When you truly learn how to trust your trade plans, follow the plan by managing the trade and measuring results in rate of return, you no longer have reason to fear the greed monster.
What does the greed monster look like?
When a trade is executed without a stop or a target, then there is no clear trade plan and the greed monster is in control. When you need to profit $1000 a week and only have $5000 principal to trade with, the greed monster is planning the business. When a trade goes against you and you start worrying about your loss instead of managing the rate of return, the greed monster is in the room. When you find yourself overtrading to make up a loss that could have been controlled with proper trade management, the greed monster is definitely in charge.
Why measure inrate of return instead of dollars? People work for dollars.Money works for rate of return. Just to gain some perspective here, let’s look at some statistics.
- Savings accounts at banks yield 0.01 – 2.00% apy
- Annuity’s yield up to 7% per year
- Bank CDs yield .030-2.80% per year
- Stock Market Index Average 7-8% per year
- Portfolio ROR vary between 10-12% per year after inflation
When you can make 2-3% per week trading a carefully laid out plan on high quality trades, why isn’t that good enough?
- Learn how to create a good trading plan and test that plan until you trust it to work.
- Identify quality trading candidates
- Learn good strategies and their rules and test them until you are confident you know how to use these rules.
- Manage your trades so your losses are small, and your winners are worth the effort.
- Always have your targets and stops in your trading plan before you ever enter the trade!
- Track your results in rate of return to keep the greed monster in its place.
- Join Power Option Plays to strengthen your trading skills and become the trader you have dreamed of.