Your Perfect Emotional Setup Explained Part --4

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·       Work on your vices.

Not only for markets, but in any field of life or profession; if
you work on your vices you will surely be benefited. But talking about the markets in particular working upon your vices will clear all hindrances in your path of emerging as a successful trader. What are the three vices? Yes you got it right Ego, Thrive for perfection and Overconfidence. Click here if you haven’t read the article on these vices. It is very important for every on to recognize shortcomings with us and believe me we all have many of them. Then working day and night to overcome the iniquity ( in relation to markets) should form an important part of our curriculum. It is similar to self introspection which should be carried out at individual level.

·       Do not gamble.

There is a thin line of difference between investing and gambling. But this thin line can make a huge difference for your trading capital. Investing is rightly defined as the engine that drives capitalism. Investing is the tool that transfers money from gamblers to the people who offer promising and productive use of it. But gambling, it is a damn bad thing. In the words of Peter Lynch “Investment is simply a gamble in which you have managed to tilt the odds in your favour." Here he explicitly highlights the side effects of gambling wiz high chances of losses an absolutely unproductive environment for the economy. Regard gambling as immoral, this will keep you away from it. 

·       Never enter a trade unless your setup allows you to.

Entering a trade against your setup is very much linked to addictive trading. It clearly depicts your thirst for trading. You buy or sell before your trading system allows you to do so and in the process markets slay you and your capital badly. Markets never tolerate any in disciplined behaviour and punishes such people who act unethically. Trading against your system is one of the worst trading behaviour. Take all trades based on your system and get out of trades when your system points that out. For the markets DISCIPLINE scores a perfect 100.

·       Have a predefined plan; that also a clear plan.

This is completely in line with the above point. The trading system we just discussed above was related to the clear plan. A plan based on technical knowhow and emotional setup is must. Along with it the plan should be crystal clear, there should n’t be any ambiguity related to it. But what is most important is strict adherence to the plan. This is the way to beat the markets with discipline....!

Part 5 – coming soon!!