You hear it over and over and over in books, forums, and chatrooms. Fear and greed, fear and greed, fear and greed. Emotions are a trader’s worst enemy. What are we supposed to do about it? We are human after all. Human beings have emotions. We can’t just throw a switch and suddenly behave like “Data” on Star Trek Next Generation.

So what’s answer for aspiring trader?

It all boils down to 2 main components:

1. Having a plan

2. Having an appropriate trading style

You hear first point often. Obnoxious little phrases like “Plan your trade, Trade your plan” are thrown around like it was really just that simple. But without second part, first part is useless. What good is a plan if you don’t know what type of plan is appropriate?

For example, you could plan your commute to work expecting to make 30 mile trip in 20 minutes, but if you’re on foot that plan isn’t going to work very well is it? The plan was simply not appropriate for you in that situation.

There are an unlimited number of possible trading methods and styles, from chart reading to fundamental analysis, cycles to Fibonacci retracements, intra-day, Dogs of DOW, Options, Futures, FOREX, Pork Bellies, Arbitrage – it can make you feel like your head will explode! But what you trade does not matter nearly as much as how, or perhaps why you trade.

Why do you trade?

Are you sort who likes to play video games, loves fast action, and has no problem being glued to a screen all day? Then maybe intra-day trading 1 and 5 minute charts of high volatility equity options is for you.

Rather check your trades maybe every few days, or maybe once a week? Then perhaps swing trading currency pairs is more your style.

Both look similar on surface; both are expressed in dollars and cents per hour. But they each represent something very different.

Wages are payment a worker receives for his labor.

Rates are payment a business receives for performing a serivce to a client. In addition to labor used in performing that service, rates must cover business's overhead.

Because of that, rates have to be higher than hourly wages earned by employees for comparable work.

Most newly self-employed workers are former employees. They are accustomed to receiving pay based on wages. Because they don't understand difference between rates and wages, when they start out, they tend to set their rates too low.

To survive, your rates must be high enough to pay bills and enable you to earn a living.

Some of differences between a self-employed person's rates and an employee's wages are explained below.

WAGES

• If you are a wage earner, you are due an hourly wage just by being present and willing to work at a set time, for period of time demanded by your employer.

Your wage is payment for your labor.

• The employer supplies necessary equipment and supplies for you to do work. And, employer supplies your workplace.

• You enjoy all of legal and social protections due to employees such as Unemployment Insurance, and employer paid Worker's Compensation Insurance.