1. When you first startedtrading, you wereworried that the transaction wouldmake a loss. To avoid this you should stop loss immediately,once each transaction losses up to 5% of the total capital you invested.
2. With stop-loss strategy, you won'thave to worry about making loss, but instead you should worry about you couldn'tmake profits by trading. Because after you continuedto stop losses for about seven or eight times, your original capitalwouldalso suffer a lot.
To solve thisproblem, you should improve the success rate of trading, that's say you couldfind the critical turning point of the volatility. This is the core of all technical analyses. Though each person has different method, his/hersuccess rate will behigher if his/her is good at catching turning points.
3. If you improved the success rate of trading, then you don't worry about continuous stop-loss. Instead you startedworrying about your profits. The cost of a stop-loss strategy is higher than the theoretical calculation, so if the profit is not enough to cover the loss, or if the profit is small, you couldn'tbe sure whetheryou can make a long-term profit. If you couldcatch the big fluctuationsand enlarge your profits, then the small stop loss couldn't hurt much.
4. Learn to wait. After seizingsome opportunities among big fluctuations, you were afraid that during the waiting period, your profits will be eroded.
These loss-making transactions not only affectedthe mood, but also were a waste of time, having negative impact on the overall effectiveness of investing.
Countermeasures: when the profitableposition fell back near thebuying price, sell it.
5. You avoided some transactions to lose, while you also missed opportunities becasue of trying to keep balance. Therefore, you started to researchstop loss points, as well as to identify conditions when you could wait longer even if the profits turned to loss.
6. Most specific problems solved, the next worryfor you was about the efficiency and durability of your trading methods/frames. You could check your methods through simulated trading whether your implementation will be disturbed by markets.
7. You finally have formed a stable investing operation system. The total investing performances are positive and you don't take one single trading result seriously, being confident in your overall investing strategies.
But there will bestill new problems, oneworry is that once the nature of the market has changed, resulting in stock changes, the system suddenly failed to work.
To this problem, there is no sure measure but to respect the market, maintain the fear toward the market, stay alert to any changes and be prepared to adjust your methods/strategiesall the time.
The above mentioned are only the psychological barriers caused by the technical problems whileestablishing a systematic trading method. In actual operation, the closer you stay with the market, the more factors will impact your trading. Therefore, keeping proper distance from markets will helps you keep in a good mind.