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Benefits of Mindfulness in Trading

  
  Education
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Mindfulness in trading can be of significant benefit to traders.  Mindful trading will positively impact traders and their trading in a number of ways:

  • Reduce loss aversion
  • Mitigate the disposition effect (i.e., cutting winning trades short and letting losing trades run)
  • Help traders get into “the zone”
  • Reduce the negative effects of cognitive biases and heuristics on trading decisions
  • Directly reduce stress
  • Help traders see the market more clearly
  • Increase awareness of the trader’s internal state and how it impacts their trading
  • Increased ability to maintain focus on the market and the trading task at hand while trading, even when emotions are running hot
  • Increase internal emotional regulation
  • Other positive effects on trading and trading behavior

Your Trading Method-10 Points

  
  Education
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 1.“Trade What’s Happening…Not What You Think Is Gonna Happen.” – Doug Gregory
2.    Go long strength; sell weakness short in your time frame.
3.    Find your edge over other traders.
4.    Your trading system must be built on quantifiable facts not opinions.
5.    Trade the chart not the news.
6.    A robust trading system must either be designed to have a large winning percentage of trades or big wins and small losses.
7.    Only take trades that have a skewed risk reward in your favor.
8.    The answer to the question, “What’s the trend?” is the question, “What’s your timeframe?” – Richard Weissman. Trade primarily in the direction that a market is trending in on your time frame until the end when it bends.
9.    Only take real entries that have an edge, avoid being caught up in the meaningless noise.
10.    Place your stop losses outside the range of noise so you are only stopped out when you are likely wrong.

The 7 rules of Managing Risk

  
  Education
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1.)Overcome fearRisk Management

2.) Remain flexible – When you don’t know what’s going to happen, the best strategy is to be ready for anything.

3.) Take reasoned risks – reasonable exposure and positive edges only.

A Reasoned risk is more like an educated guess rather than a roll of the dice.  A Reasoned risk limits exposure so that one or a few trades will not affect the trader’s account too adversely should the trades turn out badly.  Great traders aren’t gamblers.

4.) Prepare to be wrong

5.) Actively seek reality

6.) Respond quickly to change – When a trader determined a place to get out of the trade, a competent trader will respond quickly and get out, thereby reducing his exposure to continued uncertainty to zero.

7.) Focus on decisions, not outcomes.

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