Emotional Trading

Teach yourself to trade without emotions, rigid expectations, or the need to be 'right', and the key to consistent profits will fall into your lap.

Honestly, discussion and debate are wonderful aspects of the human condition, but most traders need to stop worrying so much about something that they cannot and will not ever be able to know in regards to positions they take being right or wrong. I know how that sounds.

Stuuuuuuupiiiiiiid, right? Wrong.

Nothing could be more beneficial to your trading than realizing this simple fact about the market. ANYTHING CAN HAPPEN AT ANY TIME. How does one define that statement? In terms of probability, is how.

Probability is roughly defined as: "The likelihood that a given event will/will not occur in regards to the number of times a given event takes place." Translated, probability is simply a reflection of how likely one outcome is than another, given the amount of times a situation is allowed to play out. For example, with a coin flip made 10 times, the resulting number of times the coin lands on heads/tales could be very different than if the coin flip was made 100 times. Probability has a random distribution over the short-term, however, when 'EDGE' (that one probability has a slightly higher likelihood of occurring than another) is applied to the equation of probability over the long-term, this distribution of probable outcomes begin to show a certain amount of consistency.

Think about a casino and the game of black jack. Does the casino micro-manage each game, biting their nails at the site of a player who goes on a winning steak? NO WAY! But why?

It is very simple, and if a trader can apply this same methodology and psychological framework to his/her own trading, success will most definitely be the reward over the long term. The reason the casino does not freak out over each 'tick', as many traders do (causing them to get emotional, get shaken out of a trade, or take unnecessary risks)
If you try to predict a coin flip, are you pissed off when you are wrong. NO. Why would you be? Its random, after all.
Wellllll. So is trading, but so many people believe the opposite and continually attempt to find information that supports their point on view. Why? Because your point of view is based in beliefs, which are based in your emotions, which are based in your expectations, which IF NOT met will cause you tremendous emotional pain. But back to the coin flip....
Why wouldn't you be just as pissed if you tried to predict the coin flip? Because your beliefs, emotions, and expectations are not attached to a point of view! And they are not attached because you were taught LONG ago that coin flips are random in occurrence.

If you can control your emotions and fully accept the idea that trading outcome has a random distribution between wins and losses in the short-term, but instead begins to show consistent results over the long-term when applying your edge and taking EVERY trade that is signaled by your edge, the success will far outweigh the failure.