He Started Screaming…

I was with a friend this morning. Bright and early.

My friend was screaming at his computer. He was losing big money on a trade, over $20,000.

“I can’t believe its going down! They just reported great earnings!,” he exclaimed.

The price moved lower.

“I’m hoping it bounces!”

“Sell it,” I said calmly.

“But it should bounce here!”

“Get out now. Clear your mind. You can always get back in after a minute. But your will have a clear mind. Right now, your mind is blown. You have no objectivity or discipline.” I explained.

He was extremely agitated and kept looking at his screen and yelling. I kept repeating my advice to get out.

I left him screaming at the screen and walked out.

Let me give you the back story. He is a very experienced trader with perhaps 20 years of experience but he doesn’t trade very often. He started again about a month ago.

He consistently made money. He proudly showed me how he was doing it. I told him I was nervous that he was making so much. I was worried about his risk management.

He told me that he just risked a couple of hundred dollars on each trade. He told me got out very quickly if he started to lose money. I felt a lot better after that.

But this morning he revealed that he had lost $40,000 yesterday and was down $20,000 today and had big losing days during the last week. He had made about $80,000 in the previous three weeks but was now net down for the month. That is why he was freaking out.

One problem was that he was trading to make money to support another business. So he was putting a lot of pressure on himself. I think that pressure caused him to take too big a risk.

One of the keys of trading is to keep cool and not put pressure on yourself.

Two ways to do this:

1. Trade smaller size. Cut your positions down to the point that you simply don’t care if you if you have a losing trade.

2. Get your psychology straight. This is the ultimate way to really enjoy your trading and to increase your profits. Click here to learn about my course on the Psychology of Massive Wealth. It is the cheapest course in the world compared to what it will do for your psychology about money.

Check out my online course, The Psychology of Massive Wealth. I address this issue detail.

 Courtney Smith

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