and admitting them is associated with being a loser. That’s why most people prefer sticking to a losing position. They don’t want to be labeled a loser. So they start hoping their position will turn around and end up being a huge winner. The stock then keeps tanking. Then they hope they will be able to sell for a break even. The stock then goes down even more. That’s …