Thursday, October 13, 2011

A Basic Introduction to the Trading Mindset

Many people talk about the wonders of trading and how it can best be addressed, but understanding how to determine and identify your entry signals can go a long way in setting the correct path to trading. Therefore, a basic introduction to trading must be in order.

The first goal in trading is for profit, since the penultimate goal for it is to sell for a profit. But take notice that trading is like gambling, where one cannot ascertain or know what exact market forces are at play and what it can ultimately do to spell your trading choices.

Self assurance is another key to your trading success. No one will show you what to do next, you have to plan for yourself, particularly since there are no hard and fast guidelines for this career.

Other people may tell you what to do, and they could be correct for a little while, but please try to remember that the market goes up and down, and trading is about watching the market, analyzing it, and taking action on your own.

Understand and regulate your opportunities and risks.

Many people grabbing opportunities mean that the really great ones disappear.

The random opportunity that will eventually pop up in a trader's career is a crisis in supply. Something has broken off the normal process of supply and demand, dramatically raising the price...and this is a fleeting chance.

Many people will also be chasing these opportunities the same as you do. These may be the regular suppliers, those with surplus stock, or another trader with a source elsewhere.

Wisely judge the risk and do your thing.

Scamming is a job for some, so always be wary of people offering unprincipled deals or tempting offers. Thoroughly read the conditions of a contract, count zeros, and just be cognizant of every possible fine print on documents before signing.

Gambling to win means not letting the house make the rules. The difference between dumb luck and achievement lies in the amount of risk managed. Sometimes you could get a lucky break and at other times not, so risk analysis and management lie at the center of any method that can be considered reliable.

Setbacks happen, and this is a risk in trading, where there are damages and losses. Play at the stakes and risk levels you can afford, don't lay down all your cards and have nothing left to pick up on. Make every effort to understand the market. This will help a lot in figuring out how you could establish the ups and downs of the market you are in.

Each person needs to identify his piece of the pie and the item markets he is interested in.

Trading is a world of compound interest, trials and opportunities. You can invest in buying and selling more items in a single item market, you can pick up when you felt there is a downturn on one item, or you can diversify into other types of items.

The essence of the market is purposeful chaos. This is because the market is the aggregate actions of thousands of people, therefore it cannot be trusted. It will shift on you at the flick of a finger, cancel plans, wipe out profits, render prior knowledge obsolete or even render you flat broke if you don't play your cards right. Patterns change, so don't just rely on it totally. As what the previous point says, one day it could be favorable for you, but that can change the next day, even the next heartbeat. So this is a basic introduction to a trading mindset and this can help you on your way to more profitable gains and planned risks.

Todd Gaster is a NLP Trainer and Brian Tracy business coach. Todd is the founder of My Wealth Coach, a free tele-seminar series where he interviews today's leaders in the wealth creation [] industry. Get it now at ==> My Wealth Coach []

By Todd_Gaster

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