I've been studying the psychological aspect of trading, and how your mental state affects your trading decisions. And one thing I've been thinking about is how having a steady supply of money flow can affect your judgement when making trades. I'm running a small business, that I can't seem to let go of and pursue my dream of being a successful trader. That consistant supply of money makes me feel comfortable. And since I'm trading with the comfortable feeling of knowing the steady supply of money is always going to be there, I feel more relaxed when I trade. That means that when a stock goes down after I enter, I get this calm, "Ok lets look at the bigger charts before we cut our losses" attitude. I feel that if I didn't have a business, my attitude towards a declining trade would be "Lets cut our losses!! NOW DAMMIT!!!! attitude. But then again if I wasn't working I would spend more time trading and have more experience at having a better attitude. I don't see how having a paper trading account can help with psychology either. Because knowing that all your money is fake doesn't help your state of mind. Instead I think I would treat it more like a gambling video game. The big question is, should I cut back on my business to start trading better? Or do you think I'm doing right by sticking with my job and having a more comfortable attitude that will only get better as time goes on? I have already decided that I'm in it for the long haul, but I want to at least have a nice gradual transition before I get there...
Feeling secure about losing monies isn't it either! Your attitude should be to protect your monies first! Risk management should be job number 1. A lot of retail traders get into trading with the dream in their heads of making millions. Not totally, blaming them as salesmen promoting seminars and training to enable you to make millions in the stockmarket is a dime a dozen! No talk about risk management or avoiding blowing up your account! Look at Optionsellers.com. They had control of over $200 million and lost it all. Timothy Sykes had a $10 million hedge fund and lost a good chunk of it as well. Anyone not having risk management in their trading system will only need more monies. That is the reality of it! Never risk more than 2% on each trade. Some recommend for newer traders to keep it at 1% of your total capital.
HAVING to make $$$'s means you / I do take trades I shouldn't / wouldn't normally, especially on a slow day where you've sat there for 3hrs and just got bored, missed a few little 1's then get gambly as you need to make the $$$$'s. I wanted to close mine end of March small business, but so far this month I've traded for 1/2 a day and made +$360, working tomorrow and tired so low odds on friday. Got to cut the cord, can't trade and work just gets too damn tiring.
Invest at the same time as running a business. Worked for this guy. https://www.forbes.com/sites/maddie...st-who-beat-the-odds-to-become-a-billionaire/
short term trading is a waste of time.... look at these charts... trends are running for years for 100's of % return... why work so hard for pennies. enjoy your job/business, throw the proceeds into the trend... it is that easy. with 10 year at 2.6% and SP500 forward earning yielding 6%, we are going MUCH HIGHER. if you want to spice it up, no problem, work on sentiment - VIX, AAII sentiment etc, just buy more when the sheep panic.
The most helpful thing that I can recommend after more than 20 years of trading is this: If your working, you can't be watching your trades and you don't want to have orders out there in the marketplace unattended,so get an Interactive Brokers (IB) account and use the semi-automation on their free Trader Work Station (TWS). Example: 1: Determine the evening before trade day what you want to trade and also determine: (A) a reasonable buy price (Buy Limit) (B) a reasonable sell price (Sell Limit) (C) a reasonable stop price (Stop) 2: In the morning before the market opens, (A) click "Bracket Order" on your IB TWS and (B) manually fill in the Buy Limit, Sell Limit, & Stop (1A, 1B, 1C above) on the Bracket Order. (C) Transmit the order. You can now go about your work day and everything is automatically taken care of for you. Helpful tips: If want the Bracket orders to be good for only 1 day, make each order says Day Order. If want the Bracket orders to be good for more than 1 day, make each order says GTC (Good til Cancelled). Sometimes its prudent to wait for the market to open before transmitting the Bracket Order. Why? If your trade vehicle opens well below the Buy Limit in your Bracket order, you will need to adjust the Sell Limit and Stop prices in the Bracket order to match your new lower Buy Limit.
This is exactly what I'm talking about. I think the feeling of being forced to trade is a lot more prevalent when you don't have a job. And that kind of attitude can get you nowhere... Protecting my money is important, but I feel less edgy when a trend doesn't go as planned and a lot of times that has helped me out because instead of panic selling I am able to sell at a better price because I'm not edgy. When I have time I day trade, but if I feel like a trade has a high probability of continual gains, I'll set my stop loss and go about my day away from the computer as a swing trade. Which swing trading has been working better for my schedule. That is a really good idea. Maybe I should learn how to trade stocks
If you have too much money , you can simply act such as more is spoken-for, and less is 'disposable.' You can do that by spending more -- OR, you can go the Cheap Bastard[!] route, and put more away in your 401k,529,IRA,Roth etc etc, so that what actually makes it to your wallet is sufficiently less to make you appreciate it more. If you're looking to develop sound trading that will carry you into full-time reliance, don't make a single trade from here on out, without it being part of a plan, with entry rules, and exit rules, and zero exceptions. THEN you will pause some, before clicking the terrible click. Indeed.
I know the standard answers, like let your profits run, but what should be profit goal when risking 2% of your account?