Home > Money Management > MONEY MANAGEMENT TIP #5: KEEP PLENTY OF CHIPS IN YOUR TRAY!

MONEY MANAGEMENT TIP #5: KEEP PLENTY OF CHIPS IN YOUR TRAY!

November 7th, 2011

KEEP PLENTY OF CHIPS IN YOUR TRAY: Realize that the more you have invested in the market, the more pressure you will naturally feel. To lessen the impact of this phenomenon, make sure that your trading account cash level is as much or greater than the dollar amount you have invested in the market.

This simple discipline will help you feel less fearful and more clear-minded about holding your present investment positions. The main reason for doing this is that it’s nearly impossible to play the stock market correctly when negative emotions such as fear, doubt, and worry are clouding your ability to think clearly.

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Note: This also means that the more you have in your cash reserves, the less pressure you will feel while you’re trading. This allows you to buy and sell without undue pressure. The caveat is that having a lot of money in reserve may make a player lose their mental discipline.

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