Life Lessons From Day Trading Stocks
You can learn a lot of life lessons from your wins and losses in the market. I've found that in order to be profitable with your trades, there are a few rules that are really helpful to follow. It can be hard to follow them though because it takes discipline but isn't that the struggle with living a good life? Being disciplined to do the things you need to do so you can have the life you want to have? Here are just a few lesson I've learned I need to always remember and discipline myself to:
Don’t over trade. When you make a mistake, don’t rush out to try to fix it. You’re likely not thinking clearly and you’re more likely to make another terrible mistake. How many times have you made a mistake of some sort and rather than reflect on it and learn from it, you jump to some reason why you made the mistake without putting any real thought into it and you rush into some thoughtless action only to make things worse in the end. Here is the tip: don't do that. Instead, take some time to get your bearings. Walk away. In fact, remove yourself from the ability to make a knee-jerk reaction and spend some time thinking about why you went wrong in the first place. If you've just made a wrong turn, the last thing you want to do is whip the wheel back in the other direction. If you do that you run the substantial risk of losing control and careening into an even bigger, more violent problem.
Learn the patterns. You’ll develop an instinct and you’ll learn to trust yourself and your gut feeling. Nothing is new. History repeats itself and human nature hasn't changed since the fall of Adam and Eve in the garden of Eden. When you see people responding to something a certain way, you can bet that, all things remaining equal, they will continue to respond the same way. You'll notice how their responses change as the underlying issue changes and before too long you'll be able to predict people with a certain degree of accuracy. It's a learning curve so don't expect to make the right predictions right away, you have to learn and develop your gut feeling.
Be impatient with your losses and cut them quickly. Don’t let small problems fester into big disasters. Too many times we get into something be it a relationship, a job, an investment, a new purchase of some sort or any number of things, and then things start taking a turn for the worse. There comes a time when you know in your heart of hearts you need to do something to rid yourself of this unfortunate destructive item that you are attached too but you reason that if you just hang on long enough, things will turn around. The longer you hang on to a bad situation, the harder it is to let it go or otherwise take steps to rectify the situation. You become a bag-holder and what was a problem that you could have been rid of earlier has now grown into a huge disaster. Not getting that knocking sound looked at in your car's engine has now turned into a problem so big you need your entire engine replaced. Not cutting ties with that boyfriend or girlfriend who can't seem to be kind has now ruined your relationships with other in your life you care deeply about. Because you didn't quit that job that made you miserable to get one that you would enjoy, you are now tied to a miserable work-life because life has gone on and you now have kids to care for and a mortgage to pay - you just can't afford the risk of making a career change.
Be patient when your decisions are paying off and let your winning trades run their course. Recognize and accept the benefits of good decisions, this will incentivize others to want to make good decisions also. People need to show off their good decisions more often and talk about what lead to them and how they arrived there. This is a positive teachable moment that others need and if there's one thing everybody is sure to agree on, it's that this world needs more people making good decisions.