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Mark Eidem on Factors Affecting Trade Performance

Mark Eidem discusses his thoughts on factors affecting trade performance

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Some of the common hazardous attitudes that affect new traders are really some lessons I learned as a flight instructor for about 15 years, ‘cause they’re the same hazardous attitudes that cause errors in decision-making by pilots. One of the biggest ones is impulsiveness. And impulsiveness is a recognition, ‘Oh-oh, something’s wrong. I’ve got to something about it right now.’ And, really, the solution to impulsiveness is, ‘Well, stop. Time out. Take five.’ Consider your options, consider your choices, decide which one of those is best, and then act accordingly.

Another one is invulnerability, and this really tends to play upon traders who are trying to make a lot of money very quickly, focusing on big profits. Invulnerability: ‘That won’t happen to me! I can take big positions. I can take a lot of risk. I can swing for the fences. I won’t blow up. That won’t happen to me.’ And the anecdote is, ‘Wait a minute, what could go wrong with that? How could this happen to me?’ And by incorporating a recognition that those two hazardous attitudes exist, new traders can develop better habits and build better strategies.

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