Investing in stocks can be a daunting task, and recent developments have not helped stir confidence amongst investors. There are so many negative developments leading one to wonder if investing in stocks is really a good way to preserve capital, let alone earn income.
Case in point is the drastic fall of Macy’s Inc. (M), Carnival Corp (CCL), and ONEOK Inc. (OKE). Did the stocks fall because of fundamentals and news? Or was it because of malicious rumors? Could Mass Crowd Psychology have something to do with it? More importantly, did Mass Crowd Psychology have anything to do with the rapid drop of a counter like Macy’s?
Gaining Control of Your Psychology to Trade
One of the key pillars of Online Guru Trader is Thomas Yin’s trading methodology. This includes Trading Psychology and how to improve it in order to make better trading and investing decisions you can turn into consistent profits. In essence, Trading Psychology is an extremely important pillar of the methodology.
Would you agree most of us buy things because of emotions? Would you also say we tend to use logic to justify those emotions behind the purchase of said products? If you agree with this, then the same theory applies to buying stocks. Our emotions affect our psychology which in turn affect our trading decisions. The trading decisions we make will result in whether we are profitable or not.
The trader requires the right mindset to be disciplined in their trades. This includes sticking to previously established trading plans and knowing when to take profits and cut losses. The trader must not let emotions affect their trading decisions. Emotions simply have no place in a trader’s mind even though they are what drives stock markets.
Fear and Greed
Fear and greed are two of the main emotional motivators of stock markets and business behavior. These emotions have caused many bull and bear markets as well as business cycles.
When fear and greed take over, stock markets can move. Succumbing to these emotions can have a profound and detrimental effect on the traders’ portfolios and the stock market.
Avoiding such sentiments can be difficult and it is largely easier said than done. There is a fine line between controlling your emotions and just being stubborn.
Trading Psychology – A Baptism of Fire
Many traders have tried but failed to have a right mind frame when they invest and trade due to the lack of control over their emotions. Almost every trader will have to go through a baptism of fire before they can actually achieve profitable trades over an extended period of time.
If this is so, isn’t it wiser to seek out traders who have already been through the process of controlling the emotions that come with their trades? Perhaps it is more of a question of who does one want to follow and learn the ropes from.
This is when we turn to veteran trader Thomas Yin who has been trading stocks since 1996 and has spent more than $50,000 learning from other trading experts. Drawing on his experience and lessons learnt over the years, Yin developed a simple trading methodology that encapsulates the Trading Psychology as one of the pillars of his trading success. This Trading Psychology works paired with two other pillars: a systematic approach to market analysis and a solid money-management strategy.
Yin’s began putting his methodology into play in 2009 and he has since been using it, refining it, and showcasing evidence through his trades that it works. Since 2013 Thomas Yin has been teaching aspiring traders how to master these three pillars to become a better trader through Online Guru Trader.
If you are interested in learning more about his experience and his trading history, you can find more information through his 3-Year Trading Challenge.