A myth is defined as an unproved or false collective belief that is used to justify a social institution.
Myths and false beliefs can have a huge impact on how and what we think about the stock market and therefor impact on our trading mindset and ultimately, on how we trade and the results we get. So what are the Myths or false collective beliefs around trading the stock market?
Paper Trading is just the same as real trading except you that aren’t using real money.
Whilst I am a firm believer in testing and practice trading by ‘paper trading’, I know that paper trading can provide a false sense of security. I have seen traders who have ‘paper traded’ and had relatively consistent results, gone to real trading and been’ kicked on their butt’.
…and I was one of those traders!
This can then dent your confidence and embed you in a spiral down to depths you really didn’t want to go to. This could mean losing a lot if not all of your trading account.
The ultimate price to pay is that you will give up trading all together.
…mmmm… maybe you thought that your paper trading was going to set you up so you didn’t have to have that bad experience that you have heard other traders have experienced.
..or maybe you fall in the category of ‘OMG’ I know exactly what you mean. That happened to me and now I am fearful and running scared most of the time when I am trading.
‘How about trying this strategy?
Paper Trade…and paper trade and paper trade. Paper trade until you feel that you have a level of confidence where you ‘know’ you are ready for the real thing, all the while also knowing that paper trading is like learning to ride a bicycle with trainer wheels.
You build up your confidence level over a period of time until you can skid around a corner with the best of them and you are begging Dad to hurry up and get the tools out and take off those darn training wheels! You don’t want anything holding you back, you are more than ready!
Now the trainer wheels are off.
You head on out on your bike and…whoops… you tumble and crash!
Now, if Dad is around watching he will have made sure that you try it first on the grass, go slowly and he did tell you a little about what might happen. Maybe if Dad is not around, you decide that you can go to the top of the steep concrete driveway and set off down the hill, peddling as fast as you can. CRASH! Skinned knees, blood everywhere, buckled bike……. need I go on? ‘
‘So Karen, just so I haven’t missed the point – can you spell it out for me please!’
Sure thing!
When you first ‘take off the trainer wheels’, go slowly and surely until you build up your confidence in the real trading arena. Do everything you can do to ensure you don’t knock your confidence to the point of no return.
* Start by buying the minimal number of shares/option etc and ease yourself into it.
* Know that your trading plan is there for a reason and stick to it.
* Be disciplined in all that you.
* Continue to learn from sources you know are reliable and trustworthy.
* Use other practice tools such as back testing.
* ..and last but not least, enjoy the process and have fun!
To find out more about all levels of confidence building and myth destroying in your trading, come check some free tips and techniques
Karen Oates is a seasoned options trader and mindset coach who excels at helping traders understand themselves and the stock market by using a ‘keep it simple’ trading plan and the mind tools of success through mastery of mindset, focus, behaviors, beliefs and strategies.
Karen is certified as a:
Master NLP Practitioner
Master Results Coach
Performance Consultant
Specializing in Advanced Subconscious Reprogramming and Master Hypnosis
Check out how you can use the best tools and techniques to become the successful trader you want to be!
http://www.outofmymindtrading.com
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