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When Your Money
Is On The Line...
Market Timing And Emotions
The winning market timer is cold, calculating, and unemotional.
Sound a bit unreal? Maybe it is, but the reality is that
it is important to control your emotions, rather than let
them interfere with your trading decisions.
We have written many, many times about fear and greed and how they are the true
motives behind market behavior. Fear and greed may control the masses, but if
they are allowed to control you, you become one of the millions who can't understand
why they cannot make a profit when, supposedly, everyone else is.
There are also other emotions, such as anger and disappointment, that can influence
your decisions. Emotions may interfere with discipline and sound decision-making.
But, they are not "all-powerful". You CAN master and control them.
Fight Or Flight
It is reasonable to be fearful when your money is on the line.
That is why winning market timers protect themselves by trading with a detailed
market timing strategy. Timing strategies are NOT affected by the emotions of
the masses, and they are also designed to manage risk.
When you KNOW your strategy works over time and also is designed to minimize
risk, you can execute the buy and sell signals effortlessly and with less fear.
You do not fret over the inevitable losing trade.
| "The
moment you deviate from the strategy, you become
one of the masses." |
Instead you are excited about the next trade. You KNOW
that next big winning trend is coming. Whether it begins
tomorrow or in several months you trade with the knowledge
that when it begins, "you" will be one of the winners who
capitalize on it!
This is why trading with a specific timing strategy is critical. The moment
you deviate from the strategy, you become one of the masses. But if you stay
with the plan, you USE those same masses to your advantage.
Anger And Disappointment
Anger and disappointment are two additional emotions that
powerfully influence trading decisions.
Both emotions concern expectations about our market timing performance and how
we expect the market to behave.
We become angry when things don't go our way. Because we want to win, we hope
that the market will behave in a manner consistent with our timing strategy.
When we feel that fate, or some unidentified external forces (i.e. news events)
have created a situation that thwarts our plans, we become angry.
When we think we ruined our own plans because of our incompetence, we feel disappointed.
Regardless, there's a natural inclination to want to control our destiny, and
when it comes to market timing, we want to control the market.
We may want to impose our will onto the market.
The market, however, can not be controlled. One must accept what the market has
to offer. You cannot make the market do what you want it to do.
Acceptance Is Key
If you accept that you are powerless over market action, you will be less angry
or disappointed. If you anticipate and truly accept the fact that the market
can, and often will, go against your timing strategy, and that it isn't personal,
you will not be fazed by it when it happens.
You will just accept it, and move on.
If, on the other hand, you expect the market to move in your favor, you will
feel angry and disappointed, which often leads to feelings of revenge or despair.
These emotions can be paralyzing. It is better to accept the market for what
it is. Accept the results you achieve, good or bad, and just move on to the next
trade. A good timing strategy is not profitable on every trade. No strategy is.
| "Those who leave
never achieve. All they do is chase the promises of supposed market
experts who will take their money, but seldom give them the profitable
results they desire." |
But if you quit because you are angry or disappointed, think how you will feel
when the next trade is the start of the next big and profitable trend!
Emotions are a natural part of trading. The markets don't always meet our expectations.
If you accept this fact, you will be able to minimize the influence of emotions.
You will then follow your timing strategy and over time, will achieve the results
you desire.
Those Who Leave Never Achieve
Those who leave never achieve. All they do is chase the promises of supposed
market experts who will take their money, but seldom ("never" is a more accurate
word) give them the profitable results they desire. There are hundreds of
them out there making promises so ridiculous we are embarrassed to even print
them.
FibTimer does not post inflated timing results like so many of our competitors
do. We have years of trading behind us as well as years of posted real-time trading
history. All subscribers have full access to all trades and trading
history.
Stick with the plan and you will succeed.
Recent articles from the FibTimer market timing services;
Are We Lemmings, Or Are We Traders?
Discipline and Market Timing
Following The Crowd... To Conform Or Not To Conform?
Market Timing Facts vs. Market Timing Fiction
Fear; The Enemy of Market Timing Success
Markets Go Up, Markets Go Down
Letting Your Profits Ride
Following an Unemotional Trading Plan Equals Profits
For prior commentaries still posted on the website, Click
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© Copyright 1996-2009, Market Timing Strategies, Inc.,
All Rights Reserved.
FibTimer reports may not be redistributed without
permission.
Disclaimer: The financial markets are risky. Investing is
risky. Past performance does not guarantee future performance.
The foregoing has been prepared solely for informational
purposes and is not a solicitation, or an offer to buy or
sell any security. Opinions are based on historical research
and data believed reliable, but there is no guarantee that
future results will be profitable. |
