Since I am new here I am going to take A quick moment to explain a few things about the way I write before I give you my take on the most important part of trading anything. Give you a clue. It's all in your head. I'll also be sharing some of my own personal mistakes so hopefully you learn from them.
I write how I see things. This is my point of view. I have been told sometimes the things I write give off the feeling that if you're not into it you're being an idiot. This is true. The way I write, my goal, is to make you think. To make yourself ask yourself questions like am I being an idiot? I had to ask myself it. The answer? It was a great big YES!!! You have to take what I say with a grain of salt. This is my point of view from what life has taught me. When I speak of ways to do things or mental states I hope you can keep an open mind and realize what I'm saying in many cases can be applied to many things in life. Not just trading.
So we are clear. My definition of an idiot is someone who wants a better life, someone always talking about all the stuff they wish they could do, the places they want to go, the things they want to see and yet they sit there doing NOTHING to change their situation. That is an idiot. SO, are you? You answer yes like I did years ago? OK good. Now do something about it. Don't wait, start now and I mean right now. First thing write down those goals. 2nd come up with a plan on how you're going to get there and stick to it. Which is where most fail. I tried it for 3 weeks... didn't pan out... lol. Nothing happens overnight, especially anything good. Goals require 100% commitment. Go all in or don't bother. I'm not here to offend you. I'm here to hopefully help you do something that is not easy to do. Accept your own bullshit. I had to. Had to accept the fact that if I wanted life to change I had to do something about it. Sitting there dreaming about it sure in the hell wasn't getting it done. I had to look myself in the mirror and tell myself quit being a dumbass and get with the program. And it all started with the most important thing in life, the thing that will make you or break you. Your attitude. Are you always negative? Is the cup half full or half empty? Optimist or pessimist?
Your mental state and attitude defines your life. How you handle your emotions plays a massive part. If you read my first entry you know my life has been not really peaceful or easy. I'm currently sitting here with a hand that fights every move I try to make it do. And yet I could not be more optimistic and excited for the future. Yes my hand could very well stop working at any moment. It will suck but I WILL learn to live with it should it get to that point. Life will go on and I will succeed. You know why? Because I know despite how much that would really suck, other than that I have my health for the most part lol. I'm not dying of anything just yet although if I don't quit smoking that is gonna change. Quitting the "hard" drugs was easier than this legal one. Basically I know things could be much worse for me. I know sometimes my unrelenting optimism gets annoying to my friends and family cause they do not understand how I can stay so positive.
So how do you stay positive in a world so cold? It isn't easy at all. The absolute most important part and I promise you this is where it all starts. Love yourself. Find a way to forgive yourself for the bad choices. The mistakes. The ones you loved yet hurt anyway. You have to accept the fact you're only human and poor choices are part of being human. They are what makes us grow up. Which doesn't start happening for most until ones mid 30's early 40's.. I know there's a 25 year old thinking whatever man I'm grown up.. No you're not, at least in most cases. You may be on the right path but honestly none of us ever grow up all the way. You have to accept who you are and change the way you live you life completely cause the old way hasn't worked out so well has it? When you learn to love yourself enough to actually give a crap about your future everything begins to change. Set some smaller goals and reach those on your path to the bigger ones. This will help you gain self confidence. Want to know the best way to gain confidence? Learning. Knowledge builds confidence better than anything else. Knowledge is how you are going to break out of the life you have. I sincerely hope you can learn from the mistakes I have made and that me sharing all of this will help you improve your life.
So you've forgiven yourself and are figuring out hey I'm might not be so bad off. What comes next? Keep those goals coming and do not for any reason whatsoever stop until you get there. You have to stand your ground, never retreat an millimeter. You have to maintain the attitude when life comes in and sucker punches you right in the mouth that you WILL get back up and ask that all you got? Bring it. I will overcome this. Giving up isn't allowed. DO NOT LET yourself give up. Find friends or family to talk to if you need, coach yourself. I do daily. You have to learn to step outside yourself and look at your situation from a strictly logical point of view. Emotion not allowed. Easier said than done I know. But I also know practice makes perfect. Every single time you get knocked down. Get back up and I mean get back up right flippling NOW! I strongly suggest you try and start this before you start learning to trade. You have to have your head right if you're going to trade. Check your emotions at the door, seriously. If you trade with emotion you will lose your money.
Why do I say you'll lose your money? Simple, you will. Trading only works with logic and patience for the most part. The other part will be discussed later. Bet your wondering ok dude how do i get rid of emotions? It is actually very simple yet difficult to achieve at times. Want to remove the nerves? Do your homework!! That is the answer. If you have done what is referred to as DD aka due diligence or simply research and you have done it right you will be fully confident in your pick because you used cold hard facts and logic to come to your choice. I will be doing a DD post next. I will explain what proper DD is. But for now we are sticking with that thing in your head. OK so you've done your DD. You love the company. You believe with your whole heart over time their stock or coin will go up. Here is where patience comes in. You did all that DD, you bought it and its been 2 months. Not much movement. Did your DD tell you 2 months was all you had to wait? If it did and nothings happening I think its pretty clear you missed something. If it told you that you had to wait 6 months why are you impatient at 2? Patience grasshopper patience.
I told you I would share some personal experiences with you so here is the first and this will cement what I said in the last paragraph for you I hope. If it doesn't you might want to reconsider trading lol. I trade in both the stock market and the crypto worlds. This mistakes comes to you via the stock market. I'll remember this symbol probably until the day I die. I was still very green at trading. I had done my DD. The news was super promising. I mean all the signs of a winner. ETRM is the symbol. I bought about 500 bucks worth. It was very cheap per share. About 3 weeks go by and I'm way way way overeager and I got impatient. I sold it for a 200 dollar profit. Two weeks later when it jumped after the conformation of the previous announcement I almost literally threw up when I did the math. I stepped over 96,432 bucks to pick up 200. Cement setting yet? You bought it telling yourself to hold strong until conformation/further news so learn from me, if you're gonna hold strong, HOLD STRONG! Don't be a flipping dumbass like me.
Now if you think you want to be a day trader you have to become and I won't use this word too much, but you have to become the motherfucking iceman or icewoman. Cold as the deepest darkest place in the universe. So cold your blood hardly moves. Emotion and day trading will never ever ever ever ever work together. This is the other part mentioned above. While I say emotion is not allowed its counterpart known also as the gut feeling which is an emotion is what makes a good day trader. But this emotion/intuition is backed back experience. It is backed by knowledge and hours of hours of chart watching. When you are day trading you are jumping in and back out usually very quickly. I do not recommend day trading starting out at all. You need to learn how it all works. You need to learn how the market is gonna react to news. For example you read some news and to you it sounds like the best thing since sliced bread. Guess what the market whales don't give two shits what you think. You have to learn how they think. You have to try and figure out what the market as a whole thinks of this news. Then using that gut feeling backed by knowledge you are in and out and made a profit. Day trading is very difficult. Many things you read will mention day traders as idiots because most are. They go with their gut and no knowledge. They lose a lot of money to. I highly recommend you learn to buy good stocks or coins that will make you money in the long run. Patience is everything.
In closing today some final thoughts. Being positive isn't easy at first or ever really, but its a choice we can all make, nothing more nothing less. Once you start to find it, well it becomes almost infectious. It grows and grows. You have to change the way you look at everything. When something bad happens no matter how hard it is FIND the positive in the situation. By finding the one positive in it you can reduce the negativity around it greatly. Just a quick example. You have a home and a few cars. Storm rolls in and a tree blows over and smashes one of you cars to bits. Yours and mines first reaction is probably gonna be some swear words lol. That is just natural. Ok so your car is smashed. Yeah that sucks. But here are many of the bright sides to this example. You where not in the car when it got smashed. No one got hurt. There's insurance so the car will get fixed. Your home didn't get hit by the tree forcing you to have to leave while its repaired possibly. The insurance provided its good enough is getting you a rental while you get a new ride. Find the positive!!! Train yourself to every time every situation.
Throughout all my future posts the mental state will be mentioned again and again because this is as any seasoned trader will tell you the most important thing when it comes to trading. Here's another example of how your emotions can rape you. You're watching a coin. All of sudden it jumps 20%. Your emotion tells you oh shit its go time and you buy in. Turns out this was one person buying a large quantity and no sooner your order fills at the higher price the price has dropped below where you bought in by 30%. Now you freak out oh hell f me its crashing. Then you sell. No sooner you sell it jumps back up that 30% and 30% more and you just sold it. So you buy in again.... DO NOT DO NOT DO NOT DO THIS!!!!!!! Learn to check your emotions at the door or pay for it.
Emotion and Patience are hand in hand with each other. This post is kinda broad and does not get into a lot of details when one compares it to the mountains of knowledge there is on this topic out there. Its a general overview. You should research how to control your emotions from as many sources as you can stomach. Knowledge is emotional control. I say you should read as much as you can stomach for the simple reason there are so so many other ways to go about changing your own personal mental state. You are not me I am not you so therefore you need to read perspectives and ideals from all walks of life, not just mine cause mine very well won't work without some outside additions.
Getting your emotional and mental attitude under control just like investing isn't an overnight thing. You are not going to be the lucky sob that picks one stock or coin today and retires tomorrow more than likely so why expect emotional control after a few months? It can take years. And that is ok simply because most investments take years to mature anyways. When you have made to choice to start learning to invest you will have reached the point where you are now living for the future and in the end the future is all you have so make it a good one. And as you learn more you will learn how important the human psyche is to markets. Just an example. Find a stock or coin that is running. Then watch when it stops at a round number. This is something that I noticed right away, peoples strange and innate fear of the round number. You will learn how ultimately huge of an impact psychology and emotion have on the markets. Learn to dance in this chaos and you will be smiling.
I will end this with a quote from the one and only MR. Warren Buffet.
"The stock market is the greatest tool on earth for taking money from the impatient and giving it to the patient"