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Introspective analysis is one of the most important traits for any trader. How can you nurture this quality?
Any trader or investor working on the market is faced with many problems and challenges that aren’t easily resolved through simple methods and approaches. There is a short list of factors, including greed, gambles, psychological pressure, hope, and ingenuity, that influence a trader’s effectiveness and ability to produce results. For these reasons, many private market participants often lose their funds, rather than generating their desired profit. The only way to resolve such situations is to maintain self-control and analyze your own market activity. It is on this question specifically today that we have gathered a wide array of materials aimed at uncovering several secrets to effective self-restraint, so as to enable traders to improve their trading results.
So, before delving into self-analysis, it is necessary to go through the most common problems encountered by private investors. As the list of factors that have an impact on success is relatively long, we will only go through the main ones:
● The choice of trading partner – The majority of online traders, irrespective of their direction of trading or which trading tool they use, don’t think too much about their choice of trading platform. More often still, investors choose the platforms that aggressively promote themselves online. During this process, private traders pay little attention to aspects such as the security and technical resources of the service. Amidst the increasing number of frauds, the question of security plays a very important role and, of course, the technical tools necessary for market analysis help you achieve success on the market. As a result, investors, having chosen to partner with the first platform they came across, put themselves under far from ideal trading conditions, as well as the vast array of related psychological problems that arise when trading, leading to negative results.
● The choice of trading tool – These days the market offers a wide variety of different kinds of exchange contracts, such as classic futures, options, online CDF tools and several short-term over-the-counter crypto options made from standard trading tools. Despite the wide range of trading tools, investors find it difficult to understand which resource will be most profitable and effective for them specifically. There are various ways to generate profit from trading tools and the inexperience of the vast majority of online traders limits their ability to access the full potential of trading contracts. This is why, more often than not, the success of a trader depends on the correct choice of trading tool.
● An effective trading system. For every investor, the trading strategy followed is more important than the technical tool used. Despite the fact that most traders consider strategy as the selection of a specialized approach and method for market analysis and the identification of rate movement vectors, this investment tool involves a wider range of questions along with a deeper level of understanding. In this case, special attention should not only be paid to the system’s ability to correctly identify possible market movement, but also to issues such as money management, the best timing for conducting trading operations, the most lucrative assets and an entire array of technical and even psychological aspects of working on the financial market. Therefore, choosing the right strategy is one of the most fundamental factors for how effective a trader’s activity on the market is. Furthermore, most private traders’ choices of strategy are rather strange, as the vast majority of investors don’t even try to create their own system. Individualized systems are more effective and draw from adopted strategies.
Undoubtedly, certain systems, especially the most well-known, are very effective, but only if you have a complete understanding of how they work. In practice, this results in private investors who frequently choose strategies without evaluating them first hand, instead relying on third-party conclusions that are typically found in system descriptions. These investors lose their funds as a result of adopting a strategy without first testing it on the market and thoroughly analyzing it.
The technical trading factors outlined above have the most influence on traders’ results. Now, let’s go a bit into the psychology behind it.
The overwhelming majority of well-known traders consider the psychological aspects of working on the market to be more important than the technical trading tools themselves. We won’t bombard you with difficult psychological terminology and complex concepts. Instead, we will give you examples of several mistakes that investors often succumb to when trading on the financial market:
● A lack of emotional discipline – Financial activity on free markets, especially online, is a very risky way to earn profit. It is worth noting here that while the vast majority of traders aren’t professionals, they do have easy access to credit and the opportunity to work with highly-profitable trading tools. This combination in particular creates the majority of emotional and psychological problems. In general, investors lose funds when working with maximum leverage. Where funds are lost due to minimal asset price movement and a risky gamble. This is why it is so important to maintain a psychologically and emotionally balanced outlook when trading online. It is worth pointing out the interesting fact that this equilibrium in particular is the primary factor that influences a trader’s success in terms of psychology. What do we mean by this? It’s simple. When working with assets, you can be too careful when forming trading positions. Such a psychological regime can produce negative indicators! When traders are overly careful, they are too emotional. This leads to a mindset that keeps traders from seeing profitable conditions for trading. At the same time, trading thoughtlessly leads to losing control of the situation and concrete negative trading indicators. Therefore, successful traders strive to find an emotional equilibrium, control without paranoia and consistent analysis of the situation.
● Inefficient restraint – Successful traders aren’t susceptible to mood swings, meaning that their work isn’t compromised by emotional outbursts either when they profit greatly, or when they experience a loss. This mentality leads to achievement thanks to a realistic understanding of their own psychological and emotional shortcomings. Every successful trader knows their own faults and has an entire list of approaches for suppressing critical emotions. Online investors can take the following simple approach. When forming a trade, regardless of your emotional state, take a break. Even if it leads to a loss, either way, it is more likely to lead to profit if you take the break!
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● Identify the strong and stable sides of your own psychology – Traders usually fail to take advantage of their own talents and psychological strengths in their work. For example, for one person, it may produce better results to trade on the expectation of profit in the medium-term, however, for another, it may generate better results to hold losing positions in the hopes that there will be a trend reversal. By choosing the best regime based on your own psychological strengths, you create the most effective conditions for trading, which can become the basis for creating a technical strategy. Other than that, you gain the opportunity to most effectively maintain your profitable contracts and generate the most capital growth possible from them. At the same time, you can easily limit capital loss from losing positions at the level best suited to you. As a result, your emotions won’t threaten your psyche, and trading will only bring you financial results, along with satisfaction.
● Overconfidence, one of the primary enemies of any investor! The problem can be divided into two parts. The first is the activity of inexperienced traders without any specialized education or basic understanding of trading. So, newcomers to trading typically start out hoping that they can just guess the vectors of market trends. We’ll tell you right now, that isn’t possible. Of course a certain number of the contracts will be profitable, however, you won’t be able to generate profit stably. Don’t allow yourself to get overly confident, invest a significant amount of time educating yourself on the main principles and approaches to trading. The second part of the problem is the activity of professional traders! Every professional reaches a point when they start to think that they know the market through and through and they can do absolutely anything, this type of ego is even more dangerous! The saying that even the best swimmers drown comes to mind. When applying this to trading, it is worth pointing out that professional investors with their vast experience and financial successes, due to their own egos, begin to violate their own rules for money management, ignoring trading strategy signals and their psychological mentality when working on the market. As a result, they lose significant capital!
● An imbalanced relation to trading positions – It is relatively specific factor caused by the inner-consciousness of every individual trader. The issue is that investors more consciously and effectively consider larger contracts, but when it comes to smaller trading positions they can be completely thoughtless. Of course, it isn’t difficult to lose a contract for $10 or $100 dollars when you are operating on the market with an account with a great many zeros. But that is what the statistics show. Smaller contracts pose a greater threat to investors’ capital than larger ones! Therefore it is important to consider smaller positions as deeply as larger ones. There is no such thing as an insignificant trading position on the market!
As you can see, the technical aspects of working with financial assets, as well as an investor’s psychological outlook, are the main indicators of trading success. Therefore introspective analysis is the key to the success of any online trader.
How do you learn to analyze yourself?
The primary form of introspective analysis in trading is a trader’s trading plan! Specifically, a plan with clear-cut steps and signals leads to success. It is worth taking the time to highlight the most important points of a trader’s plan, they are the following:
● Identifying the factors that influence the capital curve
Today, it is easier than ever for online investors to maintain a trading diary and create a trading plan. The internet offers specialized resources that enable you to create a plan in real time without the need to invest too much of your own time. Don’t ignore it, see for yourself how much more effectively you can trade.
Other than a trading plan, it is vital that through introspective analysis you resolve the psychological problems that we previously touched upon. We’ll conclude with the primary ways of nurturing introspective analysis:
● Forming a clear trading plan with clearly-defined indicators and goals that you adhere to regardless of the circumstance
● Creating the most effective technical trading conditions
● Expanding your professional skills
● Choosing a psychologically and emotionally ideal trading regime, so as to more accurately identify your own strengths and weaknesses. Thus increasing your advantage on the market and ridding yourself of destructive emotions
● Remain humble and don’t gamble, trading isn’t a game, it is a serious analytical endeavor!
Once you have begun to introspectively analyze yourself and you have gained the self-awareness to effectively evaluate your own shortcomings, you can form your own ideal model for working on the market that will without a doubt drive you to the peaks of financial success!
“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”
The Age Old Debate of Nature vs. Nurture
Steven Gans, MD is board-certified in psychiatry and is an active supervisor, teacher, and mentor at Massachusetts General Hospital.
Verywell / Joshua Seong
The nature versus nurture debate is one of the oldest philosophical issues within psychology. So what exactly is it all about?
- Nature refers to all of the genes and hereditary factors that influence who we are—from our physical appearance to our personality characteristics.
- Nurture refers to all the environmental variables that impact who we are, including our early childhood experiences, how we were raised, our social relationships, and our surrounding culture.
Even today, different branches of psychology often take a one versus the other approach. For example, biological psychology tends to stress the importance of genetics and biological influences. Behaviorism, on the other hand, focuses on the impact that the environment has on behavior.
In the past, debates over the relative contributions of nature versus nurture often took a very one-sided approach, with one side arguing that nature played the most important role and the other side suggesting that it was nurture that was the most significant. Today, most experts recognize that both factors play a critical role. Not only that, but they also realize that nature and nurture interact in important ways all throughout life.
A Closer Look at the Nature vs. Nurture Debate
Do genetic or environmental factors have a greater influence on your behavior? Do inherited traits or life experiences play a greater role in shaping your personality? The nature versus nurture debate is one of the oldest issues in psychology. The debate centers on the relative contributions of genetic inheritance and environmental factors to human development.
Some philosophers such as Plato and Descartes suggested that certain things are inborn, or that they occur naturally regardless of environmental influences. Nativists take the position that all or most behaviors and characteristics are the results of inheritance.
Advocates of this point of view believe that all of our characteristics and behaviors are the result of evolution. Genetic traits handed down from parents influence the individual differences that make each person unique.
Other well-known thinkers such as John Locke believed in what is known as tabula rasa, which suggests that the mind begins as a blank slate. According to this notion, everything that we are and all of our knowledge is determined by our experience.
Empiricists take the position that all or most behaviors and characteristics result from learning. Behaviorism is a good example of a theory rooted in empiricism. The behaviorists believe that all actions and behaviors are the results of conditioning. Theorists such as John B. Watson believed that people could be trained to do and become anything, regardless of their genetic background.
Examples of Nature vs. Nurture
For example, when a person achieves tremendous academic success, did they do so because they are genetically predisposed to be successful or is it a result of an enriched environment? If a man abuses his wife and kids, is it because he was born with violent tendencies or is it something he learned by observing his own parent’s behavior?
A few examples of biologically determined characteristics (nature) include certain genetic diseases, eye color, hair color, and skin color. Other things like life expectancy and height have a strong biological component, but they are also influenced by environmental factors and lifestyle.
An example of a nativist theory within psychology is Chomsky’s concept of a language acquisition device (or LAD). According to this theory, all children are born with an instinctive mental capacity that allows them to both learn and produce language.
Some characteristics are tied to environmental influences. How a person behaves can be linked to influences such as parenting styles and learned experiences. For example, a child might learn through observation and reinforcement to say ‘please’ and ‘thank you.’ Another child might learn to behave aggressively by observing older children engage in violent behavior on the playground.
One example of an empiricist theory within psychology is Albert Bandura’s social learning theory. According to the theory, people learn by observing the behavior of others. In his famous Bobo doll experiment, Bandura demonstrated that children could learn aggressive behaviors simply by observing another person acting aggressively.
Even today, research in psychology often tends to emphasize one influence over the other. In biopsychology, for example, researchers conduct studies exploring how neurotransmitters influence behavior, which emphasizes the nature side of the debate. In social psychology, researchers might conduct studies looking at how things such as peer pressure and social media influence behaviors, stressing the importance of nurture.
How Nature and Nurture Interact
What researchers do know is that the interaction between heredity and environment is often the most important factor of all. Kevin Davies of PBS’s Nova described one fascinating example of this phenomenon.
Perfect pitch is the ability to detect the pitch of a musical tone without any reference. Researchers have found that this ability tends to run in families and believe that it might be tied to a single gene. However, they’ve also discovered that possessing the gene alone is not enough to develop this ability. Instead, musical training during early childhood is necessary to allow this inherited ability to manifest itself.
Height is another example of a trait that is influenced by nature and nurture interaction. A child might come from a family where everyone is tall, and he may have inherited these genes for height. However, if he grows up in a deprived environment where he does not receive proper nourishment, he might never attain the height he might have had he grown up in a healthier environment.
Contemporary Views of Nature vs. Nurture
Throughout the history of psychology, however, this debate has continued to stir up controversy. Eugenics, for example, was a movement heavily influenced by the nativist approach. Psychologist Francis Galton, a cousin of the naturalist Charles Darwin, coined both the terms nature versus nurture and eugenics and believed that intelligence was the result of genetics. Galton believed that intelligent individuals should be encouraged to marry and have many children, while less intelligent individuals should be discouraged from reproducing.
Today, the majority of experts believe that both nature and nurture influence behavior and development. However, the issue still rages on in many areas such as in the debate on the origins of homosexuality and influences on intelligence. While few people take the extreme nativist or radical empiricist approach, researchers and experts still debate the degree to which biology and environment influence behavior.
Increasingly, people are beginning to realize that asking how much heredity or environment influence a particular trait is not the right approach. The reality is that there is not a simple way to disentangle the multitude of forces that exist. These influences include genetic factors that interact with one another, environmental factors that interact such as social experiences and overall culture, as well as how both hereditary and environmental influences intermingle. Instead, many researchers today are interested in seeing how genes modulate environmental influences and vice versa.
Importance of SWOT Analysis
Advantages & Disadvantages of SWOT Analysis
A SWOT analysis is one of the most important strategic tools available to a company, division or department. The acronym SWOT stands for strengths, weaknesses, opportunities and threats. The significance of SWOT analysis is that it provides a good way for companies to examine both positive and negative attributes within a single analysis, determining how best to compete in the market at large.
The Meaning of SWOT Analysis
SWOT analysis is an in-depth look at exactly how a company operates. It examines the strengths of the company, acknowledges its weak points and identifies both opportunities and threats in its market. These are all useful pieces of information that in most cases will help a company or department to succeed. In conducting a SWOT analysis, a company evaluates its current position in the market and compares it to the future opportunities and risks that could affect it moving forward.
Providing a Simple Value
Simplicity and a broad perspective are two core traits that combine to make a SWOT analysis so important in strategic planning. It can be a simple tool to use because the process involves listing all items in each category in a spreadsheet or table. Depending on who is performing the analysis, it is common to involve business or division leaders, regular employees and even clients. The broad perspective stems from the fact that you identify everything that makes your company successful, but also your areas of vulnerability.
Looking to the Future
What really makes SWOT powerful is its usefulness in setting a course to take advantage of prime business opportunities. Without a strategic plan, companies can just aimlessly drift around without a strategic direction, or operate without development. In highly competitive industries, failing to seize openings is almost as catastrophic as making a major mistake. If a new customer segment emerges due to shifts in preferences, for instance, it is often a race to see which company best serves the need first.
SWOT allows you to map out this possible opportunity well in advance, and begin planning to deliver a quality solution and marketing plan before the opening hits.
Self-Preservation and Protection
Though it isn’t always pleasant to scrutinize your weaknesses or deficiencies, top companies know where they stand in all critical areas relative to the competition. Walmart is renowned for its low-price leadership in discount retail, for example, but company leaders likely recognize criticism of its limited customer services. With some weaknesses, you have opportunities to improve. With strategic limitations tied to its low-price strategy, the goal for Walmart is more to downplay the weakness, target customers who prefer low prices, and promote that core benefit.
Threats are another key SWOT element in guarding against risks. Companies that don’t use a planning tool like SWOT may be caught off guard when threats emerge. In contrast, effective use of SWOT helps a business adjust or prepare for pending threats. Some businesses wait until a recession slows revenue, for instance, while others recognize the potential for recession in advance, alter promote strategies and trim budgets. Other potential threats identified through SWOT include shifting customer preferences, technological changes and environmental concerns.
Why Is SWOT Analysis Important?
Performing a SWOT analysis helps companies to recognize both threats and opportunities that they need to be aware of. There are many benefits of SWOT analysis in healthcare, for example, where recognizing both the dangers and opportunities present can result in safer and more productive care of patients. By undergoing SWOT analysis, companies can better compete in their industries while passing on benefits such as lower costs and higher quality service to their customers.
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