YOU CHOOSE WHEN TO TRADE

You always have the final say in deciding when to enter or exit the market. This is an important advantage because you can trade when the probabilities are in your favor. You can wait when the market is in an uncertain condition, and then trade when the market presents opportunities. Equally important, you can decide to trade when you are mentally and physically at your best. In essence, you determine when and how to do battle, which is a valuable option.

YOU NEED ONLY RELY ON YOURSELF

Trading is a very private experience. You must make the decisions to buy or sell. Trading by consensus, or relying on others, is usually an excellent way to lose money quickly. You do not have to wait for other people to be ready, or hold meetings to get second opinions. You can act when you want to, and at the most appropriate time.
THE MARKET WILL BE THERE TOMORROW

Even if a great trade or big move was recently missed in the market, you must realize the market will be there tomorrow. There will eventually be another good trading opportunity in the same or another market. You always have a second chance, as long as you preserve your capital.

The Voyager mission, which explored some of our solar system, could only happen approximately every 200 years with our present technology because of the way the planets were configured. If the scientists missed this opportunity they would have to wait quite a long time for the next mission. However, as a trader, you only have to wait till tomorrow to get back in the game.

Although it is always helpful to look back and see how a strategy may have been improved, do not use retrospection to brood over missed opportunities. The market may not be forgiving, but it does provide the chance to try again.

Some exceptional trading opportunities occur infrequently such as the massive bull market in gold in 1979-1980, or the stock market crash in 1987. But do not think these moves were so easy to catch, and in any case there will be big moves in markets in the future.

FOCUSED ATTENTION

One of the great benefits of trading is that you only have to focus on the business of trading. You can marshal all your power and efforts into becoming a more successful trader, instead of being distracted by other considerations such as fame or credibility. The market may be severe in dealing with ignorance and bad trading, but at least it is open minded about trading ideas.

NO OUTSIDE PRESSURE

You do not have to face deadlines or the pressure of getting something done for an outside group. Of course, there is internal pressure, but that can be varied by reducing your position size and learning to live with the stress of trading.

COST TO ENTER IS LOW

All that is required for trading is an initial sum of money and a brokerage house to execute your orders. Sophisticated and expensive equipment is available to enhance your trading, but do not be misled into thinking that more expensive equipment will guarantee profits. Trading still comes down to understanding human nature, and some better traders have made money simply watching the market and developing a feel for it.

INFORMATION ACCESS

The amount of data and information available to the trader is staggering. The problem with data analysis is generally not in accessing, but in filtering out what is important or irrelevant. The analyst must focus specifically on what is needed and perform the studies. Much of the data is readily available, except for some fundamental information which may either be kept secret or sometimes used in misleading ways.
INDIVIDUAL VERSUS THE CROWD

The market is a reflection of peoples' expectations-their hopes, dreams, and fears. It is a fascinating display of the psychological and sociological forces of humanity. The market measures, in a coldly analytical way, the degree of optimism and pessimism of people, and so it is an excellent barometer of how people feel about the world and themselves.

Many people are frightened by the markets because they fear there are so many intelligent whiz kids using high powered computers that make them superior in analyzing the market. How can a novice investor expect to win when there are experienced traders who have access to secret or confidential information, and know when and where the market is going?

Since markets may at times be driven by the mass of investors, then it possesses a mind of its own. Gustave LeBon studied crowd psychology and noted that the mind of a crowd often reflects the behavior of the lowest common denominator in the crowd. Therefore, crowds do not often exhibit highly intelligent behavior, which can be an important advantage when trading.

You are not competing against an individual, but a composite of people and ideas which exhibits crowd mentality. How could there be any advantage of one person against an entire crowd of people? Isn't a crowd so much more powerful than an individual? Yes and no. If, as an individual, you plan to do physical battle against a crowd, you will most likely fail. This analogy is similar to one person or a group of people trying to manipulate or control the market; ultimately they will be unsuccessful. But you should not choose to fight the crowd on this battlefield.

A crowd can be very dangerous but it is not necessarily smart. An idea, on the other hand, can be a powerful force ,too. The individual has the power of thought but the crowd does not, and there is the tremendous advantage. The market represents the mass of peoples' ideas or crowd mentality, and not the individual's thoughts. Therefore, you have an advantage in trying to beat the crowd on a mental level instead of a physical level.

CREATE A STRATEGY AND TEST IT