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Trading is Easy

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April 09, 2011 – Comments (0)

In simple terms, trading is definitely easy. Trading can be accomplished from someone who manages a million dollars using all the latest technology to someone trading off of a laptop with $50 to their name. The simple act of buying and selling can be accomplished from whoever has the will to push the button.

With such a simple task at hand why do as many as 90% of traders fail and lose all of their capital? One of the key components for the high failure rate is lack of discipline. But first let’s start at the beginning. Most beginning traders see the stock market as fast cash. And really, who can blame them? We’ve all known someone who knows someone that invested in a penny stock that took off and now they are headed for early retirement. We’ve all placed that lucky trade at the beginning of our careers that quickly saw 30+% gains. Almost instantly our minds are filled with the thoughts of dream vacations, fast cars, and financial freedom.

Just as you are on your high of winning trades you get hit with a loss, then another, and another. Now instead of dreaming of vacations you fear for your capital. The winning high that you’ve been on is now replaced by fear and anxiety. Your thought process has shifted from where is the next winner to how do I prevent any more losses. This is how they say, the beginning of the end.

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