Be yourself when trading

The stock markets are composed of people, lots of them with many different roles. Fellow market participants trade the same stocks you’re trading. Market analysts make their predictions, and broadcasters report these predictions. There are many people trying to make money from the markets in their own way, whether it is reporting, forecasting, or trading. It’s easy to make trading interpersonal and believe that unless the actions of people involved in the markets are out to help you, they are against you.

But as a trader, you must not look at the market in conventional, interpersonal terms. Don’t think that people’s motives and actions have anything to do with you. It is vital that you forget that you are dealing with people and just focus on the price of the stock and the factors that explain or correlate with it. After all, it was people who sold and may have thwarted your trading plan. But no one is taking specific action against you. Everyone is merely trying to make money from the markets. They are just doing their jobs. Don’t take it personally. It’s just business of trading. Unless you have inside knowledge, or a crystal ball, we don’t really know what is going to happen today, tomorrow, next week or next year. In the end, you must make a decision based on the available information you have and make an educated guess.

Some traders will be wrong, others will be right. What you must do is realize that there is an element of uncertainty in the end, and that when an outcome is uncertain, you are taking a risk. Psychologically, you must accept risk and uncertainty. It’s part of trading. It may be ideal if we could eliminate risk, but we can’t. It’s vital that you take things in stride and view events as somewhat unpredictable, as if you are flipping a coin and betting on the outcome. If you flip it enough times, the odds can work in your favor. But if you are stunned by the outcome, panic, and are afraid to trade, you won’t make much progress. So stay objective, rational, and keep trading. Live by the motto, “Ultimately, it’s impossible to know what will happen, and it’s just business. That is Life.

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