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The Most Powerful Trader in the World

  
  Education
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Once you’ve mastered putting in protective stops, you’ll feel empowered. Why? Because at that point you are emotionally balanced and are WILLING to transfer the risk to someone else and exit with a small loss. You have emotional and financial understanding that trading is a process and that any one trade is meaningless over 1,000s of trades.

At that point you have personal power in that trading is just one part of your day and your life is abundant. And you don’t need to tell anyone about your trading. You’re in love with your process – be it mechanical or discretionary – and not in love with any one particular trade.

At that point, you’ll also realize that you can’t really speak to anyone about trading anymore. Most amateurs don’t understand that trading like a professional requires a combination of self-awareness, emotional intelligence, and some level of technical proficiency.

You won’t be able to communicate with such a person as they are speaking one language and you another. They are ignorant about your expertise and necessary behavior. It’s a dialect all its own and it’s unique to you and only you.

This ability is learned behavior – but most will never achieve this level because they are focused on the wrong principles. They’re missing the 80% of the puzzle that is most significant.

Are you a discretionary trader?

  
  Education
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How would you be able to tell?  Here is a quiz that will help you decide.  Answer Yes or No to the following questions.

  1. Do you sometimes buy newsletter recommendations without having a real plan for how you’ll get out of the trade?
  2. Do you occasionally (or often) take trades based upon some interesting indicator that you learned in a workshop (i.e., when you see that indicator go, you usually get into a trade, but again you have no real plan about how you’ll get out of the trade)?
  3. Do you trade three or more different systems in the same account?
  4. Do you trade more than ten different systems?
  5. Do you sometimes enter a trade and later not remember why?
  6. Are you unsure of how many systems you have?
  7. Do most of your systems lack a complete set of rules to guide your behavior?
  8. Are your systems equivalent to the setups used to get into the trades and nothing more?
  9. Are you unable to list the rules for the last trade you made?
  10. Are you able to list the rules for any of the last five trades you made?

If you answered Yes to as many as two of the questions above, you have some elements of a no-rules discretionary trader. However, if you answered Yes to 6 or more questions above, you definitely are a no-rules discretionary trader.

Chances are you seldom make money in the market because you are not playing a winning game. You probably make many mistakes. In fact, since you don’t have rules, I would consider everything you do to be a mistake until you have a set of rules in place.  How can you effectively learn from any of your trading experiences if you do not know which ones are mistakes? (more…)

Accept Responsibility For Your Actions!

  
  Education
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accept1Whether you win or lose, you are responsible for your own results. Even if you lost on your broker’s tip, an advisory service recommendation, or a bad signal from the system you bought, you are responsible because you made the decision to listen and act. I have never met a successful trader who blamed others for his losses.

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