I am constantly asked to analyze this stock or to give my opinion on that stock.

Stock traders want to know what a master trader’s opinion is on their stock or on the situation they are in.

Rather than seek out the advice of a master trader, I challenge you to become a master trader.

Becoming a master requires you to believe that you do have the ability to become a master, to keep building your life moment to moment without being held back by notions acquired early in life. Mastery is a never ending process that comes about as you let go of false beliefs about yourself and the stock market. Mastery means you uncover your hidden potential and the hidden potential of the market, and begin to take action in line with your stated objectives. Mastery means to trade independently of assumptions you have about yourself and all of the fixed ideas you have about what is possible and what you are capable of. Making decisions based on your willingness to commit to a future goal, you begin to act in the next moment unhindered by old, erroneous illusions.

Trading this way is not a onetime event; it is a continuous process that must be constantly practiced. As you do this you will begin to see that trading offers a succession of moments in which you can choose how to behave. Once you block out automatic beliefs, once you enter the next moment without regard for what you or others think and feel, you tap into a new dimension of power within yourself. You are more present with regard to the events of your trading. You are in the moment.

This may be uncomfortable at first. You are use to functioning in habitual ways and even may define yourself in terms of certain repetitive reactions. After all, we are creatures of habit. Initially, letting go of these habits may trigger panic, anxiety, and the fear of losing it all. But gradually this process will evolve into an increased capacity to tune into yourself and the market during a trade as you learn to trade in the moment.

The issue is not so much a question of working on yourself. Instead, it’s changing the way in which you relate to trading events, a method that lets you take action via specific tasks or incremental steps that fit your financial objective. What happens is that you trade out of your consciously chosen vision rather than in terms of self-limiting concepts of yourself learned early in life. By taking on new challenges and acknowledging your potential as it begins to surface, you begin to move towards mastery.

The master trader manages entry points and downside first before trying to shoot for the maximum results. In other words, you never focus on “how much money can I make” when you are preparing to enter a position. Instead, you focus on minimizing your risk by getting in on a pullback and the lowest level you can on that given day, and on setting a stop loss level in case the trades goes against you. You play in terms of your goals and consciously avoid blowing up. You continually track your gains and you focus on getting your basic score. Your basic score might be 2% a trade. It could be 4%, 5%, 8%, or 10%. Whatever your basic score is, you focus on getting that out of every trade and not on hitting a home run.

The master trader uses self examination to identify his or her own inclinations, whether they are to become too relaxed and complacent after successful trades or to be too inclined to hold onto losers, hoping and praying they will come back. You learn to get out of losers quickly so as to reposition yourself to get back in when the market reverses upward. You are also aware of any inclination to get comfortable with profit and to be fearful of losing, which might lead you to play smaller after succeeding.

The master trader focuses on controlling losses and not on how much money he or she can make. When you keep losses to a minimum by focusing on ways of reducing losses, you increase the chances of adhering to your strategies and hitting your target numbers.

The psychological effects of losing can hurt your motivation to win. Losses can prompt gambling behavior and self-destructive trading when the trader throws caution to the winds and keeps looking to recover all the losses in a few high-risk bets.

I hope you enjoyed this article and please feel free to leave your comments below. Thank you and happy improved trading.

Lance Jepsen
President, GuerillaStockTrading.com