Page 474 - THE MARKET WHISPERER

470 PART 14 - The Demons Are Coming!

and selling at a low), they feel they have done good business by getting
out of the stock which was causing losses and may continue doing so. In
both cases, each side is convinced it is smart and the other side is stupid.
So which side is smarter? Traders sometimes think they are buying stocks
from a machine that does nothing but fulfill their requirements. Perhaps
they think that if the word “wall” is part of the name Wall Street, they’re
playing squash against themselves. And this is their big mistake. On Wall
Street, traders play “tennis.” On the other side of the trade is an investor,
an intraday trader, a market maker and a specialist, all of whom want to
take as much of your money as they can lay their hands on. These are not
colleagues but bitter, cruel foes, and they are not interested in captives.

Keeping in mind that on both sides of the trade are flesh and blood
humans like yourself, driven by fear and greed, will help you keep the
upper hand and attain successful trades. Look at the chart of a stock that is
crashing. Can you hear the pain?

And Know, Too, Thy Home-Grown Foe!

A common question at job interviews is, “What are your drawbacks?”

The typical response is usually one that evades presenting a negative

character trait, and instead takes a positive one to an extreme: “I am a bit

too thorough.”
Intraday trading is a business just like any other. You are your own CEO.

Interview yourself for the job and ask yourself, “What is my drawback?”

Answer honestly, without evasion, without prettying anything up, because

your answer will have tremendously important influence on your trading
ability. Are you impulsive? Do you handle pressure well? Can you take loss?
Are you covetous?

SMART The trader’s biggest enemy is… him- or herself!
MONEY

The Rules of Psychological Conduct

Most of the time we live in denial. When we make severe errors we need

to admit it, and when we are in a tight psychological place, it’s very hard

to admit any error. Denying our state causes greater losses or makes us
realize profits too early. One of the ways to cope with denial is to identify
the existence of the denial mechanism and process which bring us to