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whatever emotion you are feeling but do not have to take any action because of it. |
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5. Persistently but gently bring the mind back to the task at hand. It is normal for the mind to wander even with the compelling data flashing before you on the monitor. Over the course of hours at the screen, your mind will come and go from the task of paying attention over and over again. You want to bring it back each and every time to the monitor, getting to the point that all extraneous distraction can be eliminated for increasing periods when you are making a trade. |
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When you have made your trade and no longer need to attend, you can let yourself be distracted. In the same way we want to learn to shuttle between the inner and the outer, we also want to shuttle between intense concentration when needed and distracting ourselves when rigorous attention is not needed. |
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6. Have a plan. Start the trading day with a plan. And do your best to stick with it. Have a list of stocks that you are watching closely. Have an idea how many trades you are going to make if the conditions are favorable. Have a limit on the number of trades and the amounts of capital you are willing to risk in any one trade and for the day as a whole. |
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Know how much you can lose in a week, a month, three months and still have adequate capital to continue trading. Don't just guess at these amounts. Set realistic and conservative limits so that the chances of being overwhelmed by fear during trading is diminished. |
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If you resist doing any of these behaviors, ask yourself why you are unwilling to discipline yourself by setting limits. If you are going to be a disciplined online investor, you've got to be willing to set limits on your trading behavior. It is just too easy to make impulsive trades no matter how much we tell ourselves we won't indulge. |
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7. Know your limits. When you begin to feel that you are no longer concentrating well, that you're becoming easily distracted, give yourself permission to stop for the day. Resist the compulsion to sit at the computer and trade when your mind is not with it. You will only make bad trades if you fight your desire to get away from it. Turn off the computer and let the market do its dance for the day without you. Remember that there will always be another day and another trade. |
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