Saturday, December 24, 2011

Is Emotion important in Trading -Sean Seshadri

At our firm we are big proponents of that a trader must eliminate emotion and fear of their trading regimen. It is very difficult to do and does take time to master. That is why we encourage a trader who just starts to learn how to trade no matter what market one chooses to start with a small position size. A trader must be comfortable what we call your threshold of pain. This means whatever loss parameter you give yourself you should stick to it. For some traders 5 dollars may be all they can risk on a trade an others it may be considerably higher. The other thing is that if a position hits your stop loss you must get out and move on. If the loss is under your pain threshold you will be calm and rational. If not well you know what will be your mindset in your next trade.

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