No matter what we do, mentality is very important, especially for our investment.
The investment community has a saying, good people may not be able to invest well, but the person who invests well must be a good person.
A real trader has to confront one's greed, desires and fears. For most investors, especially beginners, can easily be affected by market fluctuations.
When a person's emotions are overcomed by rational, the opportunity to make a wrong decision will be greatly increased. The person who failed the deal ended up losing to oneself, not to the quotation.
As the Zen six ancestral Hui can say: "Neither the wind nor the streamers move, only the heart moves." "Likewise, it is not the" quotation "that is moving, only your" heart " is moving.
To have good psychological quality, we need to achieve the following six points: 1. objective; 2. rational; 3. decisive; 4. self-discipline; 5. motivation and 6. relax.
These six investment psychology quality can be said to be six levels, but also can be said to be one six side. It corresponds with the Dharma "Six Degrees" (Generosity, Abstinence, Humiliation, Diligence, Meditation, Wisdom).
Before we talk about objective, let's talk about what is not objective.
In the investment market, we can often see such examples. For example, someone who hears rumors, or feels the market is about to rise, or even based on some of the analytical methods which have not been validated, view optimistic about a particular stock; or by pure luck, but found that prices went down and tied up once purchased was made.
The so-called objective, is according to the true nature of things to observe without prejudice, subjective conjecture and one's feeling. Firstly, one must need to have in in-depth understanding of own limitations to avoid the plight caused by overconfidence. Secondly, it is necessary to look at all things scientifically, according to a set of scientific methods.
The scientific characteristic is: the same method with the same result performed by different people.
Similar as computer calculation, the success rate will not vary. In other words, it has statistical stability and objectivity, so as to avoid a relatively large amount of uncertainty incurred by personal judgements.
Also, one ought to respect the facts and avoid "selective memory" (selective Memory)-- only remember what you believe but not the truth. Such as fortune telling, there are one or two aspects that one thinks are very spiritual and ignore those are not, which is against the objective principle.
Similarly, if one uses some analytical method to guide the operation, but in the long run is a loss of money, only to show that this method is not feasible. The final outcome would be the same if the next time it merely brought surprise, without speculation and back to credulity.