This guest post is by Wilfred Brockmann.
Fear. Greed. Perfectionism. Pride. Anger. Impatience. Recklessness.
These are cited as the 7 Deadly Sins of Trading by Ruth Barrons Roosevelt in her book of the same name. As someone who has traded long enough to be an expert on all of these mistakes, let me assure you that overcoming these emotional breakdowns is more important that understanding any technical indicator, fundamental ratio, news release or trading strategy.
Overcoming emotion is the most difficult part of trading and will separate those who succeed from the majority who fail.
Simply saying that you will avoid making these mistakes is easy but doing so when under the pressure that the market inflicts is much more difficult. Every trader needs to go through the list of emotional breakdowns above and think about how they react to these emotions. Write down the mistakes you make because of fear or greed. Think about times when you have been reckless in your trading and write down a plan to overcome them.
Before you make another trade, create a plan to overcome the seven deadly sins of trading. Doing so will do more to your profit than anything else you can do. Have a plan and follow it. Follow your rules and don’t deviate from them.
BeyondETFs Pro can help.