Conrad's Psychological Edge

[Conrad Alvin Lim]

The importance of staying calm and bored

You are a full time employee looking to make some money from the market to supplement your income.
You don’t have the time nor the resources to trade full time.
You also don’t have much time to search, research and monitor the market.

All you have at your disposal is some money which you are prepared to invest
and possibly lose and some time at night to make a trade or two.

You want to maximise your trades for optimum results.

Do you:

A. Place a one or two contracts on multiple trades?
or
B. Place multiple contracts on one or 2 trades?

Discuss
The important and main thing is that you are the trader in this position
and your objective is to remain Calm and Bored with your positions.

Resolve how you are going to trade.
Know what kind of trader you are.
Know your resource limitations.
Design and stay disciplined to your style of trading.

[Conrad Alvin Lim]

Its okay to lose but better to limit it

In trading, losses are a part of the process. Every trader has his losses. There is nothing wrong about losing.
It is part of the risk we take as traders and we accept it ... with limitations.

Any one can make money in the market. It is actually very easy to make money from trading.
Its the losses that keep us from accumulating wealth.

With that in mind, remember to limit your losses to maximise your gains.
When you place your trade, you must expect to lose all of it.

But if losing all of it is beyond your resource capability,
you should limit the loss by using an automated process.

Automation is a great tool to erase the element of fear.
It allows you to free your thoughts to focus on other trades.

Most importantly, it keeps your resources preserved within the limits of your tolerance.

So start making money by limiting your losses.

[Conrad Alvin Lim]

How to trade without fear or greed

When you place a bet on the lottery,
you have effectively kissed that money goodbye.
All you can do now is pray and wish.
Fate is in the hands of Lady Luck

When you place a bet on the football pool,
you have effectively kissed that money goodbye.
All you can do now is hope that your teams comes out on top.
But you rest assured that you have picked the better team.

When you place a trade,
you must effectively kissed that money goodbye.
All you should do is rest confident in,
and remain faithful to,
the hours of fundamental & technical research
that you have put into the trade before placing it.

If you get your investment back without a loss,
that is a win.

If your investment comes back with a gain,
you have done your job well.

If the investment never comes back,
is it any different from being at the queue of the betting house?

[Conrad Alvin Lim]

Driving Your Trades

When we drive, we stop at reds and go at greens. We watch for pedestrians and obstacles. We avoid potholes and puddles and we speed along when we believe it is safe to do so.

We maintain our vehicles with religious fervor and always ensure we never run out of gas. We take extra care then we have passengers on board. We always keep our eyes on the road ahead and one eye on anything coming from the rear.

We always keep our hands on the steering wheel and one foot ready brake early. Why should any of our driving fundamentals be different from our trading habits?

We have been trained to drive like it is second nature. We do it so automatically that we take it for granted. Why shouldn’t we employ this same automatic behavior to our trading personalities?

The same fears and thrills we get out of driving are no different from trading.

Use the trained fundamentals and the sound techniques that you have learnt and apply it to your trades like you were driving a car. It should be as mundane and boring as driving.

Never breaking your rules and guidelines is like sticking to the law of the road.

Break the law and you will be punished. Make a mistake and the lesson will be costly. Take a risk and the ramifications will be tragic.

[Conrad Alvin Lim]

If you want to read excerpts from my up coming book (due out in Oct 07), you can catch it on my blog at : conradalvinlim.blogspot.com/

Happy Reading! ;D

[Conrad Alvin Lim]

LATEST UPDATE!:

I have migrated the abovementioned blog to my own site at:
www.conradalvinlim.com/

Its growing and it will be another place for you to scout out as I share my personal trading experiences as well as interesting bits from my next book.

Cheers!

Con