The 90/10 Principle - Applied to trading

Discover the 90/10 Principle. What is this principle about?10 of life is made up of what happens to you. 90 of life is decided by how you react. What does this mean?We really have no control over 10 of what happens to us. In trading, we may have done all our homework - studying charts, looking at historical data, establishing support/resistant level before determining that the stock is headed up. However, for reasons unknown, it keeps headed south. We have no control over this 10. The other 90 is different. You determine the other 90. How?By your reaction. You cannot influence the stock price, but you can control your reaction towards it. Let's illustrate with an example.You are sitting in front of your monitor. You have just done all your pre-market scans, and is very confident that XYZ stock is going to gap up. You place a market order to buy before the opening bell, and BAM! The stock gaps down 10 shortly after opening, triggering your mental stop loss level. What happens next will be determined by how you react. You curse and swear. You blame market makers and big players of influencing the stock price. You nervously watch the stock the entire day and it dips lower and lower. Before the end of the day, frustration takes over and you sell the stock at a big loss. You spend the rest of the day in a semi-stupor.Why did you have a bad day?A) Did the money makers cause it?B) Did the institutional players cause it?C) Did you cause it?The answer is " C".You had no control over what happened with the stock price. How you reacted in those 5 seconds is what caused your bad day.Here is what could have and should have happened.The stock gaps down to your stop loss level. You calmly exit the trade as set forth in your exit strategy. You spend the rest of the day reviewing the trade as to what caused the gap downwards. You learn valuable lessons and gain further insights towards your trading system. You go to sleep, knowing losses are a part of trading and that tomorrow might be a better day.Notice the difference?Two different scenarios. Both started the same. Both ended different.Why? Because of how you REACTED.You really do not have any control over 10 of what happens. The other 90 was determined by your reaction.Why get stressed out? It will just make things worse. Now you know the 90-10 principle. Apply it and you will be amazed at the results. You will lose nothing if you try it.The 90-10 principle is incredible. Very few know and apply this principle. The result? Millions of people are suffering from undeserved stress, trials, problems and heartache. There never seem to be a success in life.Bad days follow bad days.Terrible things seem to be constantly happening. There is constant stress, lack of joy, and broken relationships. Worry consumes time. Anger breaks friendships and life seems dreary and is not enjoyed to the fullest. Friends are lost. Life is a bore and often seems cruel. Does this describe you? If so, do not be discouraged..You can be different!Understand and apply the 90/10 principle.It can change your life.

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