• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Locke In Your Success

Locke In Your Success

Learn how to create income from options trading

  • Home
    • About
    • Testimonials
    • Our Team
      • Sherri Locke
      • Stephen Hammit
      • John Locke
    • Contact
    • Privacy Policy
  • Coaching
    • Fundamentals In Trading Library
    • Options Trading for Income Weekly Webinar
    • GO Ask A Trader Sessions
    • Trading With The Pros
    • Trading Performance Sessions
    • Market Outlook Weekly Webinars
    • Personal Coaching Sessions
  • Become A Member
    • GO Membership
    • PRO Membership
    • Trading Performance Membership
    • Market Outlook Membership
    • Basic Membership
    • Membership Level Comparison
    • Trade Alert Services
  • Trading Courses
    • Options Trading Strategies
      • The Bull
      • Quick & Dirty Broken Wing Butterfly
      • The Super Bull
      • The Bear
      • Unbalanced Butterfly 1 and 2
      • M3.4u
      • V32
      • X4 System
      • Bearish Butterfly
      • M3
      • The ROCK
      • M21 System
    • Trading Performance Courses
      • Advanced Personal and Position Management
      • Broken Wing Butterfly Master Course
      • The Trading Triangle
      • Trader Transformation Workshop
      • Ultimate Income Trader Workshop
      • How To Best Utilize Calendar Spreads
    • Enriching Sessions
      • Performance Parking Portfolio
      • Boost Trading Results Through Proper Back Testing
      • Managing Risk When Entering, Exiting, or Rolling Positions
      • Far Out M3
      • How To Build Winning Trade Plans
      • Reading Your T+0 Line
      • Trading Lab – Design a Trade
      • Trading Lab – M3LT
      • ROCK’in 2018
      • Trading Lab – Roll Baby Roll Index
  • FREE Resources
    • Free Options Trading Consultation
    • Options Trading FAQ
    • Trading Performance Podcast
    • The Winning Trade
    • Successful Trader Presentations
    • TRADING SUCCESS BLUEPRINT
    • FREE Basic Membership
    • Calendar
    • Recommended Reading List
    • Brokerage Firm Selection Process
    • Fundamentals In Trading Definitions
    • Trader Inspiration
    • Financial Freedom Classroom
  • Blog
  • Log In

Making Good Trading Decisions Interview

June 19, 2020 by John Locke Leave a Comment

Making Good Trading Decisions Interview with John Locke hosted by Sylvia's Traders Lounge

A huge thank you to Sylvia’s Traders Lounge for inviting me for the making good trading decisions interview. I am very grateful for the opportunity and really enjoyed sharing this important topic with her, her crew, and her listeners. And now, I’m excited to share this full length interview with all of you in episode 23 of the Trading Performance Podcast! Click here or in the video below to discover in detail how to make good trading decisions!

Click here to join the mailing list to receive each Trading Performance Podcast by email. Don’t miss an episode!

When making a trading decision there are many factors that should be considered to make a good one. To start there needs to be an understanding of what determines the marketable price of the asset you are trading which boils down to what people are willing to pay for it and what people are willing sell it for.

How do we determine what a good price is? It begins with looking at the most basic motivational factors of all human behavior which is known as the motivational triad. It consists of these human tendencies:

Making Good Trading Decisions Interview with John Locke hosted by Sylvia's Traders Lounge
  1. To avoid pain
  2. To seek pleasure
  3. To conserve energy

These three human tendencies are why most people find themselves unconsciously looking for the Holy Grail trade or the magic trading strategy or the magic indicator where they can make money without an over abundance of work or have to risk being wrong.

As a result, traders will often chase these Holy Grail indicators and strategies even when trader intellectually knows they don’t exist.

The prospect of making a lot of money is associated with intense pleasure and the prospect of losing money is associated with intense pain.

This being the case when traders see an asset going up they’ll typically associate that with the asset continuing to go up because of recency bias, and that being the case, they see an opportunity to make money and they feel compelled to enter the position or stay in an existing position. You can call it greed or the fear of missing out but either way the emotion prompts people to react to it. When that happens this is going to drive prices much higher than they should be and create a market that is too expensive.

On the flip side once the asset price starts to  drop, and as the pain of losses are increasing, traders often get scared, not so much of the loss itself but rather the meaning that they’ve applied to the anticipation of the potential loss. At that point our natural tendency is to avoid that pain at all costs by either panicking out of the position, or by holding and desperately hoping the position will come back.

The market makers know all about these tendencies and use them all the time.

Do you ever feel like someone is watching you trade and knows what you are doing when you trade? Most traders would answer yes. That is the market makers taking advantage of the herd mentality.

Break out from the herd and use this in-depth interview about making good trading decisions to learn strategies to improve your trading performance.

Locke In Your Success · Making Good Trading Decisions Interview
Share on Facebook
Facebook
Tweet about this on Twitter
Twitter
Share on LinkedIn
Linkedin
Pin on Pinterest
Pinterest
Email this to someone
email

Filed Under: Trading Performance Podcast, Trading Psychology Tagged With: psychology, psychologyoftrading, traderperformance, traderpsychology, tradingmindfully, tradingmindset, tradingpsychology

Reader Interactions

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Recent Posts

  • Trading Edge Unsteady? Let’s Fix It!
  • The Winning Trade Episode 86
  • Break Free By Understanding Market Conditions
  • The Winning Trade Episode 85
  • 3 Essential Trading Elements

Categories

Search

Copyright © 2022 · Locke In Your Success, LLC. All rights reserved worldwide · Site Maintained by Nustart Solutions