Chapter 3 Time to break free

In this chapter …

I look at the mindset that we need to adopt if we are to take on the difficult job of being a trader. We’ve already learned that much of the accepted wisdom among retail traders is unlikely to be useful, and we’ve investigated our psychological weaknesses. Now we need to start the process of looking at alternatives and improvements. Before we investigate the analysis and decision making techniques that we will need to employ, we must first be in the right frame of mind.

Why do you want to trade?

It might sound like an odd question, but undoubtedly a lot of people take up trading for the wrong reasons. If you have been enticed into trading by an ad in the media claiming that trading can offer a simple way to make a fortune, then hopefully after reading chapter 1 you will now understand that this is less likely than the ad stated. Even if you are successful, it will not be easy. We must avoid the trap that the financial junk-food industry is setting in an effort to separate us from our hard-earned money.

There are times, particularly during equity bull markets (because they are widely reported in the media), when stories abound of everyday folk making huge sums in the markets. This will then attract new traders who want to make this ‘easy’ money and don’t want to miss out on the riches that markets can supposedly offer. For many people there is nothing worse than watching their friends or neighbours make more money, whether it’s ...

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