c18 JWBT016-Busby September 30, 2008 15:3 Printer: TBD
172 THE WILD CARDS
day and do not manage their money. They pay the price and are soon out
of the market for good.
Trading is fun. The trading dome resembles a video game and prices
move up and down continuously. Being in a trade is exciting. In addition
to the fun of the game, if the trade works, you will even get paid for having
so much entertainment. Many traders forget that the purpose of trading is
to make money. They begin playing for sport or for amusement. They want
to be in a trade all the time. Consequently, they are soon not trading at all
because they are broke.
The biggest problem with electronic trading is overtrading. It is too
easy to click the mouse and jump into the market. However, if the trade
was not analyzed and planned, it may be a little harder to get out of—at
least with a profit. Day traders often feel compelled to trade all day long.
After all, that is their job. If they look at the computer screen, they must find
a trade somewhere or they are not working. The problem is that far too
many of those trades should never have been taken, and the thoughtless
trader loses his shirt.PEARL 28
Overtrading makes you lose—don’t lose.Many traders do not realize that being out of the market is a position.
When there is no winning opportunity, the “out” position is the wisest one
to make. Never trade unless the odds of success are on your side. Keep your
money in your account and let those who are foolish enough to chase after
losing trades throw their account away. It is far better to miss some trades
than to overtrade. Remember that the market will be there tomorrow. If
you let a few good trades go, it is okay. Look for the right setup during the
next session and be ready to take the trade. Stay disciplined and keep the
odds in your favor. Without discipline, you will not be a good trader. In
fact, without discipline, you will not be a trader at all.The Psychology of Winning
In addition to all of the other variables associated with trading, there is one
more wild card that is so powerful it can torpedo even the best trade: emo-
tion. Few endeavors are more emotionally charged than trading. Money is
precious to most of us, and when we face the possibility that we may lose
it, we experience emotional turmoil that we have never experienced be-
fore. A few of the overpowering feelings with which we must deal are fear,