Have you ever experienced a losing streak which ultimately depleted your confidence in trading the markets? There is also a similar situation that is as dreadful. It is when you experience a winning streak that ultimately makes you overoptimistic.
The Superman Syndrome enables you to feel like an eternal being thinking that the trader possesses a tremendous control over their next trades. The trader starts to execute setups that are not in conjunction with their trading system. As if the market participant deems that their future trades would be mostly right. The trader feels that they can bear with the extra losses as they have gained a significant hedge through their previous gains. The Superman Syndrome enables impulsive decision making through overtrading rather than being in Zen through being selective in their stock selection.
It is also as bad as feeling lost and being diffident on your next trades. Thinking ahead that their next trades will be losers. An individual would find it difficult to execute a trade given the bias that is circling in their head. Being too defensive will hinder an individual from amassing the full potential embedded in the financial markets.
Having confidence in trading is a key aspect to achieve success in the financial markets. However, a market participant should not be reluctant nor conceited when it comes to their trading psychology.
It is best to take a breather whenever you score huge gains and winning streaks to reset your urges. This also applies when your money is on the drain after a losing streak. As they say, trading is 80% psychology and 20% methodical.
Being in Zen while being free from external negative energies that could disrupt your trading is a non-negotiable aspect of this endeavor. Being in this type of state enables the trader to stay in the flow. Traders who are at peace tend to make themselves available on the endless streams of opportunity that the market is offering at any given moment.
Possessing the urge to revenge trade or to trade impulsively due to the Superman Syndrome must be treated instantly. The same goes with being hesitant due to losing streaks. It pains to be in an emotional rollercoaster while pursuing this type of endeavor. As they say, you attract what you are.
To learn more about trading psychology, I highly suggest reading the book called “Trading in the Zone” by Mark Douglas. It is a trading psychology book that will enable you to master the market with the proper discipline, confidence, and attitude.
Investagrams has helped thousands of Filipinos all over the world on their stock market journey. Now, we’re aiming to help thousands more! Follow us on InvestaDaily for investing tips and stock market advice to help you reach your first million.