Most that make it as a professional investor and trader have done so after the pain of many losses.

This is followed by the realization — and acceptance — that any profession requires an education,

This would seem to be obvious, but it is not to the majority when it comes to the trading the markets. It didn't to me either.

Why? I believe that it was the allure of the money that clouds our better judgment. And education of the markets is never discussed in school.

Once a method of investing and trading has been taken that comes with a trading plan – and good luck getting past the black hole of the indicator based methodology that permeates the internet and trading software packages – your next hurdle is that you'll find yourself.

A trading plan is a set of rules that you have put together that says, “If this happens, do that.”

If this arrangement of candlesticks form that is aligned with multiple time frames, then buy X number of shares based on these money management rules.

If prices move in the anticipated direction, then take profits based on Y.  Lastly, if this price is violated lower, then exit the position.

I have oversimplified a trading plan but that is the essence of one. The hurdle will be your ability to find the discipline to follow “the plan you made.”

How Much Pain is Enough?

After further loses (pain) you will come to accept that self-controlled discipline is the only way to operate in the markets.

Professional investing and trading is a matter of taking advantage of probabilities and taking the same setups over and over again.

To an extent, it’s like “wash, rinse and repeat” / factory work; but, where it the fun in that?

It is hard to maintain self-control at times.

It is understandable. You are human, and humans have an urge to seek out excitement and drama.

Many people invest in the markets for entertainment. They enjoy putting on a position just to see what happens.

It's similar to playing a slot machine or buying a lottery ticket. The masses enjoy the drama of buying and selling, even if it means losing in the end.

Professional traders are the kind of persons who shun a mundane 9-to-5 job for a more unconventional, adventurous profession.

Rather than avoid uncertainty, they thrive on the endless possibilities.  

What attracts you to trading may also be your downfall, unless you are careful.

Professionals make big profits from the irrational and emotional reactions of the masses.

The masses may want drama, but you want profits. And that means taking a cold, rational, planned approach to investing and trading the markets.

 

Professional Trading, It's a Business

Leave your emotions at the door – as much as you can. You’ll never be unemotional – except that, you’re human, and trade like a pro.

Pros know when to “sit on their hands” and do nothing.

Develop a well-defined trading plan and stick with it. Cultivate a sense of healthy skepticism. Don't believe that all setups are equal.

Only trade the best setups. You may want to jump in and make a trade even though market conditions aren't optimal.

When you get the urge hold back, don't jump in.  Maintain self-control. The more you can fight the urge to seek out thrills and excitement, the more you'll cultivate the mindset of a Professional in the markets.

What you need to decide as an active investor and trader is, “Do you want to be part of the group that gives in to their need for drama and loses money, or the group of active, professional traders who maintain self-control and watch money flow from the masses' trading accounts into their pockets to make a fortune?”

Learn a method of investing and trading that includes money management — and profits will flow into your account

Stock Options provide a low-risk – high reward vehicle to create income.

Happy Thanksgiving! 

  

 

 

 

If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com

All the best,

Greg Capra
Managing Director

Dan Gibby
Chief Options Strategist

Follow Greg on Twitter, YouTube, and StockTwits to get real-time updates and education:

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