c18 JWBT016-Busby September 30, 2008 15:3 Printer: TBD
174 THE WILD CARDS
the tape, and if the trade is a loser, don’t hold on. Let it go. Accept the loss
and be happy that you have monitored the trade and alleviated the loss.Fear Is Lethal
The flip side of greed is fear. We all fear making mistakes and bad trades.
Losing money is painful. It hurts the bank account and it damages our egos.
Everyone enjoys bragging about winning trades, but we all hate to think
about the losers. Like greed, fear can be a trader’s worst enemy. If not
tamed, it will lead to paralysis. Good trades will come and go without an
entry. While we are doing one final analysis or checking just one more in-
dicator, the opportunity will be lost and so will the chance to make money.
Or if we manage to garner enough courage to click the mouse and execute
a trade, we are too afraid to let the trade work. If there is even a hint of a
problem, we grab the mouse and liquidate the position with a loss. Fear is
a formidable foe.
Do not act with haste when trading. Have a tested strategy. Know how
to properly execute that strategy. Then when the set up is present, have the
courage to click the mouse and take the trade. You cannot make money in
the markets if you are always sitting on the sidelines.
Another problem with fear is that it prevents you from maximizing the
moneymaking opportunity in a trade. Prices always bobble up and down.
Fearful traders get anxious if the market even hints that the trade may be a
loser. One bobble against them and they hit the panic button and liquidate
the position. They either exit with little to no profit or with a loss. Often,
they do not give the trade time to work. Even when all indicators are con-
firming the move, they assume they have been wrong. Fearful traders will
not make money on Wall Street. It takes confidence to make money.Other Toxic Emotions
An emotion that is closely associated with fear is humility. Some traders
just do not have enough faith and confidence in themselves. Even when
the indicators justify a buy, they sit and wait for a perfect set up. If every
index and every indicator is yelling to sell, they question their ability to
analyze and execute the trade correctly. While they are waiting to have the
conviction to trade, the market moves on without them.
Then there are the “perfect” traders. They know it all. They never make
mistakes—at least not any that they acknowledge. Their trading lives are
short-lived because their arrogance takes them out of the game quickly.
Everyone makes mistakes. Even professional traders make a lot of mis-
takes. The difference between the pros and the arrogant amateur is that
the professional knows that he will make errors and is prepared to accept