Traders Mindset & Risk Psychology

By Ahmad Hassam

Your personal trading psychology affects every trade entry and every trade exit that you make. Every great trader has a deep understanding of his/her psychology. Even great traders struggle with their inner demons from time to time. Those demons generally are fear, greed or regret.

You will have to keep an eye on your trading psychology in your journey from a novice trader to a master trader. The quicker you will confront your demons and the more success you will have in slaying them, the more you will develop the traders mindset.

There are certain traits that help traders and investors make consistent profit in the markets. Some of these traits will come naturally to you as a trader. However, others you will need to cultivate and acquire. Now this is what you feel when you acquire the traders mindset:

a. You will stop worrying about the money and start believing in your trading system. b. Trading and investing are inherently risky. You will accept risk in trading and investing. c. Even great trader cannot avoid a losing streak. You will accept winning and losing trades equally as a part of trading. d. In the end you will start enjoying trading. e. Every time you lose, you wont feel being victimized by the markets. f. Learning is a continuous process. You will be always looking to improve your skills. g. The trading profits will start accumulating and start flowing into your bank account as your skills improve. h. With experience you will be more open minded in your reading about the markets. You will want to keep your opinions to the minimum. i. You will want to learn from every trade or position. j. You will try to align trades in the direction of the market and try to flow with the market.

These are the lists of some destructive emotions that you will have to face when trading:

1. Most of us fear failure! So fear of taking a loss and the fear of being stopped out is going to haunt you. 2. Anxiety will make you get out of the trades too quickly. 3. When you are not in control you wish and hope that you will make a winning trade. 4. You will feel as if being victimized by the market and will feel anger after a losing trade. 5. Never ever trade with borrowed money. It can ruin you. Trading with borrowed money or trading with money that you cannot afford to lose is a destructive emotion. 6. When you think adding on to a losing position can help you avoid a loss. 7. Just like addiction to gambling, compulsive trading 8. Excessive joy after winning a trade. You are tying your worth to the market. 9. Poor trading accounts profits. This results in poor self esteem. 10. Not following your trading system. You dont believe in your system or you havent tested it well. 11. Second guessing your strategy. Fear of loss can paralyze you. 12. Not trading the correct trade size. The trader might be refusing to take responsibility for managing the risk or be too lazy to calculate the proper trade size. 13. Trading too much. You feel like conquering the market which you cannot do. 14. Afraid to trade. This happens when there is no trading system in place. 15. Irritable after the trading day. Trading is like an emotional roller coaster due to anger, fear or greed. This happens when there are unrealistic trading expectations.

Try to take a look into the mirror and see if you are experiencing any of these destructive issues. This exercise will help you identify your strengths and weaknesses. When you find one of these emotions in yourself try to isolate and defuse it.

Try to write it down and find a solution once you have identified a certain destructive emotion present in you. Just the action of writing it down will help you bring one step closer to nirvana. Traders mindset is getting to a place of profitability, peace and bliss. Getting the traders mindset should be your goal. - 23210

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Develop your own Forex Trading System. Get Netpicks Forex Signals Free!

Day Trading Versus Investing

By James Larson

Day trading is something completely different than investing. A day trader buys and holds stock for small time intervals that last from a few minutes to a day or two. An investor buys stock and holds it for much longer. Day traders intent to make money from small fluctuations in stock prices.

There have been parallels been made between day trading and gambling. The truth is that the two don't have many similarities. A day trader must base his actions on specific data and analysis before a stock purchase and sale is made. Luck doesn't play a role in the decision making process of either the investor or the day trader.

Most stock prices fluctuate from day to day from hour to hour. Their volatility is more like a rule in markets across the globe. There are many factors that determine the fluctuations in the prices of a stock. It doesn't matter if the market is calm or not if people are buying or selling stock prices will fluctuate. It is these daily small fluctuations that the day trader depends on to make a profit.

While a day trader is looking for relatively small returns real investors are in it for the long run and they are looking for much larger price fluctuations in stock. Investors research and buy so that their return is preferably higher than what they would get if they save their money in the bank also taking inflation in consideration.

If you are thinking about playing some money in the stock market then you should be aware of the potential risks. You wont become an investor or a day trader overnight. The idea that practice makes perfect applies to both investing and day trading.

The primary difference between an investor and a day trader is time and percentages. These two terms shouldn't be confused because they are used to describe two different techniques.

Whether you are thinking of becoming an investor or a day trader you should take some time and learn about the techniques involved. In the end if you decide to take your money into your own hands you should be able to make the right decisions about investing. - 23210

About the Author:

The best thing you can do before you begin investing is to talk to an Investment Advisor. You must to find someone in your area though. If you live in Toronto then you should find an Investment Advisor Toronto.

Forex Option Trading Get Your Profits

By Mark Green

With the forex option trading market growing larger and larger every day, it is no wonder so many people are getting into it. The smaller margins are used in leverage so that the small traders can still make large profits. With the potential of making massive profits, it is a great trade to start in.

It is a critical aspect knowing how to use forex option trading to your advantage. I know your thinking, how could you possibly need more knowledge on this, but the truth is it never is a bad idea to learn more information. For a starting trader with a small margin to trade with, this is the best way to start. Starting off this way can help you learn and build up your trading skills and keep you on a course to larger trades and high profit margins.

For many investors, forex option trading has become the favored trading. The great part about forex is it gives flexibility to the investors. Quickly put, option trading is a currency contract enabling the buyer the right to purchase or sell the foreign exchange spot contract on the established price to the date specified.

How could you make your forex option trading more profitable? Do you need to step it up to achieve the profits you want to make? If that is you, then there is the perfect latest thing to forex that is just for you. What would it be worth if you could make yourself trade better than the average trader? If you are a skilled or new trader, what could you do to increase your profit potential and take it up a notch?

There is always room to increase your forex option trading profits. Knowing what to improve can be a hard thing for a trader. Wouldn't you value information passed on to you from a long time experienced trader that can save you countless hours of trial and error? It is always key to keep an edge over the average trader, discover a secret to making your trades more profitable. Get the secret to making more money on your trades, get yourself on track with the key to making you money in forex. The sooner you take action, the sooner you will see the profits that you want to make. - 23210

About the Author:

If you are serious about Forex Option Trading , you cannot miss the information you will learn about in this guide. Others preach to be the best, but the proof is in the guide. Get your guide while they last.

The Monopoly Way to Real Estate Investing Success

By Julie Broad

Anyone who says investing in real estate is a sure thing is mistaken. Although you definitely have more control over your investment than you do with stocks, people (including me) can and do lose money on real estate. However, this is accomplished by buying bad properties, not by buying at a bad time. There is no such thing as a bad time to buy real estate.

The time to buy real estate should always be now. Even though I say the time should be now, I mean that only if you find a good deal on a property.

I learned about real estate early because I come from a family of real estate investors. Whenever there are big family events, we always play Monopoly quite competitively. It's not just a game to us; we do it to prove how good we are at investing in real estate.

The secret to winning in Monopoly is just like the secret to winning in life with real estate; although you cannot time the market it is about timing.

You want to buy as much real estate as you can, as early on in the game (or in your life) as possible . . . which means, the best TIME to buy real estate is ALWAYS now.

Here's the caveat though - when you play Monopoly, what do you do? You open up the box, and read the starting line which states "The Objective of the Game is to Become the Wealthiest Player Through Buying, Renting and Selling Property". Then, you probably pick your playing piece, roll the dice and get going. If this is how you play, you've skipped some critical steps in the process. You may succeed, but your chances of failure are higher than your chances of success.

Just like you wouldn't play Monopoly without knowing the rules, you should not start investing in real estate in real life without knowing the 'rules'. Do you know what your objectives are with real estate investing? Once you know your objectives, then you can start doing research to see which properties meet them.

The perfect property is one that matches your objectives and has a stable enough income to support itself through good and bad times. This is the type of property you need to buy and hold. The rent you make from it should be enough to get you started with other investments.

A player who travels around the board in Monopoly not buying any property, desperately hoping for the chance to purchase Boardwalk may never land on Boardwalk. That player will end up losing to the other players that settled for buying a lesser property at the beginning of the game. Sitting on the sidelines waiting for the perfect property or the perfect market doesn't get you in the game.

Although Monopoly and the real-world real estate market can seem totally random, they are not. The market has little to do with whether or not you lose money. It's possible to lose money in a good market and make money in a bad market. Most of this is decided by how much people decide to research before purchase.

Essentially, there are two parts to being successful at buying real estate: 1. realizing that now is always the perfect time to buy, and 2. finding a property that will pay for itself through good times and bad.

I haven't even mentioned the fact that current market conditions are great for real estate investors to find deals in. Interest rates are low, prices have come down, there is a ton of inventory on the market AND homes are very slow to sell. It's really the perfect time to buy but I am not really trying to convince you of that. I am just trying to convince you that, even if the property you buy today goes down in value tomorrow, you will still be successful as long as you buy one that brings in enough rent to cover it's costs. If you can find deals like this, NOW is ALWAYS the best time to buy. - 23210

About the Author:

Learn How to Retire with Real Estate with Julie's free Buying Investment Property Starter Tips Guide. Learn how to create financial freedom, extra revenue and massive wealth with tips like: How to find quality rental properties, finding and keeping great tenants, and easy ways to make more money with real estate.

Home Inspection Basics As A First Time Homebuyer

By Alexandria P. Anderson

All homebuyers are prone to overlook major problems during the buying process only to be surprised by them once they have already paid for the property. You can consider hiring a professional home inspector even before signing any contract to avoid any regrets and stress after buying a property.

However, you aren't required to conduct an official home inspection until after signing the initial contract, so it's a good idea to learn as much as possible about the condition of the home by having an honest discussion with the seller, and even performing your own 'mini' inspection where you can check for basic structural defects or potential problems.

Most sellers will be open to having you inspect the home well before signing any type of contract, and this gives you some leverage when you are negotiating the final price. Barron's 'Smart Consumer's Guide to Home Buying' encourages all prospective homebuyers to prepare a checklist and note any problems and areas of concern as early as possible. The authors of the book explain that, "If you are thinking about buying a house that will need renovation or upgrading, the more value will be derived from your mini-inspection."

Create a checklist that you will use in your home inspection. This will help you in taking notes of the general condition and appearance of the house. Below are important issues to include in your notes:

The age of the house - You should know exactly when the house was built. Find out if there are any renovations or upgrades done and when these took place. Ask if blueprints, architect or engineer plans are available.

Check the foundation for potential problems - are there any large cracks or noticeable water problems around the home or in the basement? Ask about flooding issues and weather-related problems that have taken their toll on the home in different seasons.

Examine the interior of the house - Keep an eye for any defects and other potential sources of problems in the interior of the house. Specifically, you need to check if all walls are even with no cracks and if all doors are easily opened and closed. Take a picture of any visible crack, if possible. Check if there are any molds, foul odors and if all water drainages and faucets are working properly.

Examine the exterior of the house - Again, look for any obvious defects and potential problems. First, check if all doors and windows open and close easily. You might also want to check if they are properly insulated. Take note of the sidings and see noticeable signs of wear and tear.

Inspect the house's heating and air conditioning systems - You want to know the average electricity cost per month when operating these appliances. Ask about the age of these appliances as well. Old heating and air conditioning systems are usually inefficient and you may need to replace them.

In addition to the written inspection report, you may consider taking pictures or short video clips using a digital camera/camcorder so you can review everything again in more detail at a later date. This extra footage or coverage may also give you an upper hand during the negotiation process with the seller. - 23210

About the Author:

Author and Realtor Alexandria P. Anderson helps clients to find and purchase Plymouth MN Real Estate as well as Property for Sale in Plymouth, Minnesota.