As a novice trader, you'll often feel the need to trade.
You may be bored or frustrated. Or you just want to try a certain type of trade.
STOP!
Realize that you don't have to be trading all the time to be successful. In fact not trading is often the very best decision you can make.
The market tells you when to trade. If you feel the urge to place a trade or find yourself chasing a trade, walk away from the computer. Better still; take the opportunity to meet a friend for coffee.
The trades you do when you're feeling the "need" will usually be lemons ? and leave you with a very bitter taste in your mouth!
They will usually not have clear signals, but you've convinced yourself they are there. After losing your premium, or much of it, you'll look back and wonder how you could possibly have entered that trade. It's happened to all of us, so don't be too hard on yourself. Just don't do it again.
The market is going to do what the market is going to do, not what you need or want it to do!
And remember the old saying, "If you can't see it, it's not there". So if you stand back from your computer and the chart pattern or signal doesn't jump out at you, it's not there.
EASY IS BEST
The novice is constantly staring at charts, looking for and often inventing signals. If you have your strategy in place and you wait for the patterns to form, your entry points will FEEL easy. They will be obvious ? you won't need to be searching for them.
WRITE IT DOWN
Remember to keep a log book. We keep one, which includes any potential trades ? those which look like they will possibly provide an entry in the near future. It's good to see if they eventually develop into a trade. It will help guide you up to a point where you make a decision whether to enter, or to leave it alone.
Also, when you enter a trade, log it in your book with a few details and, commit to a stop loss point and a profit level where you will be happy to exit the trade. Remember, don't be greedy ? or you'll see your premium reach that point, pass it and quickly drop back past your original exit point. You'll then see how you would have been happy to exit at your prescribed price!
Much of the time there won't be any trades for you to enter, so it leaves you with plenty of spare time for gaining extra knowledge and enjoying life. You probably won't trade more than a few times a week. So, you can see, there's a lot of time to be analysing charts ? and feeling the NEED to trade.
Be strong and disciplined!
David Chandler
Ordinary People Making Extraordinary Profits!
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The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn't worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.