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Investment Buzz. What Is It And How Do You Deal With It?

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February 25, 2011 0 comments

Investment Buzz is a term I have come up with to explain a state of mind that I get in whenever I discover a new trading idea or strategy. It’s that feeling you get when you discover something new, and it’s all you can think about. There’s been so many times when I’ve lay awake at night because I can’t turn off my brain and my excitement. When I first discovered options trading, I was so amazed that I stayed up until 4 in the morning and finished the book I was reading which was just on basic options strategies. Over the last 7 years, I can’t tell you how many times this same thing has happened, but it’s a lot! This is what I call the “Investment Buzz”. You’re heart pumps, your brain won’t stop ticking, and all you want to do is get online and start trading right away. Perhaps you’ve been there yourself and know what I’m talking about?

Do you know the funny thing about Investment Buzz though? As great as it is to be excited about something new and increasing your investment knowledge, the majority of times I’ve had this feeling, it has led to losing trades. I’ve jumped in head first and started trading straight away without doing my due diligence. I didn’t do the proper research and testing of the new strategy. I didn’t set appropriate trading rules.

So, how do we deal with Investment Buzz when it strikes? For the last year or so, I have set myself a rule. Whenever I feel the Investment Buzz building up, I say to myself “I know this is Investment Buzz I’m feeling, so I will not trade this strategy for 2 weeks. I will do my due diligence and research the strategy properly before jumping in.” Sometimes I even paper trade the strategy for a month just so I can get a better feel for how it works.

So, my advice to you if you’ve even found yourself in this situation. If you feel your Investment Buzz building up, set yourself a rule of not trading the strategy for 2 weeks. Try and resist the urge, trust me it won’t be easy! But, I guarantee you will be better off and your trading will improve as a result.

Let me know in the comments section, if you’ve ever felt Investment Buzz and what your experiences have been.

Happy trading!

Options Trading 101 - The Ultimate Beginners Guide To Options

Download The 12,000 Word Guide

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