Okay, You’ve entered what you think is a low risk trade, having deduced that this was the perfect time to go long. Your indicators all line up, and CNN reports good 1st quarter results in the sector your trading. Now, you watch in utter dismay as it turns against you, hitting your mental stop, and you impulsively decide to ride it out, hoping (a traders worst enemy) it will reverse and make it to at least break even. Inexorably, it continues to head down, and you finally get out, looking at another gut wrenching loss.

You’ve just become a victim to the most common pitfall that befalls the majority of traders. Listen, most people, when they get involved with trading, imagine some barefoot maverick making million dollar trades from his dockside home on a laptop from a lawn chair, with a view of his yacht named ”Shorted Gold”. And most traders subconsciously behave like that’s the way to do it. In reality, most million dollar trades are initiated by some MIT graduate math nerd, who talks to himself in a nondescript back room of a brokerage house, but no one can hear him over the racket the computers make as they crank out Black-Scholes estimations with Brownian probability curves tweaked for each market sector…You get the drift.

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You can’t succeed against this kind of competition by letting your emotions get in the way. Most traders don’t get it. They flail around buying software programs, trading systems, stock market advisory newsletters and, you know, the thousands of come on's sold on the internet and on the back of trading magazines. Let me tell you a secret none (I would capitalize this but they won’t let me do it on this site, so I’ll say it again, none) of these sellers, Wall Streeters, or any broker will admit to. Are you ready? Come closer so you’ll hear this.

It’s not the Trading system that matters.

Hoof, you say. I know it flies in the face of all the articles and advice you’ve read, but the most important piece of advice you’ll ever get, and don’t forget it’s from me, is to watch yourself, as you do what your doing. Watch yourself as you trade, watch your emotions, and have the discipline to override any impulse to do anything other than your pre arranged plan.Do me a favor, before you do your next trade, do this one thing and I guarantee you will be grateful. Get yourself a couple small 4x6 or so cosmetic mirrors from the drugstore or from around the house. Set them up in front up your computer in such a way as to see yourself as your watching your monitor, a side view. Now stay with me here, it sounds crazy…. before you click the next buy or sell, look at the mirror and ask these questions in the third person,

“Why is he buying (or selling) now? Answer out loud so you can hear it.

“On what factual basis is he basing his decision on?” Again, out loud.

“Is he letting fear or hope alter his view on this trade? You have to answer this one out loud and truthfully.

“If it goes against him, at what point will he exit, and if it goes well, what is the profit exit? Ditto

You see the beauty in this? It helps you separate yourself from your emotions, so that you’ll never be hoping a trade will go well, or be in a trade because you just had a loser and you’re trying to get even before the market closes.

Okay, I lied a little. Some systems are somewhat better than others, but if you only do this one thing, watch your emotions as you trade, you will do ok. Without that no expensive software or newsletter is ever going to make any difference. What makes the difference is you and your ability to control your emotions. You must first deal with the most difficult thing we all have to deal with, which alas, is what makes us all human after all..

Before you lose another dime to Wall Street sharks and brokerage houses, check out Paul Nickel's low risk trading strategies at http://lowrisktrading.info/ and learn about the best tool to becoming a shark yourself.