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Trading The Stock Market

Stock market commentary, analysis, insight and opinion of the RightLine Editors is available every Tuesday/Thursday evening & Saturday afternoon. The following is excerpted from the:

December 1, 2020 - The RightLine Report

Notes From The Editor

Thomas Sutton, EditorSuccessful traders consistently view the market as it is instead how they might prefer it to be. As a result they take appropriate actions, which in turn produce consistent profits. From this standpoint it's easy to see that trading results are directly linked to our ability to view the market correctly.

I'm using the term "market" to depict both the larger market made up of all trading taking place on the major exchanges, AND the individual trades that we have positions in at any time.

When we perceive the market accurately, we can use the information we get from our observations to define and use methods that give us a trading advantage. So how do we see the market "accurately"?

Our perception is actually our interpretation of our observations. Our interpretation is dramatically influenced by our individual beliefs, expectations and values. This means that when our beliefs and thoughts are relatively free from false assumptions and similar thinking errors, our interpretation of the market is more accurate. The more clearly we view the market, the easier it is to define and use profitable methods for trading the market consistently.

Here are a few key beliefs held by most successful traders:

- No matter what happens, the market is always correct and price is where it should be.

- Market price indicates the combined psychological states of all market participants at that time.

- The market will always go wherever it wants to, and usually proceeds in an unexpected manner.

- Traders are responsible for their own beliefs and actions, including the risks they take.

- Losses are an important part of trading. They provide feedback about a trader's ability to manage risk and engage emotions objectively.

Also ... many traders find it difficult to accept losses because of how it feels. Keep in mind that negative emotions are associated with personality programs that were formed during traumatic experiences.

Instead of rejecting these parts of ourselves, we can empower them by respectful acceptance. Respond to any negative feelings with positive thoughts and patience. Doing this reduces anxiety, increases self-respect, and promotes healthy thinking patterns in an effective and practical way.

Trade well!

- Thomas Sutton, Editor

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