Wednesday, August 17, 2005

Temptations (2)

So how do you prevent yourself from being tempted to buy?

Well, the standard way is to plan your trading before the open of the market! Yes, you should write down at what price to buy, targeted price and stopped price before you enter any trade. This will prevent you from following your "feeling". Emotions are bad in trading. When price goes up, you feel "high". When price goes down, you feel "down". We must cut away these type of feelings from our trading. More like cold blooded trading. No emotions, no feelings. Just follow the rules that you have set. Nothing more, nothing else.

So what are the rules? It depends on your personality. If you are old, most probably you will like the fundamental counters that moves up inch by inch. If you are young, most likely you will play those speculative counters. If you are a daredevil, then you will use the buy high, sell higher strategy. We are humans, each of us are different. So find out what type of trader are you. Then apply the right technique that suits you.

Just remember, write down everything you do. Keep a journal of it. At least we can analyse our successes and failures later on. It's okay to make a mistake once. But it is lunatic to keep repeating it.

For me, I'm still searching the right technique that suits me.

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