Tony's advice on common psychological issues

...cont'd discussion about How to Take Money from Wall Street: Learn to Profit in Bull and Bear Markets

Tony has advice on psychological matters including the following.

Supportive Environment. If you family opposes your engagement in trading, then you likely will fail at it.

Faith. You must believe that you can succeed at trading or else you won’t.

Attitude. Every day before you trade, you must check yourself to see if you have a positive attitude that day. If not, skip out on trading that day.

Patience. You must exercise patience in waiting for trades that fit your trading plan. Second, when you get into a trade, you must patiently hold on to it until you get an exit signal pursuant to your trading plan.

Losing is part of the job. If you can’t accept that, don’t trade.

Trade management. Manage each trade as if you’ve completely forgotten about what happened on past trades so those past trades don’t cause you to trade based on emotions.

Confidence. Trust yourself to make the right judgment call.

How to think the right way. Look for the positives when trades don’t turn out the way you wanted.

Discipline. Write out your trading plan so you know what it is you’re supposed to do.

Taking the blame. Consider what it is that is within your control to change when things don’t go the way you want. Things within your control are your own role in whatever went wrong.

Pressure. If you can’t handle it, quit.

Ego. Let your ego be your friend instead of your enemy. You need it to trade, but it can hurt your trading.

Comfort level. Trade in a way that feels comfortable.

Winning streaks. Use the same trading strategy throughout your winning streak.

Losing streaks. Take a break and come back later to trade. Make small profitable trades to regain your confidence.

Regrouping after a big loss. Take a break and come back later. Start your comeback with a trade in a longer time frame than usual.

You don’t have to trade everyday.

The stock market is not a battlefield.

The devils of stock trading. These are greed, fear and hindsight.

Finally, Tony says don’t bother trying to use news for finding stocks to trade. Instead, he says to find stocks to trade in the following way:

1. Your own watchlist composed of favorite stocks that you regularly trade.

2. Sector indicies.

3. Real-time scans based on above average intra-day volume.

Half the pages in the book is devoted to the third category of stock selection. Luckily, the first half of the book is valuable because the second half isn't.

...back next week...

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