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How to Build Confidence If Yours Has Been Shaken

Today we've asked Brian McAboy from Inside Out Trading to help you build up your confidence as a trader. For over 6 years, Brian McAboy has been helping traders become successful and self-sufficient, providing training, coaching and resources that tap on his expertise as a "Success Engineer" from his Quality Assurance days.  His experience as a trader, Trading Coach, Business-Consultant and Certified Quality Engineer give you the practical edge to become a great trader and enjoy what trading offers.

Has your confidence been shaken in your trading?  If you’re like most traders, your confidence has been beaten down by the markets – or so it would appear.  In reality, the problem goes beyond those losing trades that are easy to blame for the current state of affairs.  In this article, we’ll take a look at the real reasons why you’re not feeling nearly as confident as you’d like, a fatal assumption that keeps you stuck in that lousy  rut, and the simple steps you can take immediately to build your confidence – the right way so that it lasts. [Read more...]

Traders Toolbox: Forward to Gann theory

To TRULY be a success at almost any profession takes commitment — the type of commitment which comes from the heart, not the mind. Most successful people I know have a dedication towards their chosen path which was forged through hunger. Hunger for knowledge, hunger for power, hunger for wealth, and, in many instances, the hunger associated with survival. It's hard to be "rich" if you haven't been "poor"; "happy" if you haven't been "sad"; or "satisfied" if you haven't been "hungry".

I believe Gann's biggest secret consisted of hard work and common sense. Hard work follows a true commitment and a desire to learn. Common sense is sharpened by the process of learning from experience. In my opinion, THERE IS NO SUBSTITUTE FOR HARD WORK AND AN OPEN MIND.

In trading commodities, a critically important early step towards success is learning about yourself and how you function. You can learn about yourself quickly in the marketplace. By far, the weakest tool in a trader's arsenal is the TRADER. In this business, it is so very true that you are your own worst enemy. It is critical to understand yourself and to bring your emotions under control.

Emotions are tamed by confidence. Confidence is gained by knowledge. Knowledge is achieved by dedication to study and willingness to learn from experience. The entire process takes persistence. Persistence is fed by desire and hunger. You stay hungry by realizing and believing there will always be more to learn Never reach the point where you consider yourself an "expert" instead of a student. Stay humble, lest the markets humble you.

Become an independent thinker. Don't concern yourself with what "they" say. Don't conform your opinions for the sake of conformity. I constantly tell myself, "don't take the advice of another unless you know they know more than you know. Dare to be a success without fearing failure.

Do not apologize for failures nor be embarrassed by them. Instead view failures as an opportunity to learn. Much more will be learned from losing trades than from winning trades. Failures are a challenge of your commitment and can make you stronger if you will meet the challenge. Failures are the fuel to keep the hunger burning.

Through the learning process, you will develop the important patience and discipline needed to become a winner. In his book, "How to make Profits in Commodities", which I highly recommend, W D Gann listed 28 rules for success in the commodity markets. The vast majority of these deal with money management and/or mental discipline. Some of the sharpest analysts I know are not successful traders because they cannot overcome their own mental weaknesses.

Success does not come easily, nor should it. I CANNOT OVER EMPHASIZE the importance of mental preparation and self-examination. As an additional aid, I suggest Rudyard Kipling' s poem If.

8 Great Ways to Fight Stock Market Stress

Good Wednesday to everyone! Today's guest article comes from Blain Reinkensmeyer of StockTradingToGo.com, a site that provides free investment tips for online stock trading. You can read over 100 free stock education articles and share investment ideas on his stock forum with over 5,000 other investors. Yesterday I had the chance to chat with Blain about the market's current state and his words really conveyed an air of confidence. His post below covers 8 keys...that we all fall short on. So read and apply!

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We all know that stress is bad. As an investor, it is very important to stay balanced while trading because Monday - Friday you are in the game whether you like it or not. So how do you fight stress?

The key is to stay calm and be disciplined with your investing. Market induced stress can be caused by you being too involved in your daily routine and the second by second moves versus staying focused on the bigger picture.

How do you fight stress from the stock market? Here are 8 ways:

1. Use stop loss orders. Stop loss orders are like insurance, they are stock orders that will automatically sell your position at a pre-determined price if that price is hit anytime during the trading day. They remove the “do I sell now? Should I hold instead?” drama of investing and replace it with a disciplined strategy. They are also perfect for maintaining a strong profit vs loss ratio.

2. Don't watch your streamer live all day every day. The real time ups and downs of the market can really cause some temporary stress. If you are like me you have your real-time streamer streaming live quotes from your favorite stocks and the market all day. If you know you aren’t in the right mind frame it sometimes is better to just close the streamer for a few hours or the day and bring it back on tomorrow.

3. Refresh your portfolio balance only once a day. Are your stocks losing ground fast? Instead of refreshing your portfolio every 5 seconds and seeing fresh losses, wait till after the market is closed and then refresh your portfolio balance. Remember, your stop loss orders will minimize your losses for you so you don’t have to.

4. Have a investment strategy. Not having an investment strategy is like trying to play a sport blindfolded. Don’t be disorganized, trade with a plan. Every buy and sell should be part of that plan and as a result will greatly reduce any stress you may have. In fact, a well assembled investment strategy can mean the difference between daily stress and no stress at all.

5. Eat healthy foods. Eating healthy can help keep your body well balanced. I personally enjoy an Apple almost every day while watching the stock market. Eating junk food doesn’t help stress because if your body isn’t happy your mind typically won’t be happy.

6. Get enough sleep each night. Adults should sleep on average 6 - 8 hours a night. If you are getting 5 hours or less of sleep and are wondering why you are more sensitive when your stocks open down take a look at your alarm clock. Getting that extra hour or two of sleep will make a big difference in how you react and respond to different situations throughout the trading day.

7. Don’t surround yourself with stressed individuals. You act like those who you spend the most time with. Take a look at your colleagues, and if they are investors themselves assess how they handle their own stress. If they are emotional investing evangelists screaming at the computer screen and breaking keyboards like Jim Cramer you may want to take a step back and reconsider how much time you spend with that person.

8. Stay calm in intense situations: stop, think, then act. Perhaps the most affect way to fight stress is to take those stressful times head on with a calm mindset. Remember always to stop, think, then act. This applies with everything from making a tough call with a unknown earnings report coming up to finding your portfolio down several percent on the day.

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Take some time and visit StockTradingToGo.com, read over 100 free stock education articles and share investment ideas on his stock forum with over 5,000 other investors.

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