Know Yourself!

In trading, it’s crucial you know yourself – your strengths and weaknesses.

Actually, you can gain a trading edge by knowing yourself.

Why?

You need to develop trading strategies that you are comfortable with and not copy someone else’s strategies. Moreover, how can you understand the markets if you don’t understand yourself?

A good starting point for any trader is to be honest to yourself and spend some time thinking about what kind of personality traits you have:

• Are you a risk-taker?
• Are you conservative and afraid of losing?
• Do you like action?
• Do you follow rules?
• Are you good with numbers?

As you will discover when you put real money on the line, you pretty soon discover how you react under stress. Nothing is as easy it seems on paper!

If you don’t know yourself very well, you’ll be liable to behavioral mistakes. Let’s explain this in the next lesson: