Resume the Rally!!

The absolutely amazing Great Rally of 2013 is back on track. It seems like every single dip, however small, draws in buyers. This really does make me want to do some self reflection here as I grapple with my own disbelief at ever climbing prices.

So, let me step back from options education just for a bit and talk about the psychology of trading. Even at the risk of being a little Pop Psych or touchy-feely.

That old axiom, Know Thyself, is vital for anyone who hopes to succeed as a trader. Firstly, one must conquer those twin enemies of every trader or investor: Greed and Fear. Greed takes the form of either hanging on too long or buying too much while Fear takes the form of selling too soon and hesitating too long to buy. Myself, as a person I've always had more fear then greed. Avarice really isn't in my make-up, whereas I am often afraid. Which leads to this further self-disclosure...

I am a Bear. I usually think that  the market is going lower, that a Bad Moon is Rising and we are living on top of a most precarious house of cards. I've paid for this many times, missed many rallies (including this one) because I find it very easy to sell and very difficult to buy.

That doesn't make me a bad trader as long as I am aware of my bias and try as best as I can not to let that influence my trading decisions. So, Know Thyself. A good amount of self-awareness goes a long way towards making one a successful trader as well as, come to think of it, a successful human being.