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Two widely followed market experts have fundamentally conflicting outlooks on the current market. One says bull, the other bear. Who should be believed? This is a question that runs right to the heart of trading psychology.

The Bullish View

Abby Joseph Cohen, the Goldman Sachs senior market strategist, said yesterday that “We do think the new bull market has begun.” The Wall Street Journal says she is calling for the S&P 500 to reach 1050 to 1100, based on an improving economy and corporate profits. Continue reading ‘Trading Psychology – Why Following the Experts Harms Our Trading Psychology’ »

What does trading psychology say about being frustrated? Here’s the scenario: you’ve been sitting on the sidelines while watching the market rally 50% off the March lows. Are you itching to jump in and buy? Are you frustrated because you are missing profits?

Many traders I’ve been talking to feel this way at the moment. They have watched the market rally and they are not on board. And, it’s not just the swing trader who feels this way. Many times, day traders are confronted with a narrow, flat market or even a trending market that offers little entry opportunity.

That happened to me this morning as I was coaching a group of traders in the S&Ps. The market was moving, but there were just no entries. Sitting on your hands can be one of the most difficult things a trader needs to learn. We often feel unproductive. After all, we are traders; we are supposed to trade! Continue reading ‘Trading Psychology & Trader Frustration’ »

A question I often hear is, “How can trading psychology help me to stay focused? I seem to easily become distracted and then miss good trades!”

The Dilemma

Many traders have the good intention of trading attentively, if not aggressively, and making money as soon as the market offers an opportunity. But the markets are not always willing to offer sound trades. Many times, the market will lock us out with a large directional move, or offer little profit due to a flat, range-bound day. How you respond to this can mean the difference between profit and loss. Continue reading ‘Trading Psychology – An Important Tip on How to Stay Focused While Trading’ »

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