Emotions: A Trader's Worst Enemy; Get Rid of Fear and Greed - You'll be Glad You Did
by: Jonathan van Clute
Copyright 2005 Jonathan van Clute
You hear it over and over and over in books, forums, and chatrooms. Fear and greed, fear and greed, fear and greed. Emotions are a trader’s worst enemy. What are we supposed to do about it? We are human after all. Human beings have emotions. We can’t just throw a switch and suddenly behave like “Data” on Star Trek the Next Generation.
So what’s the answer for the aspiring trader?
It all boils down to 2 main components:
1. Having a plan
2. Having an appropriate trading style
You hear the first point often. Obnoxious little phrases like “Plan your trade, Trade your plan” are thrown around like it was really just that simple. But without the second part, the first part is useless. What good is a plan if you don’t know what type of plan is appropriate?
For example, you could plan your commute to work expecting to make the 30 mile trip in 20 minutes, but if you’re on foot that plan isn’t going to work very well is it? The plan was simply not appropriate for you in that situation.
There are an unlimited number of possible trading methods and styles, from chart reading to fundamental analysis, cycles to Fibonacci retracements, intra-day, Dogs of the DOW, Options, Futures, FOREX, Pork Bellies, Arbitrage – it can make you feel like your head will explode! But what you trade does not matter nearly as much as how, or perhaps why you trade.
Why do you trade?
Are you the sort who likes to play video games, loves fast action, and has no problem being glued to a screen all day? Then maybe intra-day trading 1 and 5 minute charts of high volatility equity options is for you.
Rather check your trades maybe every few days, or maybe once a week? Then perhaps swing trading currency pairs is more your style.
Prefer sleeping easy at all times, never worrying in the least about your trades because you knew up front that they would profit? Then my friend, arbitrage trading is calling your name.
Every style has its advantages and disadvantages, its risks and rewards, but most important is that the style must match the trader. If you jump into trading believing that just because someone else can do it this way, then so can you – you may be in for a very painful surprise.
Never trade someone else’s plan. Never trade someone else’s style. You absolutely must know your own temperament well enough to determine what you will trade, and exactly how you will trade it. Your money management rules, your tolerance for losses, i.e. costs, , your willingness to change the trade if your market opinion is proven wrong – these are the true secrets to trading that separate the novice from the veteran. With these in place, emotions can be reduced if not eliminated.
After all, which would put you most at ease? Driving through an unfamiliar city alone with no guidance, driving with a map, or driving with a full color street-level-detail GPS navigation system?
I’ll take the GPS, thank you.
So before you place your first, or next, trade, consider the following:
a. Do you understand what you are trading and why?
b. Do you know what you will do given any of the possible outcomes?
c. Are you ready and willing to admit you were wrong about the trade, and if so what will you do about it and when?
d. Are you comfortable with the thought of losing the money you are putting into the trade, and will your trading account survive to trade another day if you do?
These are all part of what you need to have in your plan. I urge you to have considered them thoroughly before risking the slightest amount of money in a real trade.
Emotions – “You can’t trade with ‘em, and you must trade without ‘em.”
About the author:
Jonathan van Clute is a full time investor, educator, speaker, and online options and sports arbitrage trader. In addition to his business activities, he is also a musician, video editor/animator, and one of the world's greatest Segway Polo athletes. He can be reached via email at jonathan@PMLinvestments.com and is speaking at an upcoming teleseminar, visit http://www.snurl.com/vcbiofor details.
Saturday, April 19, 2008
Thursday, April 10, 2008
Identity theft: Safeguarding Can't Hurt
Identity theft: Safeguarding Can't Hurt
by: Daryl Campbell
Will we ever get a break? Not right now .In San Diego, police arrested a postal worker for stealing mail and trading it to identity thieves to support his drug habit.
Another arrest involved the hacking of wireless carrier T-MobileUSA's network. According to Fox News, the attacker gained access to a database of 16 million customers including the personel information of the Secret Service agent investigating the break in.
Then there's Choicepoint. When last we left the information giant, criminals broke into their 19 billion records database. Choicepoint now acknowledges previous attacks that date back to the year 2000.
The number of identity theft victims as well as the methods of getting personal information continue to increase sharply. Yet while no 100% guarantees exist online or off, safeguarding can't hurt and one of the best ways for fighting identity theft exist in your own home.
Check your trash.
Going thru your garbage has turned into an exact science and a major goldmine for the identity thieves. The Department of Justice refers to this as "dumpster diving" Check everything you throw away then check it again.
Mark any information including financial statements, driver's license, address and especially your social security # "Sensitive" then shred it. I recommend a crosscut shredder. Throw it away in different garbage cans on different days.
Shred junk mail credit card offers and get taken off the major credit agencies' marketing lists.
If you're not doing it already, get into the habit of taking your mail particulary any bill payments directly to the Post Office. Identity thieves also target mailboxes. They frequently stake out the area and wait for the optimum time. Getting a locked mailbox doesn't hurt either.
Use anti spyware, a firewall and antivirus programs on your computer system. If performing a transaction online make sure the company provides a secure server. They should tell you but if not look for the yellow lock at the bottom of your screen.
Guard your plastic. Examine your credit card statements and request a copy of your credit report. Agencies will send you one free copy per year. If you request more than one, you get charged a fee anywhere from 9 to 20 dollars depending on the credit bureau.
Handle this with care. Eventhough you're doing the right thing in trying to protect yourself, too many inquiries are frowned upon by these agencies and could impact your credit negatively. Joining a credit monitoring company can remove that obstacle.
One caveat.You should exercise vigilance in protecting your credit cards but it's not the total solution that some experts claim. The Federal Trade Commission estimates that 60% of all identity theft cases do NOT involve any existing accounts. Guard your plastic but make guarding your Social security number the top priority.
These methods of protection take on a special significance
due to the identity of the criminals. According to the Better Business Bureau's 2005 Fraud Survey Report, family freinds and neighbors account for half of all identity thieves. You don't want to turn someone you know and love over to the authorities so do your best to eliminate the temptation.
Again, no 100% guarantees exists. You make transactions at the restaurant, corner store, gas station and a host of other places. We all need to deal in this world so there's always a risk factor. Stay vigilant on the things you control and the chances of identity theft can decrease.
Because at all costs you want to avoid what many victims rank as the worst part of identity theft. The nightmare of recovery.
About the author:
Daryl Campbell is a writer and home business owner.Banks say you should check your credit once a year. No problem right? Except it leaves identity thieves the other 364 days to steal it. Get the professionals on your side to watch your back 24/7. How? Go now to => http://digbig.com/4dwsx
by: Daryl Campbell
Will we ever get a break? Not right now .In San Diego, police arrested a postal worker for stealing mail and trading it to identity thieves to support his drug habit.
Another arrest involved the hacking of wireless carrier T-MobileUSA's network. According to Fox News, the attacker gained access to a database of 16 million customers including the personel information of the Secret Service agent investigating the break in.
Then there's Choicepoint. When last we left the information giant, criminals broke into their 19 billion records database. Choicepoint now acknowledges previous attacks that date back to the year 2000.
The number of identity theft victims as well as the methods of getting personal information continue to increase sharply. Yet while no 100% guarantees exist online or off, safeguarding can't hurt and one of the best ways for fighting identity theft exist in your own home.
Check your trash.
Going thru your garbage has turned into an exact science and a major goldmine for the identity thieves. The Department of Justice refers to this as "dumpster diving" Check everything you throw away then check it again.
Mark any information including financial statements, driver's license, address and especially your social security # "Sensitive" then shred it. I recommend a crosscut shredder. Throw it away in different garbage cans on different days.
Shred junk mail credit card offers and get taken off the major credit agencies' marketing lists.
If you're not doing it already, get into the habit of taking your mail particulary any bill payments directly to the Post Office. Identity thieves also target mailboxes. They frequently stake out the area and wait for the optimum time. Getting a locked mailbox doesn't hurt either.
Use anti spyware, a firewall and antivirus programs on your computer system. If performing a transaction online make sure the company provides a secure server. They should tell you but if not look for the yellow lock at the bottom of your screen.
Guard your plastic. Examine your credit card statements and request a copy of your credit report. Agencies will send you one free copy per year. If you request more than one, you get charged a fee anywhere from 9 to 20 dollars depending on the credit bureau.
Handle this with care. Eventhough you're doing the right thing in trying to protect yourself, too many inquiries are frowned upon by these agencies and could impact your credit negatively. Joining a credit monitoring company can remove that obstacle.
One caveat.You should exercise vigilance in protecting your credit cards but it's not the total solution that some experts claim. The Federal Trade Commission estimates that 60% of all identity theft cases do NOT involve any existing accounts. Guard your plastic but make guarding your Social security number the top priority.
These methods of protection take on a special significance
due to the identity of the criminals. According to the Better Business Bureau's 2005 Fraud Survey Report, family freinds and neighbors account for half of all identity thieves. You don't want to turn someone you know and love over to the authorities so do your best to eliminate the temptation.
Again, no 100% guarantees exists. You make transactions at the restaurant, corner store, gas station and a host of other places. We all need to deal in this world so there's always a risk factor. Stay vigilant on the things you control and the chances of identity theft can decrease.
Because at all costs you want to avoid what many victims rank as the worst part of identity theft. The nightmare of recovery.
About the author:
Daryl Campbell is a writer and home business owner.Banks say you should check your credit once a year. No problem right? Except it leaves identity thieves the other 364 days to steal it. Get the professionals on your side to watch your back 24/7. How? Go now to => http://digbig.com/4dwsx
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