Archives of “January 9, 2019” day

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An Inspiring Poem for Traders

  
  Education

 

If you think you are beaten, you are;

If you think you dare not, you don’t.

If you’d like to win, but think you can’t

It’s almost certain you won’t.

If you think you’ll lose, you’ve lost.

For out in the world we find

Success begins with a fellow’s will:

It’s all in the state of mind. 

If you think you’re outclassed, you are:

You’ve got to think high to rise,

You’ve got to be sure of yourself before

You can ever win a prize.

Life’s battles don’t always go

To the stronger or faster man,

But sooner or later the man who wins

Is the man who thinks he can.

How to Trade Through the Pain

  
  Education
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10 painful aspects of trading and what to do about them.

  1. The pain of losing money. (Trade smaller so it is not as painful, it is just an outcome not an emotion).

  2. The pain of being wrong about a trade you were sure about. (You lost simply because the market didn’t match your trade, trend followers lose money in choppy markets, swing traders lose money in trending markets, it’s the market not you. As long as you followed your own plan.)
  3. The pain of a draw down in capital.
  4. Consecutive trading losses hurt. They make you doubt yourself, your method, and your system. (You need to remember your winning trades, your winning years, or your back-testing, or paper trading of the method. You have to keep the faith or get with a method you have faith in).
  5. The embarrassment of public losses. You told everyone who would listen about a great trade you were taking and you were wrong. Social media has given us all the ability to embarrass ourselves anytime we want. (Never be overconfident in any trade, but always be sure of your stop loss.)
  6. The pain of of admitting you were wrong. (Cut your loss and move on to the next trade, trade reality not your ego.)
  7. Losing paper profits, you are up 20% on a trade then a massive whip saw takes back those profits in one move. (Take your trailing stop and move on to the next trade, there is truly no reason to cry over spilled milk.)
  8. You are following a guru and come to realize he truly is a salesman not a trader. (You stop following gurus and look to learn how to trade for yourself using a method and a trading plan).
  9. You buy a super hot stock that you have researched for many weeks then it goes down due to a bear market. (Only trade stocks long in up-trending markets)

  10. You start trading a system that did amazing in back-testing and promptly lose 10% of your account. (You have to stick with it so it can win in the long term, you may need to make slight adjustments in position sizing or stops to account for volatility that you may have missed.)

What are these elements of planning? 6 Questions

  
  Education
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1) What you’re trading – Why are you selecting one instrument to trade (one stock, one index) versus others? Which instruments maximize reward relative to risk?

2) How much you’re trading – How much of your capital are you going to allocate to the trade idea versus other ideas?
3) Why you’re trading – What is the rationale for the trade? Why does the trade idea provide you with an “edge”?
4) What will take you out of the trade – What would lead you to determine that your trade idea is wrong? What would tell you that the trade has reached its profit potential?
5) Where you will enter the trade – Given the criteria that would take you out of the trade, where will you execute your idea to maximize the reward you’ll obtain relative to the risk you’ll be taking?
6) How you will manage the trade – What would have to happen to convince you to add to the trade, scale out of it, and/or tighten your stop loss?

Day Trading Starting Out

  
  Education
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1• Don’t Mixing up Apples and Oranges
2• Don’t’ Winning 7 trades and LOSING ALL Gains on the Next 3 trades
3• When PREMISES FAIL, EXIT TRADE
4• 70% Consistency = 7 out of 10 trades
5• Be BORED = APATHY = EMOTIONAL DETACHMENT
6• DON’T WORRY ABOUT MAKING MONEY
7• Pauses in your Trading. Putting oneself into a position where defeat is impossible.
8• Determine Your STYLE
9• Stops based on type of Trade and Premises
10• Expect to make mistakes
12• Volume is KEY
13• Those who can recognize PATTERNS and Keep an OPEN Mind Will Succeed Faster – The ability to ADAPT – The Ability to REACT – The Ability to Admit Defeat Cut Losses Fast

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