Trading Errors and Fears

1st InvesTrade Advanced Traders’ Conference

Himaanshu Kansal

29-Nov-2014

Contents

Introduction Common Errors Misplaced Beliefs Dreadful Fears Trading Niche Traits of Successful Traders

Introduction

Parallel between game of Cricket and Trading

Common Errors Over-trading Not taking a loss Adding to a losing position Relating next trade with the

previous one

Misplaced Beliefs A good day is a winning day Working hard means trading more Success is making a living from

Trading Next trade will be a blockbuster

Dreadful Fears Fear of loss• Keeps one away from taking the next

trade• Does not let one cut the losses

Fear of Profits • Forces one to exit a winning trade too

soon

Fear of missing out• Leads to overtrading in terms of:

Size Frequency

Trading Niche Components • Specific Market and / or Asset

classes• A core strategy• Time frame• Decision Making

Traits of Successful Traders

Mental • Believe in effort / are courageous• Discipline• Ask right questions• Give appropriate responses• Think in terms of probabilities• Able to extract information from

their emotions• Patience

Traits of Successful Traders

Others • Come strategically prepared

Trading plan Entry / Exit Rules Money Management / Position Sizing

• Keep excellent record of each trade Treat each Trade as feedback Write Trading & Psychological Journal Emphasize on self-coaching

• Understand personal psychology as well as market psychology

• Value their Capital / Skills / Methods

Bibliography

12 Habitudes of Highly Successful Traders by Ruth Barrons Roosevelt

The 28 Essential Lessons That Every Trader Must Master by Jason Alan Jankovsky

The Daily Trading Coach by Brett N. Steenbarger