How The Odds Are Against You When It Comes To Retail Trading
This especially if your new to the Financial Markets and new to trading, your biggest initial challenge is that you’re immediately trading against all of the brightest and concise minds which the financial world and society in general has been able to produce.
So if you happen to be a retail investor in any of the financial markets, you’re usually putting up your own capital and trading against all of these money geniuses which are produced by all of the top institutions, while you’re most likely armed with far less trading resources and information.
All of the professional Money Managers as well as the institutional investors such as the investment bankers and hedge fund managers, will always recruit the brightest graduates from all of the prestigious financial programs and the top notch schools available to them, such as Oxford or Harvard, and recruit them as traders.
They also have the edge, the backing and the experience of having years and often decades of active hands on trading experience who are all familiar with the “inside” nuances of profitable trading. You can be absolutely assured that they’re indeed the absolute best of the crop.
And because all of these newly recruited institutional traders have the immediate resources available to them, such as being able to draw on the experience of having the ability to view the “order flow” methods on their clearing system, have instant trade execution, immediate shorting, and an absolute seemingly endless supply of money to trade with. They also have at their disposal, personal assistance analysts, private research resources, trading psychologists, and “insider” information.
This obvious advantage is also greatly compounded on the OTC, due to it’s perceived and vast “corruption” which many claim is the mother and primary reason of the volatility of certain markets and funds.
You The Lone Trader
It’s basically irrelevant the fact that you yourself may have a high I.Q. which will make any self-respecting member of Mensa blush with envy, or the fact that you’re an extremely skilled Technical Analyst guru. This means absolutely nothing in the financial markets that you’re up against, where the traders who are just as intelligent as you are. Also, there’s also a collection of hundreds of traders exactly like you, who also has the infinite resources at their disposal, something you don’t have.
So it becomes vitally essential for any individual trader who’s serious about trading the markets to constantly question as well as refine and redefine their mental trading game. What this should entail is carefully examining and tweaking their trading mindset, often midstream, while and during the trading day.
You need to evaluate what your exact thought processes are, as well as how your emotions are directly influencing the trades which your making. You need to mentally prepare yourself for the trading day that’s ahead, with no distractions.
Set Up A Thinking Trade Program
You’re not only required to do thorough and concise market research, but you also need to engage in activities which are conductive to promoting and perfecting your trading mindset. This should include constant up to the minute performance evaluations.
What this ultimately means is constantly researching and then learning new trading techniques, as well as reading up on the latest, new and improved trading psychology methods.
This way, you can then apply these new concepts to your current trading system, as well as applying the absolute essential methods of strict discipline.
It’s not unfathomable how anyone could effectively trade the markets without using a regimented discipline program, as all of the improvement towards one’s psychological game needs “watching and tracking the mind,” as a complete detachment from one’s trading. This is the definition of meditation and discipline.
So before you begin trading, it’s essential that you refine your mental trading game first. Set up strict trading rules and then follow them regardless of what the short term results are. Read as many articles and publications as you can regarding trading psychology, as this is the basis of your entire trading foundation. Adhere to the directness as well as the principles of the various messages and methods.