Lesson: Replace FEAR and GREED to become a MASTER Trader

Good Morning! In today’s email/blog look for these three things:

1. An invite to the twice-weekly live trading Webinar,
2. A trading lesson about mental stability that is sure to change your life if you ‘get’ it, and
3. Links to two very brief videos that will entertain AND teach one of several ways to take a trade from low risk to NO risk.

Ready?

Today I’d like to chat a little bit about those two tiny gremlins that steal your money and wreck your trading…

FEAR and GREED.

Before we explore how to exterminate these little fellers forever, let me invite you to take a look at one short, 3 1/2 minute video. This video will not show the mechanics of “BULLETPROOFING” your stock… like my free Webinar held every Tuesday and Thursday at 12:00 noon EDT does… but it WILL show the effect that bulletproof trading has on your attitude.

Check out that vid here: http://www.youtube.com/watch?v=wDYXe9d6HEg

Now on to today’s lesson. You know these two inescapable facts already if you have been trading for ANY length of time…

You know that FEAR causes you to pull the trigger to soon or too late, and end you up with a losing trade.

You also know that GREED causes you to ignore warning signals and do trades that put too much AT RISK, in hopes of getting an outsized return. Result? Losing trades.

Actually, the very WORST thing that could happen is that your fear or your greed DOESN’T lead to losses right away… the worse thing that could happen is that the market actually goes your way just after a fearful or greedy decision… because that will reinforce the behavior… which you’ll then KEEP DOING…

… and will lead to your eventual ruin. Decisions made out of FEAR and GREED will eventually take you and your account down in flames.

Now, like I said… I’m not telling you anything new. If you’ve been trading for any length of time now… you KNOW this. Perhaps painfully well. What you may not know is how to conquer both fear and greed and use something else to win.

Ohh… I just gave you the key… USE SOMETHING ELSE to win.

Nature abhors a vacuum. Your mind abhors the absence of thought. You cannot erase greedy thoughts for long… they will return and ruin you. You can’t ignore fear and be reasonable… before long your irrational behavior will sink you.

Well, gosh durn it if I say you can’t ignore or erase fear and greed, what CAN you do?

Easy. REPLACE those thoughts.

I said easy… and I mean it… although, like any habit it will take time. You have to work at it, something only 2% of traders ever even know HOW to do… and fewer practice.

With what shall we replace these self destructive thoughts?

Well, FEAR is most easily replaced with a healthy curiosity. Instead of anxiously looking forward to what may or may not happen, we approach our trade with a sense of wonder, awe… and childlike expectation. Expectation of a lesson, nothing else.

This is easier when you trade RadioActively, because even if you are waaaaay wrong about the direction of a trade… if you put it together correctly in the first place you can only lose a maximum of 5-8% in that particular trade, and only 1% of your overall account.

Wow, it’s a lot easier to think clearly with 99 of your marbles still intact, hmm?

😉

So the lesson is not to erase, but replace. Fear is replaced with curiosity. And the best way to accomplish that is to use a structured trade only CAN lose a tiny amount, but can also win an unlimited amount. That is the unique situation that you enjoy with a married put arranged so that you can only lose single digit percents, but the upside is left open.

TODAY, after earnings, CREE will either swing sky high… maintain course… or crash crazily. I don’t care either way because of my situation, having a married put in place. The best part of this married put is that the cost basis of the stock and the put combined is a figure that’s LOWER THAN the strike price of the put. In other words, I have unlimited upside in case CREE bolts up, up, and away… but no fear at all. Just a healthy curiosity about what will happen next.

BTW, to take a look at the video in which I discuss the mechanics of WHY I am bulletproof with CREE, click here: http://www.youtube.com/watch?v=Sb771wmysbA

If I replace fear with curiosity, then with what shall I replace GREED?

Why, REASON of course.

Look, I’d love to expect CREE to double in the next few days following the earnings announcement, but that isn’t very likely to happen. If it does, bully for me, but I am set to get out shortly after earnings.

My GOAL is to get out with a double digit (10% or more) gain on my investment. If CREE shoots up to that level after earnings, I’ll bet out then, NOT hang on for more, more more. That’s how countless people have ended up watching a good trade turn around and go bad. Not that mine can go TOO bad, seeing as I’m bulletproof… but you know what I mean.

Listen, I’m getting out of CREE probably by Friday or sooner, whether it has a bump up or not. I may miss a big move, but I may also miss a retrace. It’s just… REASONABLE… to say that whatever big move CREE has in store, I should get out when it reaches 10% and never look back.

Of course, if the market says CREE is up 14%… well I’ll have to not argue and just settle for that.

😉

Okay, Here we go again with another webinar today at 12:00 noon EDT. I honestly don’t know what we’ll be covering today exactly, because with TEN Income Methods and scores of PowerPoint slides describing actual trades of mine… the content can be improvised on the fly according to the needs of the people present. Got a question you’ve always wanted to ask about limited risk, and NO RISK trading methods? Pose ’em to me LIVE. I’ll show you a current example of both winning and losing trades of mine, taken from the unedited archive of the last three years.

Okay, gotta go now. Check out those videos. And make sure that yours is…

Happy Trading!