Emotions, the worst thing a trader can have. No matter what literature you have read or what pros you chat with, the opinion on emotions is the same, they are the downfall of a good trader. One of the worst disadvantages of emotions is it creates a fear of getting involved in the market. As traders and investors, not being invested can harm you. One should never trade as if those dollars in your account are burning holes in your pockets, but one should trade. No matter which way you look at it, the truth of the matter is that money has to be invested to make money.
There was a time in when putting money in the bank or real estate could make a rich fellow richer. Those days are gone and with that, we see a new group of retail investors. Men and women that see the advantages of trading, see the big rewards that can be made, but at the same time see the catastrophes (look at those who pulled there money out of the market in the end of 2008). In more recent times just look at the downfall of Research In Motion and Netflix in the last year. We all fear of losing our precious capital, that is why we all have good money management practices (if you don’t feel free to email me and I will give you some).
I am not here to preach on the matters of diversification and good money management ideas. There are 100s of books and websites contributed to those ideals. What I am here to remind you is that if you follow good money management practices you can conquer emotions. You must follow the mantra that you must play to win. I see more often then not that the retail investor cannot make the right picks so they sit out of the market. The sit on the sidelines and watch other make money. Making the right picks is never easy, but you cant ever make the right picks if you don’t make any picks. I look at it this way, a trader does not have to be right 100% of the time, they just have to be right more then they are wrong.