Wall Street

By | February 8, 2013

The first experience needed to invest is that of loss, failure, adversity. Having a good dose of humility, because the markets but humiliate us. Very frequently. There is nothing more devastating to a trader, speculator, which lose money operating. But there is something that is even worse: it is winning often and for which starts in markets: starting with a gain. Because that will generate an excess of confidence and will tend to minimize the difficulties and need to study and experience (which is never enough in markets) which must be ceaseless in the career of every trader. Swiss philosopher of the 19th century, and the writer Henri-Frederic Amiel thought rightly that the destination has two ways to hurt us: refusing to our desires and fulfilling them.

What good assertion! Would this good man have not been trader? The catalyst for the destruction of a trader, very recurrently is the ego, according to trading coach Ray Kelly. Makes us feel omnipotent, experts, enables us to lower our guard and least assess the viability of the operations, less evaluate the risk, logic; get drunk with the sweetness of the ego is the worst experience that can be experienced as a trader. But what is vital is to be psychologically fit, that fitness that all market demands to operate successfully, i.e. get rid of the only two things that lead to glory or failure to the trader: greed and fear. Rid of these emotions: removed human t-shirt and put the mechanics, logic, front screen.

Without perspiring face an error, or excite and endiosar against a success. It is difficult. But the only thing that keeps us and protects as traders. The rest is totally fitting, the market being 80% (own) psychology and 20% technical skill and knowledge. Comparative studies of the master must have a trader who came to the conclusion that is comparable to the concentration and ability to react in fractions of a second that have high risk such as aeronautics or military occupations have become. Pilots can still be excellent traders without knowing almost nothing about markets. A pilot of a local airline told me once about what they called Situation Awareness (SA), i.e. awareness of the situation than to any unforeseen in the ship, must react immediately otherwise the outcome is fatal. This refers to the perception and understanding that the pilot must have external elements, where the flow of information is high and the condition for continuation or termination of those elements in time and space can determine a safe flight or a plane crash. A lack of SA can generate a bad decision and translated as human error when a setback or crash occurs. The outcomes generated by the carelessness and lack of immediate reaction, are different for each profession. In one life, may be lost in the other something more than money. Until next time, Paola Pecora Paola Pecora is international market analyst, and is the editor in Chief of Latinforme.com and overall value, the report of monthly investment advice, pointing to investments with strong bullish potential on Wall Street.


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