What is holding you back?

Discussion in 'Trading' started by bdixon619, Feb 29, 2004.

  1. In a good book "Risk-Reward", the author Howard Abell distinguishes between the traits of gamblers and calculated risk-takers.

    "More than ever you need to understand the difference between a gamble, which has a high probability of loss, and a calculated risk, which has a much higher probability of a positive outcome. Here are the traits and tendencies of gamblers from calculated risk takers. The following lists contrast the two groups.

    The gambler

    Motivation derived form desire for excitement and danger
    Crowd driven
    Highly emotional
    Blames others or luck for bad outcomes
    Lingers over losing choices and wins not taken
    Is influenced by unacknowledged fantasies to what is possible
    Will risk more than can afford to lose
    Acts on impulsive decisions
    Is unaware of unconscious motivation
    Acts out of sense of superiority or "magical thinking"
    Gets high and feels powerful on a win, gets low and feels worthless and small on a loss
    Infuses ego into risk choices
    Lacks discipline and invests on wishful fantasy rather than recognizing reality
    Hides losses and is secretive about taking chances
    Procrastinates (building up excitement levels)
    Follows a favorite method no longer useful or relevant
    When losing will take increasingly bigger risks to catch up
    Looks for the one big win or score that will result in bliss

    The calculated risk taker

    Contains and manages emotion
    Is aware of irrational factors swaying a crowd
    Takes responsibly for results
    Does not waste time with what might have been
    Acknowledges personal fantasies and resolves or disregards them
    Risks a tiny fraction of equity on any individual choice
    Concentrates on a realistic long-term strategy
    Knows personal abilities and limitations
    Is hardworking and open to new ideas
    Stays emotionally even during wins and losses
    Easily resists risk that do not fit within defined risk limitations
    Is open about risk taking
    Proceeds in a serious, conscious manner
    Stays alert to present trends
    Follows predetermined guidelines of safety
    Analyzes situation, observes own reactions, and makes realistic plans

    The following list represents the market behaviors that prevent most traders from achieving the results they desire in the marketplace. How many of these 10 are you struggling to overcome?

    Not defining a loss
    Getting locked into a belief or magical thinking
    Losing control of a trade or opportunity
    Emotional trading or investing
    Hesitating or procrastinating about a market opportunity
    Loss of focus
    Being more invested in being right than in having a successful outcome
    Not consistently applying your trading system
    Not having a well-defined money management system
    Not being in the right state of mind"

  2. This is good. I am the latter.
  3. Bolts


    Ah, my usual reason for visiting ET! :D
  4. 11) Dumber than the competition?
  5. Bet if we were unionized you'd show.
  6. prox


    oh crap, all 10 apply to me..
  7. Arnie


    At different times, all have been a problem. And it only takes one to f$$K your day up.:D