I use to think I did this to make money, I don’t. I do it to be right. Trading for a decade has taught me that being human doesn’t bode well to being a successful trader. As humans we all want to be right, those who can’t accept the notion that it’s OK to be wrong, especially in this business, never achieve consistent success.

Trading is one of the few industries where you can be wrong a lot and still be profitable. One analogy I use is this…. trading is like going to the racetrack where people are jumping up and down, with a ticket in hand, watching horses run around in a circle. Why? Why are they so excited? I’ll give you two reasons, they have a chance to make money but more importantly they have a chance to be right. Think about it, it’s the same two powerful emotions we feel when we have a trade on. The only difference is once you bet on a horse your decision-making process is over, you let the horses run their race. However, once you place a trade most of the time your decisions have just begun. Yet you’re in the same state of mind as the guy with money on Seabiscuit in the 3rd. What do you think those excited bettors at the track would tell you if you asked…Hey, I’m short 10 S&P’s and its 5 handles against me, what should I do? They would probably tell you to sell 10 more!!!

I’ve come to grips a long time ago to the reality of how poor emotionally influenced decisions are. Having a Trading Plan is easy; sticking to it on the fly is the tough part. If you strip out the element of surprise, you strip out emotion. Expect all possible outcomes, BEFORE you execute. Here’s a novel idea…know where you’re getting out of a trade before you get in it. I have a saying written on a white board in my office…”If you expect a trade can go against you and it does your not surprised and if you’re not surprised your not emotional.” Being wrong is OK! However, making a prediction and being right doesn’t count unless you make money. You have to manage the heck out of your risk but you have to take risk first. Good Luck!

For more from Anthony, visit www.anttradinginc.com/