psychology of trading

This thing must be grinding your nerves to mush.

I’ve learned over as many years that “sideways” is a market dynamic that you “must” learn to deal with in order to survive. As the days grind on it gets easier and easier to just say “screw this!” and make some kind of a decision based in pure “emotion”.

That’s the idea. This type of market activity grinds equally on both sides, as bulls see “paper profits” diminishing, while bears can’t get enough traction to make a trade pay at all. The idea is to extract as much money from each sides as possible.

And there it is.

These days, it seems that “every day” brings reason for markets to just “sit there”. Waiting for the U.S to “go to war or not”, waiting for the U.S to “taper or not”, waiting for the U.S to “default/shutdown/ raise the debt ceiling” or not. See any pattern here?

Can these jack asses throw anything else on the pile while they’re at it?

You’ve got to just push through and not allow yourself to give in to it. That’s exactly what you’re supposed to do right?  Bulls continue to pile in on easing, bears pile in on “default speculation”.

Then “whoooooosh”! – both get their clocks cleaned.

I feel for you if you’re feeling the heat here. Markets are grinding nerves to pieces ( and I’ll say myself included). We need a move here, and you’ll want to be on the right side of it. Can the risk vs reward actually support further upside in “risk on”?

A common psychological reaction for traders ( when presented with a situation such as we’ve seen today ) is to jump in / make assumptions / over trade / freak out / spazz with the notion that:

• I’ve missed something so huge and now I MUST find a way to be a part of it.
• I’ve lost so much money on the wrong side of this move that I MUST place another trade in the opposite direction.
• I’ve now got this nailed down to an “absolute science “and will now look to double / triple my exposure as I’m sure to be a millionaire come sunrise.

Wrong. Wrong. Wrong.

Patience young grasshoppa.

• Yes you’ve missed something huge ( I did ). No big deal. These things happen many times throughout a year, and if you’ve survived at all – just be thankful.
• If you’ve lost so much money that you are compelled to place a “revenge trade” ( or even considering trading based essentially in your “need for revenge” – I COMMAND YOU TO STOP! – YOU ARE NOT TRADING……..YOU ARE GAMBLING.
• You made out really well and should be very pleased with yourself. Now take your profits ……go buy yourself ( and your family and friends ) something nice, and DON’T EXPECT THE SAME THING TO HAPPEN AGAIN TOMMOROW.

The psychology of trading will be the one element you struggle with the most, as most of you will likely blow your accounts long before you ever really address it – or have the opportunity to work on it at all.

You need to stay in the game…………………………… long enough to “understand the game”.

You’ll need to look back a lot further than most of your are interested.

Back to the war of 1812, and back even further to get your head wrapped around the “Rothschild Family”, Free Masonry and the birth of Central Banking.

Main stream media would have you believe this to be “conspiracy theory”, conjured up by a bunch of disgruntled whack jobs – but you’re used to that right? You watch it every single day on your television screens. The truth that is (right).

Incredibly you still find ways to “justify” why your investments just keep costing you money.  “Ya the market’s going for shit”, “Damn, I guess Europe caused it”, “Wow…War in Syria”….all the while Central Banks plotting every move.

You’d need to have your head examined if you don’t see / understand that Obama doesn’t “choose” the next head of the Federal Reserve. Larry Summers “stepping out of the race” is more likely due to death threats or sizeable pressure on Obama ( from….hmm I wonder who?) from external influences – the forces that DO CHOOSE the next head of the Federal Reserve.

Central Banks ( and in particular the Federal Reserve) sit one notch “above” government – and if you don’t believe it then ask yourself this:

Why the f#/%K would a government have a need to “borrow money” from an independent entity holding an exclusive license to “print that money” ? And in turn “pay interest” to this entity?!?!

Open your eyes!

It’s no wonder I need keep this blog anonymous as – I’m now concerned that “the men in black” may be lurking outside my home. Funny stuff – yet …not really so funny.

Think about it.

We’ve got issues facing the entire planet. War in Syria, the Fukushima spill in Japan, elections in Europe, and the never-ending “gong show” of blunders playing out in the U.S.

We’ve also got stock markets ( completely contained and unto themselves ) in emerging markets such as Brasil, Colombia, Indonesia,Europe, Canada and the list goes on.

The Dow Jones Industrial Average is composed of a rinky dink “30 companies in the U.S”! – 30 companies listed in the most rigged / manipulated index on the planet!!  30 companies!  Seriously – Who gives a shit?!

Can you imagine anyone outside the U.S ( or more so anyone with any important global influence / significant contribution to their own local economy / position of strength ) during times of global “risk aversion” giving a rat’s ass about the plight of 30 piddly companies in a single (and completely rigged ) stock exchange in a single country so far in debt it goes broke ( and just raises it’s credit card limit ) every 6 months!?

Common!

Open you eyes. Pull up some new charts. Get your head out of the sand. Seriously.

It’s a “not knowing the forest from the trees” type thing.

An index composed of 30 American companies , and those companies likely being “the most influenced” by Fed intervention, and promoted in the media via 6 major companies OWNED BY THE SAME INVESTOR GROUP AS THE FED – is an index I can do without.

Ditch it.  Pronto.

Story by F Kong at Google +