People often wonder how some make it big on the stock market. The stock market is often compared to gambling, so success boils down to sheer luck right?
Being successful on the market nothing to do with luck and everything to do with analyzing the information given to you and having a good attitude. There are strategies in place to earn money, rather than leaving it all to chance.
Executing a plan sounds so simple and anyone can learn how to trade stock options. So why is it that 95% of people still lose money?
The answer is, attitude.
Let’s face it. We’re all human. And as humans, we are emotionally driven individuals. In the market, we’re often susceptible to experiencing greed and fear. Our natural instinct is to fit in with society and fit in with our tribe, which can be fatal in the marketplace for obvious reasons. You follow your peers into a bad trade? Guess what’s going to happen to that trade? You, too, are going to lose big.
Let’s focus on some common negative mindsets towards trading first.
Impatience often looks like a “get rich, quick” attitude. Again, this is where the stock market is compared to gambling or winning the lottery. Many take high risks in order to become millionaires overnight, but the stock can easily plummet overnight as well.
Although that sounds adventurous and exciting, it unfortunately is not ideal in making long term income. When you risk big, you can lose big. The most successful wealth portfolios are built up over time. Earning a mere 5% a day on the market can double your income in just a month, leading to better long term wealth.
- Feeling like the market is rigged against you.
You may have this same mindset in other areas of your life – maybe you just can’t get that promotion at work, or you never get a good parking space close to the supermarket. The universe is conspiring against you!
I hate to break it to you, but the stock market is not conspiring against you. It doesn’t care about you. It doesn’t care if you make money or lose it. So there is the harsh truth.
- Lacking in self-confidence.
Again, this is something you may be bringing to the table in your daily life.
Think about it, if you go into an interview for a new job feeling self-doubt and low self-esteem, what is the likelihood that you are going to get that job? Probably slim to none. Your lack of confidence is expressed to your interviewers, causing them to reject you as a potential employee.
Maybe you’re faking it ‘till you make it, which I’m a solid fan of! But when it comes to trading you HAVE to exude confidence or you will lose. Trading can be tough on your emotions and mindset, so it’s important to ensure that you are firm on your positive mindset.
So, are you confident in your belief that you ARE a trader?
Now, let’s look at some winning attitudes adopted by winning traders.
- Winning traders are comfortable with taking risks.
Although we like to minimize risk, there is still risk when playing the stock market. People who have low risk tolerance and are terrified of losing a trade shouldn’t be trading at all. Risk is apart of the game and the lifestyle. Every trader loses at some point, so you need to accept the risk involved and move on.
- Winning traders have strict money and management rules.
Winning traders are not gamblers, as opposed to popular belief. They take calculated risk, implementing a strategy that works best for them and the market terms of the day. They assess the risk and potential before getting into any trade and have an exit strategy.
- Winning traders keep their emotions neutral to winning and losing.
Don’t give in to being excessively excited about winning a trade or absolutely devastated when losing a trade. This is the balance between greed and fear. Try to keep your emotions as neutral as possible and be objectively to the market and its earnings.
Hugh Grossman, Head Trader at Day Trade SPY.
Hugh Grossman is the founder and Head Trader at DayTradeSPY and uses his vast experience to teach his methods to make consistent daily gains trading SPY options. Join Hugh in his interactive Trading Room to see how he regularly pulls in the profits!
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