Introspection- analyse your personality

You must be wondering what I'm talking about. If you went through my earlier lesson about psychology then you would know. It is very important to introspect and find out for yourself the type of personality you possess.There are two sides to personality, one of which is temperament and the other character. Temperament is your inborn nature, and character is developed by the environment you grow in coupled with your temperament.

In trading it is the temperament which will influence your moves. Successful trading is 80% psychological and 20% your startegy. So first analyse whether you are aggressive ,fearful ,laid back ,patient, egoistic. Your style of trading should completely depend on your peronality type. You should attempt short tem trading only if you are aggressive and bold. The turmiols in the short term are too much to take for the weak hearted. A laid back person would be best suited to make long term investments. If he were to attempt short term trading , he would surely lose money. The most dangerous of all is the egoistic trader. Accepting that the market is supreme and that your trade was wrong is the most important trait required for any person entering the markets. If not, you will soon be left with no capital.

The bottom line is that when a trader develops a trading strategy, it must cater to his personality and to the trading style he feels most comfortable with, rather than trying to mimic the approach of another trader with a different temperament. Now you know why I said never trade on tips.