Jim Cramers Real Money Sane Investing In An Insane World

Your system must suit you, your psychological makeup, and the time you have available to administer it. Additionally, you need to believe in your system, and trust it, work with it, and refine it until it makes money for you. Without the patience, persistence, and discipline mentioned earlier, you'll never succeed as a futures trader.

OBSTACLES TO SUCCESS

This brings us full circle to the secret of success. It's not the "magic system" that reaps success in the markets. You need achievable objectives, a plan to reach those objectives, and a system in which you have faith—a system that matches your personality and helps you withstand the setbacks you'll experience on the way. Last of all, you must learn to conquer four major obstacles everyone faces— fear, pride, hope, and greed.

Rich Dad Poor Dad Robert Kiyosaki

The ancient Greeks would easily relate to how an intelligent, aggressive trader with a strong market position ends up taking a massive loss on that position. The Greeks coined a word for what often happens to otherwise skillful people: hubris. Its common definition is simply "overbearing pride." Be wary of the trader who says, "I know where the market is going!"

You'll often find the four witches of greed, pride, hope, and fear accompanying hubris. This foursome has brought more people who could have been successful in the market to their financial knees than just about anything else.

Why are these emotions so prevalent among traders, and why must they be minimized or reduced for the trader to be successful? The first part of the question is easy to answer. These emotions are simply human nature, and it is hard to separate human nature from any task.

The trader on a roller coaster of emotion is not a pretty sight. Take the trader who establishes a long position in crude oil futures. There really isn't a specific trading plan, other than just a feeling or hunch the market is going to rally.