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Expanding Your Comfort Zone in Trading

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If you're timid due to a lack of confidence, read on.

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Dr. Brett Steenbarger at TraderFeed explains that sometimes anxiety points to our growth:

We're all most comfortable with what lies within our comfort zones, of course. Once we leave the comfort zone, we experience anxiety and uncertainty.

But we cannot grow if we forever stay in comfort. We need a high enough coefficient of experience to ensure that we'll be anxious...always stretching ourselves a bit farther than comes easily or naturally.

So often traders look to me to reduce their anxiety.

But sometimes the best strategy is to follow your anxiety and take that ride beyond the comfort zone.


Dr. Brett's advice is sound, and it's directed at timid traders (timid and conservative aren't synonymous).

It doesn't apply to option traders who are holding risky positions. The discomfort that results from too much risk is a warning to be heeded. If your position has moved beyond the boundaries of your zone, please take prudent action and re-enter the zone.

If you're a timid trader who never wants to lose money -- or at least lose as little as possible as seldom as possible -- then this advice isn't for you either.

But if you're timid due to a lack of confidence, pay attention. No one is suggesting that you move from trading one-lots to trading 20, but you can move to 2-lots.

Please understand: This assumes you have the education and experience to become a bit more aggressive. It doesn't mean "full steam ahead" when you're not confident that you understand what you're doing.

If you sell put spreads that are very FOTM (delta of short is 3-4) that's not only timid, it's a poor strategy when the premium is very small. Consider taking baby steps (delta 6). If you manage that position well, you'll earn more money. If that baby step makes you uncomfortable, then try a smaller baby step.

One more reminder: The good doctor's advice is for traders, not investors. It's directly targeted to day traders. But if you're interested in getting more involved with the markets (and its inherent risk), this advice is applicable to you.

If you're looking to invest with ETFs, take a FREE 14 day trial to Minyanville's Grail ETF & Equity Investor newsletter by Ron Coby & Denny Lamson as they provide strategies across numerous sectors using ETFs and find early trend changes. Learn more.

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No positions in stocks mentioned.

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