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TRADING #101 COURSE – PART II TWO: SUCCESSFUL TRADING PIE – WWW.TRADERSCOACH.COM

11. Overthinking the trade or second-guessing your trading. Fear of
loss or being wrong. Perfectionist personality. Wanting a sure thing,
where sure things don’t exist. Not understanding that loss is a part of
trading and the outcome of each trade is unknown. Not accepting there
is risk in trading. Not accepting the unknown.
12. Not trading the correct trade size. Dreaming the trade will be only
profitable. Not fully recognizing the risk and not understanding the
importance of money management. Refusing to take responsibility for
managing your risk. Too lazy to calculate proper trade size.
13. Trading too much. Need to conquer the market. Greed. Trying to get
even with the market for a previous loss. The excitement of trading
(similar to item 7, compulsive trading).
14. Afraid to trade. No trading system in place. Not comfortable with risk
and the unknown. Fear of total loss. Fear of ridicule. Need for control.
No confidence in your trading system or yourself.
15. Irritable after the trading day. Emotional roller coaster due to anger,
fear, and greed. Putting too much attention on trading results and not
enough on the process and learning the skill of trading. Focusing on
the money too much. Unrealistic trading expectations.

Confrontation is generally uncomfortable and requires a certain amount of courage and
determination. But it is needed sooner rather than later when dealing with psychological
issues. Confront your issues head on, and you will see improvement in your profitability
as soon as you resolve the conflict.

Optical Illusions Show How Our Minds Can

Mislead Us

There is perception and reality, and then there is reality and perception. It is sometimes
hard to determine which is which.

Look at Figures12.1, 12.2, and 12.3. They illustrate how our minds can play tricks on
us and how the brain does not always visually process information in a way that allows
us to see reality. Instead, what we are seeing is the perception or the illusion.

These optical illusions occur because of the way the neurons in our brain interact. What
this tells us is that the way our minds perceive stimuli both visually and intellectually is
not always reality. We must be conscious of this fact to guard against misinterpreting
market information and losing money by reacting to an illusion as opposed to seeing
and understanding the market reality for what it is.

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