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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 23 August 2006 Table of Contents (1) Quote on Perspective (2) Article - Perspective (3) Trading Plan and Technical Analysis full day workshops (4) Website Update ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Stay up to date with all that is happening at Trading Plan, by subscribing to our 'Trading Blog' (no email address necessary). I am continually adding content and every update of this site is announced here, including minor content updates, page additions, and product releases. So stay plugged in by subscribing to this site's RSS feed. Copy and paste the address below into your RSS reader to receive the Trading Plan RSS feed... http://www.trading-plan.com/Trading-Plan.xml Not sure what RSS is? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -- 1 -- Quote on Perspective "I have often thought it would be a blessing if each human being were stricken blind and deaf for a few days during their early adult life. Darkness would make them more appreciative of sight; silence would teach them the joys of sound." Helen Keller (1880 - 1968). -- 2 -- Perspective Have you noticed the world changing? Have you ever noticed how people generally are becoming less patient, less courteous, less willing to help others, yet more demanding of others than ever before? There is no doubt that today our lifestyles are far busier than ever before as we are trying to fit more into the 24 hours each day provides us with. This leads to stress which leads to impatience and other negative emotions that people are highly capable of. This is unfortunate but this has been the trend for several years now. Generally speaking, the lives of many have never been busier and more stressful. It has become a driving force behind most visits to doctors for people of all ages. Medically, when a person is experiencing stress, adrenaline pours into the blood stream as part of a person’s ‘fight or flight’ response and muscles throughout the body tense in anticipation of a challenge. Immediate effects can range from a short temper and heightened emotions to difficulty sleeping. These emotions can have a negative influence on traders. It is often talked about how people can become too emotional and stressed when trading and making decisions which directly impact on their own money. Furthermore, this discussion often leads towards the reality of experiencing losses and how to cope with them. What do you do when confronted with a losing trade and then how do you cope emotionally with it? Often, many traders become upset when facing a losing trade which leads them into a state of paralysis where they can’t decide to close the trade and take the loss. If they do take the loss, they can be easily upset at having lost money which only serves to cloud their judgement in subsequent decision making. The best traders don’t get upset when they are confronted with a loss. I personally feel a sense of relief when I close a losing trade knowing that I have completely eliminated the possibility of any further loss in that trade. So, what is the cause of being upset? It is mainly the loss of money associated with other emotions and stresses in our life. I know something that has helped me cope with losses in the past and when things aren't going all your way, is to think about perspective. I think it is important to weigh up everything in life and the world with your loss. Put the loss into perspective with everything else. I was encouraged by an email I received recently from a woman working through my trading plan workshop. I have taken an excerpt as follows: “I’ve learnt to identify the people I can assist (to help them help themselves) and I have come to understand precisely what my role is, in the whole process. I have had to learn how to handle the fear, anxiety or intimidation sometimes I feel when patients are insistent or threatening in their behaviour during consultations with me. I’ve come to understand and respect the importance of sticking to ‘my rules’ and handling my emotional responses in very demanding and emotionally charged and threatening situations. Yes, I do feel confident that I can succeed as a share trader. But I’m also realistic enough to recognise that my confidence has boundaries. In 30 years, treating a wide variety of people including drug addicts and very mentally disturbed patients, I’ve only twice been assaulted – only once where there was a real threat of serious injury, which fortunately didn’t eventuate. I’m aware of the concept of risks and I’m very aware of the need to adopt and respect the rules necessary to minimize those risks. I am however, no super confident person – just a very ordinary person. I struggle with a weight problem that is starting to catch up with me. Finally, I’ve come to terms with the concept that its OK to set a responsible and reasonable goal to ‘make money’ (my upbringing had subtly suggested to me that this was an unworthy motive) – the real issues, it seems to me, are to firstly keep perspective and balance in the time and effort we invest in making money; and secondly, what we do with what we get. I don’t want to be in a situation where making money becomes the focus of my existence. And I don’t want to be employed in a situation where the $$$ are the principle reason for taking the job.” I was moved by this response so much that I immediately asked her for permission to reprint some of it. What I liked about it was the recognition of the importance of rules in dealing with potentially emotional situations and how she felt that protected her. Also, to not be consumed by the desire to make money – “I don’t want to be in a situation where making money becomes the focus of my existence.” When you have perspective, you realise that trading isn’t everything in life and you are better equipped mentally to deal with losses and the bad times. Would you like some ideas for perspective? How about all the things that are happening on a daily basis in the Middle East crisis? Ever cast a thought to all the troubles faced by many millions of people in Africa? How about the constant fear that some people must live through with the ever increasing threat of terrorism? Remember not so long ago when the worst ever Tsunamis which were triggered by an earthquake in the Indian Ocean, killed approximately 230,000 people and ruined the lives of so many more? I know it may sound a little sad and depressing but it is true. Is taking a loss for $500 for example, the worst thing that can happen to you? Do you still have your health, your home, the love of your family and friends, or better than all, your children? Perspective is a great reality check and ensures that any losing trade is quickly dealt with mentally and you are able to move on. So perhaps next time when you are faced with loss, you will ask yourself the following question, “Is this the worst thing that is going to happen to me today?” I think you will find there are far worse positions and situations to be in than yours right now.
-- 3 -- Trading Plan and Technical Analysis full day workshops After the sell out success of the first technical analysis workshop in Singapore on 23 July, this course will be conducted again in Singapore on Sunday 27 August. Throughout this course, I will be passing on all of the things I look for when entering trades. I will also be conducting a Developing your Trading Plan workshop on Saturday 26 August which covers the mindset, money management and the method. Bookings and further details are available by contacting Dickson Yap on +65 9788 8141 or dicksonyap@dpr-intl.com -- 4 -- Website Update Over the last couple of weeks new information has been added on trading foreign exchange or forex. I am happy to introduce Grace Cheng as the chief writer for all of the material in the forex section. Her website is www.gracecheng.com and you will see that she is constantly writing material about the current state of the forex market with her own observations. Visit http://www.trading-plan.com/fx_general.html to view the new forex section. In the next couple of weeks, the options trading section will also be established with great practical information on how to trade options. If there is anything you want to learn about specifically with regards to trading, do not hesitate to contact me. Contact details are at http://www.trading-plan.com/contact_us.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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