|
PureBytes Links
Trading Reference Links
|
Article is shorter than the url.
The Human Aspect and The Human Factor
by Eli Weiss
As a trader and a broker I have seen many clients and other investors
become rich and poor with the same advice from the same person. How
come?
What makes a person successful is not the system or the set of rules
that she or he tries to follow, nor is it not the broker. Rather, it
is the personality, the attitude and the luck of attachment to human
emotion that make one person more successful then the other.
It is very interesting that maybe the one thing that incorporates all
traders alike is the fact that they look for a SYSTEM - that is a
set of rules to be governed by.
Or for that matter a mechanism to make money, some type of formula.
I have always believed that if the majority are all looking in the
same place for the same thing or follow the same rules then you ought
to look in a different direction.
If you look at great traders they may have a broad sense of rules but
they trade their understanding of the market. Often there are perhaps
some vague rules about money management but not for trading itself.
One thing that mostly defines THE REAL TRADERS i.e. the successful
investors and business. People all around Is the a-word:
ACTION
If you go deeper into this issue, you will find a deep underlying
sense of security, a sense that what ever will happen everything will
be always be okay. These people have great trust that things will
ultimately go the way they planned it.
Interestingly, I have also found that they do not use their brain
when in the thick of trading! Yes I know you would not believe me but
think about this for a moment. If every body uses their brains to
make logical decisions and given the understanding that if every body
makes the same move it is wrong then...
I am not saying do not use your brain but you do that before trading
during the process of analysis when you evaluate the trade. When you
act you do not use the brain, essentially you must act intuitively,
or instinctively. There is no scope for any thinking to take place at
that time. There is no time for "over thinking" nor considering fear
or greed to go into the trading process at that time. Rather, the
attitude is:
JUST DO IT
Most investors "over think." Yet, at its core, trading is not high
mathematics, there are only 3 options:
BUY, SELL or DO NOTHING
Another aspect that I have found interesting is that successful
traders do not feel sorry for themselves when they take a hit.
Rather, they continue like it never happened. Their ability to be
detached is a major issue. Where the average investor will continue
to go on feeling sorry for him self, the great traders have simply
brushed the loss off. (If you delve deeper into the thinking of where
that came from you will understand it comes from the sense that I am
such a good person I do not deserve to lose - a common problem for
most average investors.) The biggest traders I have met do not feel
they are so good they ought never to lose, rather they are extremely
humble.
In a nutshell there are 3 points that do makes a difference:
1) THE ABILITY TO TAKE ACTION QUICKLY (EVALUATE AND ACT)
2) THE SENSE OF SECURITY THAT EVERYTHING WILL BE OK EVEN YOU GOT HIT
IN THE LAST TRADE
3) DETACHMENT TO FEELINGS AND TO SELF-PITY (THE GREAT TRADERS DO NOT
FEEL SORRY FOR THEMSELVES).
One other issue is DISCIPLINE. We have been told to be disciplined
and follow a set of rules no matter what. Well if you take this one
step further then every teacher will tell you that the best student
he has is the one that ADAPTS the teaching to his own personality
i.e. one that does not precisely follow the rules THE WAY THE TEACHER
TEACHES IT..
In essence, what I wanted to show in this article is that not
following the rules is the only rule a trader should apply.
Eli Weiss
Mr. WEISS IS A BROKER AND A TRADER.
Or for something completely different try Patrick Youngs new book
The New Capital Market Revolution: The Winners, Losers and the Future
of Finance
Amazon.com
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|