What are the best ways to keep your emotions out of investing?

Emotionally shaken traders are worthless as traders. Don’t put yourself in a position to take a large loss. Never compromise discipline.

Have 3 things absolutely clear in your head before doing a trade:

1.Why are you making the trade.
2.Where are you going to get out on the profit side?
3.Where are you going to get out on the loss side?

Develop conviction.
The market has little room for arrogance or ego.
Avoid holding positions over weekends.
Scared money never wins.
Size the trade.
Avoid chaotic stocks, like penny stocks
Do the research.
Forget about chat rooms.
No clarity, no trade.
Day trade the ranges and swing trade the trends.
Don’t make it rocket science, ‘cause it ain’t.
Know thyself.
Inspect what you expect.
Update and review weekly.
Don’t lie to your spouse or significant other.
Be humble and admit mistakes.
Never let emotions control you.
Avoid stock tips.
Never take home a loser.
Learn to lose.
Make trading a habit.
Never let your attitude suffer.
The market is always right.
Average winners, not losers
Never let a winner turn into a loser.
Take profits often.
Never mix disciplines. If you open a day trade, close a day trade.
Never try to trade back a loser. Don’t fight the tape.

Get a mentor or trading coach.

Develop a Trading Plan.
Entry Price, Price Target, the max I’m willing to lose, the time frame, the size of the position, and the date of any reports on the news.

Create a written plan. A plan is composed of two primary parts:
1.The blueprint is a preliminary action plan developed before trading begins. Review the plan every few weeks. It is a living document that evolves over time. I always revise my plan for the summer trading season since summertime market conditions call for different strategies.

2.The Journal is a day-to-day microadjustment of the blueprint. This is the document that requires you to adhere to your plan. Emotional aspects of trading on a daily basis are written in here. Questions such as
·Did I follow my blueprint today?
·Did I maintain discipline?
·Did I do the research required?
·Did I recognize support and resistance levels through volume?
·Was my methodology correct?

Ask these questions and answer in your journal. These represent intangible issues that technology cannot capture through a database. If you did the right thing and still lost money, make a note of that. If you did the wrong thing, make a note of that. Other questions should also be answered:
·What was my strategy (earnings play, split, momentum, etc.)?
·Did I exit on fear or logic?
·Did I do the right thing, and do I feel good about my decision?
·Would I make the same trade again in the same situation?
·Did I have confirming indicators when entering the trade?
·Was my discipline followed? Why or why not?

Writing stimulates thought. When you put your plan on paper, it somehow becomes more real than it is when it is just in your mind. Things may seem fine, but in black and white it seems unrealistic or improbable. Nothing is more expensive to a trader than trying to make something happen that is unrealistic.
Another important reason for the plan: you cannot deny it. If the plan says not to hold postions overnight, and you do anyway, you realize you have violated your own discipline. When the plan is only in your mind, it is easy to rationalize it away, and your discipline erodes like the sands of a beach.

The plan is a way to keep score, rather than just a P&L. Many more factors play into the process than just money. Emotions, accountability, responsibility, focus, and creative thought all get brought into the dynamics of trading versus a one-dimensional fixation on monetary gain.

Never discuss an open trade with anyone else; it fixates your bias in cement. And if you need approval or want to follow on the coattails of others, like most sheep, then just invest in a mutual fund and be done with it. (Note: this does not say that MF investors are sheep; read the statement again. If you are a follower, there is no need to put yourself through the rigors of trading).

Writing down what these motivations and components are for you, while tracking your adherence to them each day, through your journal, increases exponentially the likelihood that you will achieve your desired result, without going nutzo in the process.

Never hope that a trade will go your way; never fear that a trade will not go your way. Both attitudes lead to unrealistic expectations, emotionally inspired decisions, and negative attitudes. A trade, once established, will result in whatever market action prevails.

Once the trade has been made, its fate is sealed and no amount of hope or fear will make things different. Hope and fear are two of the greatest enemies of the trader, fostering only false perceptions. You must avoid these feelings at all costs. If your system says to trade, then do so. It is a simple, logical business decision, and if it goes against you, it is a simple cost of doing business.

Discipline is the soul of an army. It makes small numbers formidable; procures success to the weak, and esteem to all. – George Washington

Try to determine your time horizon. Short-term, long-term?

Realize right away there are two sides to the market, not just the upside. Not only can you short the weak ones while you go long the stronger ones, what goes up, eventually comes down at least part way. This is not a business of prediction, but rather knowing what to do if certain price points are reached, say at Support or Resistance levels, or Fibonacci retracement levels, or if a breakout to new highs or lows occurs.

Learn how to analyze risk, and make this your primary approach. We are not in the business of analyzing an unfounded theory of compounding profits and erroneously analyzing how much money you can make. For example, most traders don't make any money at all; more than 80% blow out.

Learn about money management techniques, and maybe you'll stick around awhile.