Thousands of years ago, we didn't have the luxury of walking into a grocery store and easily fulfilling our base needs. We lived in the state of nature, fighting off the elements and other predators, and could not pass up on something that was right in front of us in order to wait for something better. That something better might not present itself. Thus, we are wired to take what is immediately front of us.
This manifests itself in trading. Once we get the smallest of profits, years of evolution tells us to take that nut and pack it away. A trader must fight this survival instinct. Continually taking small gains before a trade has time to work for you is the road to ruin. You can pick the greatest stocks the market has to offer, but if you are cutting your profits short, your account will die a slow death.
Fight this survival instinct by having a plan before entering the trade. Set your stop, set your target, and forget about the trade until either the stop or entry is hit.
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2 comments:
Great post...I continue to.struggle with this and its a helpful reminder.
Indeed, well written post on "How To Fight Your Survival Instinct To Become A Profitable Trader". I am really impressed with work done by you. Have a wonderful day!
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