Today's Quote: “Once the last trace of emotion has been eradicated, nothing remains of thought but absolute tautology.” Theodor Wiesengrund Adorno.

As many of you know, the psychological aspects of trading are very important. It is a very powerful influence in most people. It is a topic written about often, and is frequently a topic right here in the Daily Trading Letter. Something we should all remember is that whatever the topic, it is often the case that some of the best answers come right from the book “Tools and Tactics for the Master Day Trader”, written by Oliver L. Velez. It is well advised to read several books, but this one should be at the top of your list. What is second on the list? Read ‘Tools and Tactics’ a second time…

It is a well balanced book that covers many important topics others fail to talk about. So what about psychology? Some of the ‘Tools and Tactics’ psychology is covered in a chapter called the Seven Deadly Sins of Trading. This chapter starts on page 91, and that is a page number you should all know by heart; you should not need to look at the book to know that page number. The comments here are timeless as they deal with human emotion, which has not changed in centuries and most likely will not change anytime soon.

New traders seldom appreciate the importance of this chapter until they suffer problems that are only cured by understanding the sins. More experienced traders need to keep returning to learn how to rid or ‘re-rid’ themselves of the problems caused by the deadly sins. It is not my purpose to review the material with you. You can do that. The purpose is to remind you to stay balanced in your education. At all the expos, the latest software and technical items have people standing in lines to view. The guy talking about psychology has very few interested. Yet most would likely benefit more from a good review of how you handle trades and what your trading plan looks like, which are all psychological issues. If you always seem to ‘have the right ideas’ but the money isn’t making its way to the account like you want to see, take a glance at the chapter on The Seven Deadly Sins, you will likely find your answer there.