Face Reality When Trading the Financial Markets

By Paul Ebeling Face Reality When Trading the Financial Markets  You may have seen the articles about how trading the financial markets is a very hard to succeed in. How every day, hundreds of fledgling traders try their hand at the stock market for the 1st time, and in a couple of weeks they recede with their tails between their legs.

It is common that new traders see this content and think to themselves “Hey, I know what to do now. I can succeed where they have failed.”

This is a good mentality to have in the long run, as facing adversity can drive you to do better and exceed your own expectations.

However, there is a reality to face.

Even if you read all the trading book adnblogs in the world, there are Key reasons why people end up failing.

The Big Q: What are The Reasons?

One fatal flaw that most traders fall victim to is perceiving the stock market as a standalone entity. They look at it as game of Me Vs. It, That the financial markets are things to be conquered.

The market is actually something much bigger and allegorical than that.

The stock market is affected by the action of others around the world. It is operating on the actions that all make, and traders affect it in a grander way than most.

When looking at the stock market, it is a look at a litmus test for the culture of finance and social moods of society. In this same vein, the market is largely movable because of thousands of traders making similar decisions, thus creating a pattern. This speaks to how the market is more so a collective than it is a commodity item.

So, it is imperative to consider this carefully: the stock market can only operate when someone is losing money.

When everyone who plays the game of trading makes money, there’s no one on the losing end of things. In stock trading, there has to be a gain and there has to be a loss, there is a Winner and a Loser on the side of each trade.

If you want to try out stock trading then this all may sound disheartening, what is the point in trying if there’s a 90% chance that you will fail?

Stock trading success depends on Optimism.

While the odds are stacked against you, you will fail for sure if you do not try. As trying at least gives you that 10% chance of making a profit.

The simplest solution is to stay realistic but hopeful, and not pessimistic.

When you know going in that there is a very large learning curve and the possibility to fail, you do not give yourself too high of expectations. This, then, is a integral part of trading psychology.

Psychology has a lot to do with the success of stock trading, whether in terms of market projections or individual mentality.

One demographic of traders that fail are those who were not mentally prepared for trading, and this can apply to the pressure required of trading stocks or the failures they go through that ultimately push them out of the market altogether.

Psychology and trading are also impacted by concepts like culture and sociology.

There is an ebb and flow to the stock market, and it is usually dictated by social circumstances. This can include a grand scale social incident, like a newly diffused war that helps to reignite a country’s economy, or more simply social ideas, like trader mentality and crowd-think concepts.

Remember, there are some obvious mistakes that many fledgling traders make that cause them failure.

Understand that trading is not a Game of being psychic or perfect. It is a game of experience, patience and paying attention.

Below is a list of some Key reasons people fail as new traders, as follows:
  1. You do not consider practice Vs. the real thing: One method of trading practice is to use a trading simulator, and this is definitely not a bad idea. Trading simulators help you get acclimated to the intricacies of trading, but they don’t prepare you for the psychological aspects. When you’re playing around with fake money, losing big might make you feel bad because of the implication you failed at trading, but it does not compare to the emotional turmoil of losing all of your real cash.
  2. You focus too heavily on finding the perfect strategy: There is no perfection in stock trading, ask seasoned traders and they will tell you that even they fail at times using tried and true strategies they craft after years of experience. New traders tend to always push for that “Holy Grail” trading strategy. It’s important to continuously look for ways to improve the strategies you have in place, but trying and failing to find the perfect strategy is a waste of time.
  3. You deviate from the strategy at hand: Instead of flip-flopping on the strategy you already have in place, follow it through. If it fails, you know it won’t work the next time and can adjust it accordingly. Apply scientific method-like analysis to your trading strategies. Develop hypotheses, and then see how your experiment pans out. When you do not stick to your plan, your methodology can’t be analyzed as well as it could have been otherwise.
  4. You react to the market on a whim: Good traders establish a decent risk-to-reward ratio. When you do not have a plan in place, or you do not stick to the plan you already prepared, you risk simply going off of the market itself. Sometimes this can do you some favors, but realize that any earnings you make based on a half-cocked strategy will be pure luck. Only reacting to the market and not creating a plan can negatively affect your win/loss ratio in a big way.
  5. You trade too much: Many new traders assume that the more they trade, the bigger their chances of success are. This is false. You should be trading because you have found a good opportunity to trade, not just because you feel like you need to trade for a daily quota.
Failure does not have to be inevitable in the world of trading. If you put in the effort it takes to succeed and commit to practicing good trading habits, you will likely prevail. Source: http://www.livetradingnews.com/
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Second Presidential Debate: Clinton, Trump spar over lewd comments, emails

St. Louis (US): Republican Donald Trump and his Democratic rival Hillary Clinton sparred over a number of issues including the billionaire’s lewd comments about women and the former State Department Secretary’s deleted emails, in the second presidential debate here on Sunday night. The two presidential nominees accused each other with Clinton saying Trump was “not fit to be the President”, while the billionaire taking on her over the whole birther claim against President Barack Obama, saying: “You owe Obama an apology.” Beginning the debate, CNN’s Anderson Cooper asked about the 2005 video in which Trump made lewd comments about women, saying: “You bragged that you sexually assaulted women — do you understand that?” Responding to Cooper, Trump said: “No that’s not what I said. This was locker room talk… I am not proud of it but this is locker room talk.” He then pivoted to terrorism and “bad things happening” in the world. Taking on Trump over the issue of lewd comments, Clinton said: “I’ve spent a lot of time thinking over the last 48 hours about what we heard and saw.” Clinton said though she had differences on policies and principles with the Republican candidates in the past but for Trump, she said: “…he was not fit to be president and commander in chief.” “I think it’s clear to anyone who heard it (video) that it represents exactly who he is. We’ve seen him rate women on their appearance, ranking them from one to 10… it’s not only women, it’s not only this video… This is who Donald Trump is,” she added. Trump then accused former President and the Democrat’s husband Bill Clinton of doing much worse than talking about sexual assault. Clinton quoted US first lady Michelle Obama saying: “When they go low, we go high.” Trump then targeted Clinton on the email issue and said: “If I win, I am going to instruct my attorney general to get a special prosecutor to look into your (email) situation… you ought to be ashamed of yourself,” he said. Clinton responded: “Everything he just said is absolutely false and I am not surprised.” There was also a moment in the debate when Trump insisted Clinton to answer the question about healthcare first, after nearly jumping in to answer despite it not being his turn. “Go ahead, I’m a gentleman,” he quipped. Clinton called reining in the cost of the Affordable Care Act the highest priority of the next
president. She “agrees” that premiums have gotten too high. Clinton added she wants to save what works with Obamacare but warned repealing it wholesale would lose all those benefits that came with the new healthcare system.  “Obamacare will never work. It’s very bad health insurance,” Trump said, insisting that it is too expensive. Trump claimed Clinton “acid washed” 33,000 personal emails to delete them, something he said was an “expensive process”. When asked by a woman in crowd about Muslims in the US being targeted and facing hate crime, Trump said: “Muslims have to report it when they see hate going on. Muslims have to report the problems when they see them.” Trump also spoke about the parents of the dead and the Gold Star Iraq war soldier. “Captain Khan is an American hero… if I were president at the time he’d be alive today,” he said. “I would not have had our people in Iraq, Iraq was a disaster.” On his proposed Muslim ban, Trump said: “This is the greatest Trojan horse of our time. I don’t want to have hundreds of thousands of people coming in from Syria when we know nothing about their values, nothing about their love for our country. Source: ummid.com
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