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Developing Emotion Free Trading DisciplineEmotions can hinder successful spread betting Contrary to what most novice traders believe, success in trading or financial spread betting is not down to your understanding of winning strategies, trading systems or even money management techniques. Of course, all these enhance your chances. However, most successful traders agree on one basic premise. The single most important element of successful trading or spread betting is the mental or emotional aspect. Unfortunately, this element is usually the last to crop up in the mind of the novice trader or spread better and as such it is usually the last to receive any attention. If there is anything that I hope to pass on to you on the pages of www.spreadbettrader.co.uk, it is this: true mastery of financial spread betting will only come once you have mastered your emotions and mental response to the markets. Notice that I wrote “emotional response”. This is because no single trader or spread better has any control over the markets. The only control we have is over ourselves and our decisions. As we conduct our analysis, the best that we can hope for is that we interpret correctly what the data is saying. As professional traders say, the market has a mind of its own and it will do what it wants. While our analysis may turn out to be correct or wrong, the real determinant of whether or not we end up winners or losers is our emotional or mental reaction to the result of our position in the market. Consider for instance that unlike with most other activities, in trading (as in financial spread betting) there is really no starting or ending point. The wheel is in constant motion and you decide when to get on and when to get off again. Either way, the party goes on. This presents a number of challenges for novice traders and the professionals alike. • Even after conducting analysis, where does the novice spread better find the initial confidence to pull the trigger especially when faced with all sorts of contradictory emotions? • Good times may be easy to deal with but, how do you deal with the emotional drain of down times without digging yourself deeper into the loser’s hole? • If you find yourself in a bad trade, how do you work your way back out? Quite often, the best option is to cut your loses and get out of the trade asap. But try telling the novice spread better that a small loss may well be the best way to learn an important trading lesson. Bottom line is that this is emotionally difficult to accept. • How do experienced traders push through the ceiling of profitability that caps their initial trading years and make a truly fabulous living? Trading and financial spread betting are performance-oriented activities. Stress and mental pressures can inhibit your ability to function effectively with potentially nasty implications for your bottom line. Here are a number of important points to note as you develop a winning mental attitude to financial spread betting: • Intellect (at least in the academic sense) has nothing to do with your ability as a spread better. Success is not a function of how smart you are or how high your IQ is. This is hard to accept for most people.
• No matter how long you have been spread betting, there is no customer or client goodwill built up each day in your business. Each day is a clean slate. Try and maintain a sharp focus during the trading day. Just as importantly, make sure you take time out of the market every now and again to recharge your batteries. The market can be mentally draining - even for the most experienced players. • Success in financial spread betting is not a factor of how much effort you put in. Simply put, the traditionally 9-5 work ethic doesn't apply in this business! A trader could sit in front of a screen all day waiting for a trading opportunity and have nothing happen. Patience is crucial. There is a temptation to take marginal trades just so you feel like you are doing something. Do not fall into this trap. Spread bet only when there is a clear money making opportunity. This is just a start. On this site, You will find many other useful articles focusing on the emotional and mental elements of trading to help you along the way. Assimilating these key points will help in your quest for the mastery of financial spread betting.
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