Trading Concepts Inc: Your path to controlling your money and time

I am sure that you have seen a news report or two that claims that 50% of all day traders "bust out" and lose all of their money. Further, the report usually depicts some poor fellow who has spent the family savings and is in the process of bankrupcy or losing his home.

Is it true?

Well, in a certain sense the stories are true. As a long-time trader, I have seen more than my share of day traders lose all of their money and been forced to leave the profession. Sometimes these individuals have left high paying jobs to day trade full time and are forced to re-enter the workforce under-employed, or at least at jobs that pay considerably less than the jobs they left to day trade.

Why?

There are many reasons individuals fail trading, and it's not because the day traders are less-than-intelligent people. There have been several articles written in recent years concerning the failure of day traders, and most point to the emotional aspect of maintaining a proper trading perspective. All to often traders abandon great systems of trading and take unacceptable amounts of risk in hopes of hitting "the big one." Trading on emotion is the recipe of certain failure in day trading.

Why do rational traders sometimes act irrationally?

One of the toughest tenets of trading to accept is that certain trades are going to be losers. No trading system or methodology can assure that every trade is going to attain success. The market just doesn't work that way. My personal philosophy is to never risk more than 5% of my money on any given trade and have target profit limits set and stops loss orders in place in case my trade goes sour. I never ride a trade down in hopes of it turning around. I never "double down". Quite simply, if a trade doesn't work the way I expected, I cut my losses and move on to look for another trade set up that looks appealing.

Failure is an unpleasant aspect of trading, yet every trader fails in one trade, or more, throughout the course of the trading day. Further, it is common to see traders increase their lot size if they are having a bad day in an effort to "catch up" to their trading expectations.

These are all part of the undisciplined traders emotional make up and are symptoms that doom a trader to failure. There are days when I make two or three clunker trades and decide to turn the computer off. Either the market is acting in a way that is not condusive to my style of trading or I am trading poorly, I never try to over analyze the reasons for my failure. I only know that on a given day my results are unsatisfactory and the best thing I can do is go golfing.

The emotional side of trading is the least studied and most poorly understood aspect of trading. Many traders spend thousands of dollars learning trading technique and complicated systems of trading, yet fail to conquer the emotional side of trade. The emotional side of trading is fairly simiple, albeit very difficult to master, and is to simply not allow emotions to enter into your trading psychology. Sounds easy, doesn't it?

It's far from easy, and I can tell you that I have fallen victim to my own emotions on numerous trades. I know that any time I feel like I know what the market is going to do and become convinced that a trade "must" work...I am in deep trouble because the maxim "the market is always right" is important to understand. The only variable that can be wrong when you trade is YOU.

The chaotic nature of markets causes many inefficiencies in market pricing that can come into play at random times. If you are in a trade when these market inefficiencies come into play, you lose. It is really that simple and a smart trader exits his trade, takes his losses and moves on.

The study of emotions in trading is fairly new and several books have been written on the topic, I recommend Trading Concepts, Inc trading course..

Learn to control your emotions and execute the your trading systems and you will have great results.

The newspaper have for years written enumerable article about stocks busts, market crashes and the economic calamities that face stock investors. It makes good news, and adds to the negative image of investing in equities and the market in general.

But those calamities are problems that face long term investors. You know, the buy and hold guys. For years, the general line of thinking was to buy a stock and hold onto for years and reap the rewards in your retirement years. Of course, the dynamic nature of the stock has, to a certain extent, changed that line of thinking.

Of course, there are still the hordes of mutual fund holders who have invested untold billions in these investment vehicles. I have a low opinion of mutual funds, as an investor cannot exit a fund until the end of the day. Additionally, very few fund managers even come close to matching the indexes they are supposed to be imitating. Why pay exorbitant fees for substandard performance? I will never understand it, but there are trillions of dollars still invested in these investment vehicles.

However, recent changes in investment structuring from the Chicago Mercantile Exchange has made investment for primary income a very attainable goal. Several product lines are aimed directly at the consumer market and priced well within the average budget. The are called e-mini's and are investments that are traded during the day, and seldom held overnight. No worrying about the stock market here, you are in complete control of your investment future.

I don't want to give you the impression that these investment are like ATM machines that simply spit out money all day, but with proper training and practice a trader can easily earn $500 a day or more and not hold any positions over night. Of course, most individuals have never given serious consideration to investing in the markets, which many consider relegated to Wall Street experts. But nothing could be farther from the truth.

There are many courses, some home study, that are reasonably priced that will give you more than the pre-requisite knowledge you need to be an effective trader. Thousands of people, from housewives to businessman, have turned to trading and greatly increased their income and improved their lifestyle.

The secret is training. It is very important that a trader spends time learning the slightly illogical movements of the market. Again, with proper knowledge this illogical movement becomes second nature to understand.

The benefits to trading for a living are many fold:

1. More time with your family and children.
2. No more boss, your self-discipline is the key to success.
3. Time for leisure activities and enjoying the fine things in life.
4. You control your income. You have the skill to make money, and nobody can take that away from you, fire you, or change your job. More than anything, once you learn to trade, you can become completely in control of your lifestyle.
So, I propose that you consider exploring the benefits of trading and see if it suits you. It's not for everyone, but it's wonderful for a lot more people, especially if they have the knowledge of what is possible in trading right from your home. You are your own boss, and master of you own lifestyle. No more corporate mentality to deal with.