The Psychology of Trading

The Psychology of Trading

Many people will try and tell you – or more ominously sell you – the secret of success as a Forex trader. However when push comes to shove, what really matters is how you manage your trades and how you manage your emotions – get those things right and you should be on track for success.

Pressure can always be a killer and pressure comes from unrealistic expectations – expecting to make overnight fortunes, give up existing employment and so on. That in turn adds to the pressure to try and make money which in turn leads to the danger of trading emotionally which is a cast iron recipe for disaster.

Human beings are emotional in a way that machines, outside the realms of science fiction, never are. Various emotions can play dangerously with what ought to be your better judgement.

Let’s consider a few of them starting with greed. A greedy trader will never be satisfied and may miss out on profit by hanging on too long in the hope of earning more and more. Another example of greed is adding to trading just because the market is showing tiny gains.

Fear is another dangerous emotion, showing up in a new trader who is scared to get out there and trade or when they have traded and the market has treated them harshly.

The only remedy is to ensure that you never risk more money then you can emotionally and financially afford to lose.  The long term danger is that fear will inhibit the trader and cause him to miss out on good opportunities.

Another dangerous emotion for a market trader is the desire to “take revenge” on the market because of a previous loss that you have sustained. There are no sure fire winners in trading any more than on the racecourse and your push to make up previous losses may only lead to you losing more.

In many ways the psychology of market trading is that of everyday life. Imagine driving your car when paralysed with fear or rushing to overtake another motorist despite the danger.

Control your emotions and hope to profit from that control.

The Best Degree Majors for a Career in Finance


If you are good at math, enjoy working with numbers and have an interest in finance, you might be considering pursuing a career in the financial industry. Finance is an industry which offers a range of lucrative career opportunities, with plenty of high earning potential, job security, and opportunities for progression and career growth. For those who are applying to college and are hoping to work in finance when they graduate, there are many different degree courses to choose from that are suitable. If you’re stuck on deciding on a finance-related major, we’ve listed some popular choices.


If you’re interested in a career in finance, studying a finance degree is the most obvious option. Studying for a degree in finance can lead you into a whole range of jobs in the financial sector, whether you want to work with businesses, banking, or even in the stock and investment market. If you’re applying for an undergraduate degree in order to begin pursuing your career in finance, this is a great option to choose as it will give you an all-rounded view of the industry and prepare you for choosing a master’s degree or gaining an entry-level job in finance.


If you’re interested in financial analytics and want to pursue this field as a career, taking an analytics degree can be very beneficial. You can study analytics as an undergraduate course, however, for those who want to become financial analytics, it’s often more beneficial to take an undergraduate degree in finance or accounting, and then go on to study a postgraduate analytics degree, such as an online master of science in analytics. Many graduates choose to study for an MSA program online or part-time whilst working in an entry-level financial job in order to gain experience.


If tax and bookkeeping is something that interests you, you might be interested in pursuing a career as an accountant. Accountants work with business owners and managers, self-employed people, freelancers, and anybody else who has to pay their own taxes. Accountants are essential to the good financial running of a business and ensuring that tax is paid on time and complies with laws, regulations, and policies. As an accountant, you’ll be able to work on a self-employed basis, in a consultancy, or as part of an accountancy firm. There are different types of accounting degrees, but in order to become a Certified Public Accountant, you’ll need to at least get a bachelor’s degree in accounting, business administration, or finance. Math graduates might also want to pursue a career in this field.


For those who’re interested in the history and sociology of money and finance, as well as crunching the numbers, economics is an excellent choice of degree major or postgraduate degree course. Economists can enter the financial industry to find a wide range of different career opportunities, with the demand for economic analysts growing in almost every financial field.

Pursuing a career in the financial industry is a great way to ensure that you land a highly-paid job with lucrative career options. These degree courses are excellent choices for anybody hoping for a career in finance.

Immerse in The Law of Attraction Mindset

Immerse. If you want to create a financially free lifestyle, it’s important to immerse in the thoughts and mindset of those who have done what you seek to do and who are where you want to be.

If you want wealth, immerse in a wealth mindset. One of the best ways to do this is read and learn from those who’re wealthy and who understand how the law of attraction works. If it’s possible for others, it’s possible for you, but you have to place yourself in that flow of possibility thinking and a real world doing.

Here are two examples. One is an in-depth dive into my story. The other is in the infographic of quotes to chew on each day. Immerse and focus on your goal and you will arrive!



Understanding the Interest Rate Risk in Your Portfolio

interest rate riskInterest rates greatly affect many personal finance choices. From refinancing mortgages for more affordable payments to transferring credit card balances for faster payoffs; historically low interest rates are helping Americans improve their finances.

However, making investment decisions can be more difficult in a low interest rate economy.

It is important to understand the degree of interest rate risk in your portfolio and rebalance investments accordingly if needed.

While investment strategies run the gamut, most everyday investors own fixed income in the form of bonds, CDs or savings accounts.

Simply avoiding fixed income investments or taking excessive risks for yield can also be costly.

Below is a summary of interest rate riskand some tips to manage for it.

Interest Rate Risk:

When investors own bonds making lower interest payments than other fixed income of comparable credit, interest rate risk has been realized.

If you own a long maturity U.S. Treasury bond and higher yielding investments with good credit ratings become available, you have interest rate risk in your portfolio.

Bondholders may realize a loss if they decide to sell these low performing bonds for money to buy more attractive investments.

Low paying and illiquid certificates of deposits have little market risk, but have high opportunity costs if U.S. Treasuries or investment grade bonds with higher coupon rates become available.

CDs or other conservative investments may have a place in your portfolio, but the allocation should be based on an investor’s unique situation.

Current Economy:

Interest rates are at historic lows, making it unlikely that higher paying bonds will be issued in the near term.

Investment Managers such as Elliott Broidy have utilized various strategies to balance the risk and reward of low interest rates.

Bond investors who want higher yields may assume greater risk with lower rated debt or turn to fixed income choices in overseas markets.

If interest rates begin to rise, those holding bonds issued at low coupons may seek out higher paying alternatives.

Your Portfolio:

Do you know the potential impact of interest rate changes on your investments?

Are these risks acceptable to you?

Managing interest rate risk is not about market timing. Rather, it involves accepting potential risks based on your investment goals.

Chasing performance returns is ineffective, but periodic rebalancing of asset classes and investments is beneficial.

Fixed income investing involves several considerations that include your tax bracket, risk tolerance and time horizon, among others. Investors should first understand these factors to make more prudent decisions.

The Toyota Way: A Guide to Globalization

Welcome to the wonderful world of lean manufacturing and cost cutting initiatives, unfortunately this is here to stay as companies look to increase efficiency.  During my MBA program I took the course MGT 705-50 or Global Economic Climate for short.  One of the course objectives was to be able to evaluate a company that has been successful in going global.  Anyways here was the final assessment of the course we had to do a thorough analysis of a firm and its industry in terms of its actual and potential globalization, and the extent to which the firm’s competitors have global strategies.  Identify the major strategic groups and what the strategies of the firm should be.  We base this analysis on the concepts discussed in the course.

I chose to write a paper about Toyota, and come to find out after 35 pages later I learned a lot about the organization and its roots.  I am not going to take you through the analysis performed but if you would like to review the paper drop me an email and I can send it off to you.  The world is now our market place and we need to view it that way.  I have readers from all stretches of the globe reading what I publish.  To think that I only publish and only people from my small section of New York in the United States read it would be silly.  Companies need to look at the global landscape as well when they begin to offer products.

Toyota was one of the first companies to embrace the Kaizen model for continuous improvement.  This evolved into the Toyota way.  Kaizen was first implemented after the Second World War and has progressively spread throughout the world.  A similar type process was implemented at the organization that I work for, I work at a hospital and while not having direct care we are all caregivers.

The Five Elements of Kaizen are: Teamwork, personal discipline, morale improvement, quality, and suggestions to improve processes.  This method takes into consideration every person involved.  If a process is not working the process is reviewed with the necessary people and a suggestion for improvement is initiated.  All team members are looking for ways to improve operations.  The morale is improved because the lowest stakeholders feel they can impact process and operations.

The Toyota Production System model has been deployed all over the world and has been the subject of numerous case studies. The Kaizen approach has been one of the major contributors in helping the Toyota brand expand globally.

While I do not personally own a Toyota, I know a few that own them and also one who is a Toyota engineer.  What do you think of the Toyota brand?  Do you own one?  My global readers, what would you say the Toyota footprint is in your locale?

 Photo by: toyota uk

How Does My Korean Made TV Arrive in America?

led tv, old school tv, lcd tvChances are that nice television hanging in your entertainment room was not made in America.  During my MBA program I took some courses that focused on the globalization of the world economy.  There are many advantages to a global economy such as the free flow of capital and technology from one country to another helps with industrialization which in turn increases the global investment.

Pre shipment finance may have been used to bring that beautiful 52 inch LED Flat Panel to a store near me.  Sometimes the term may be referred to as packing credit.  A manufacturer of televisions may need working capital to meet the various expenses of the organization before the shipment of goods.  The working capital is provided by banks to the exporter prior to the shipment of goods.

Pre shipment financing may be used for any of the following:

-purchase of raw materials to produce or manufacture the goods.
-pay for packaging, labeling or marketing product
-storage facilities until goods are shipped.
-anything to do with the actual cost of shipment of the goods whether it be export documentation, freight charges, or customs.

Companies small and large use this type of financing from banks.  One of the caveats is that you and the companies that you do business with need to have good borrowing records with banks.  This is important as you are leveraging the contracts to provide your organization with working capital.

Has your organization ever done this type of arrangement or had any experience with any other type of financing to secure capital to ensure there is no disruption in your supply chain?

 Photo by: videocrab