Afraid of Pulling the Trigger?

"You miss 100% of the shots you don't take." - Wayne Gretzki

In poker lingual.... you can't win what you don't put in the pot. You can be the tightest player in the world. You won't lose any money. But you definitely won't make any money.

Our minds automatically avoid pain for pleasure. This is how our brain is programmed. New traders who have the trouble of pulling the trigger associate a trade with a potential loss that can cause financial or emotional pain.

Do you imagine taking the trade and never pulling the trigger? Are you right on your analysis but are unable to execute just to watch the markets runaway from you? The biggest conflict that is causing this is your belief in pain.

This may be caused by your pain for loss or your need to be right. The need to be right is associated with the need to be perfect every time. If you are a perfectionist there is a conflicting belief that you must eliminate to trade successfully. Perfectionists believe that there is a "correct way" and a "wrong way". Taking a loss is considered the wrong way to them. Trading is a game of probability. And it is not about being wrong or right. It is about making money.

You must get used to dealing with uncertainty. There is no exact science in trading and nothing can be predicted in advance. However, with enough experience in the markets you will be able to smell market weakness from market strength.

For those who are having trouble taking losses, you are overweighing the loss. If you know your risk parameters there should be no problem taking a trade. Perhaps you are not confident in your own trading methodologies. Have you tested your setups? If you have a strategy that is 70% profitable, take the trade. Once again trading is a game of probabilities. If you have a proven setup with strict money management, you will be profitable. Have faith in your methods.

For some people they are unaware that the markets they are trading does not fit their personality. If you like a slow market you should stay away from the S&P. Trade corn instead. Know your personality and find the market that suits you. This is one mistake alot of traders make. Thus, trading is not only about understanding the markets. It requires self-understanding as well.