Archives of “February 2019” month

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3 Trading Myths

  
  Education
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Risk/reward is set in concrete. Nothing in trading, with the exception of the process, is set in stone. I have seen that stone sink many peoples trading careers. Risk/reward is as much of a filtering process as it is risk management. We look at market in terms of volatility, it keeps us out of slow times but it can dry up quickly. If it does we get out before the “reward”. If we see it expanding and everything lines up we will get out after the “reward”. We are always adjusting to the situation.

Every market move is a reason to trade. There are so many opportunities that there is no reason to create one. Once again, this is where the selection process comes in play. Staying on the sidelines is a trade. Being able to separate what happened from how you felt is important and makes it easier. Missing a move is part of being a trader, you can get over it now or later.

Traders take big risks. Bad traders take big risks. The difference between a retail and a professional is the professional trades bigger taking the same risk as the retail trader. That is in part because a professional sees more of the market and is flexible. They understand what they are comfortable risking and never get beyond that point with very limited exceptions. You cannot run away from the risk, it always reverts to the mean. But what you did before and when it does revert is the difference between profitable and unprofitable traders.

12 Quotes From ‘Trading In The Zone

  
  Education
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I spent hours reading and re-reading this book, and eventually made a summary of all the key quotes.  In a series of posts I’ll be sharing these quotes with you, and hopefully they will inspire you to take your trading to the next level.  I hope you enjoy my first selections:    
1.  You will need to learn how to adjust your attitudes and beliefs about trading in such a way that you can trade without the slightest bit of fear, but at the same time keep a framework in place that does not allow you to become reckless.
2. Trading is an activity that offers the individual unlimited freedom of creative expression.
3. The unlimited characteristics of the trading environment require that we act with some degree of restraint and self-control, at least if we want to create some measure of consistent success.
4. The hard reality of trading is that, if you want to create consistency, you have to start from the premise that no matter what the outcome, you are completely responsible.
5. One of the principal reasons so many successful people have failed miserably at trading is that their success is partly attributable to their superior ability to manipulate and control the social environment, to respond to what they want.  (Unfortunately) the market doesn’t respond to control and manipulation (unless you’re a very large trader).
6. The tools you will use to create this new version of yourself are your willingness and desire to learn, fuelled by your passion to be successful.  Successful traders have virtually eliminated the effects of fear and recklessness from their trading.
7. Attitude produces better overall results than analysis or technique. (more…)

7 Principles for Traders

  
Analysis, Education

First Principle: Find Your “Why?”
“The reason most people go through life with big dreams but fail to achieve them is because they ask themselves “how” before they know their “why”
Second Principle: Get To Know Yourself
“The perfect trader-if such a person exists-is methodical and careful about making decisions, extremely disciplined, resilient to setbacks, with a high degree of internal confidence.  He holds strong opinions but is also able to admit quickly when he is wrong, not take it personally, and view it as a learning opportunity rather than a failure.  He understands the value of leaving his ego at the door.  He’s willing and able to trust his gut and place big bets when the opportunity presents itself.  In fact, that pretty well describes the ideal blend of characteristics of any successful person, no matter what he is doing professionally or personally”
Third Principle:  Learn To Love The Process
“The best traders don’t think about how many millions they need to make each year.  They focus on making the best trading decision they can with each trade they make. And if there isn’t a good trading opportunity right now, they have the discipline to do nothing and just wait. Concentrating on one trade at a time is their process”
Fourth Principle:  Sharpen Your Edge
“Gaining a competitive advantage is like having a two-edged sword, and you need to keep both of them sharp.  On edge is internal-knowing what unique skills you bring to the table.  The other is external and comes from gathering knowledge that makes it more likely you’ll succeed”
Fifth Principle:  Be All That You Can Be
“The takeaway lesson for everyone wanting to optimize their own performance without regard for what others are doing is fourfold: 1) know your edge; 2) act only when you have the edge; 3) avoid taking the outcome personally because it involves factors that are beyond your control; 4) measure your success in terms of how well you performed and not only the outcome”
Sixth Principle: Keep Your Cool
“Deciding when to cut your losses is one of the toughest decisions for anyone to make, but traders at the top of their game know that they always have to make the decisions they need to make, which may or may not be the ones they want to make”
Seventh Principle: Get Comfortable With Being Uncomfortable
“In the trading world, you will either make money or lose money on any given trade. All that matters in the end is making more money when you’re right than you lose when you’re wrong.  Knowing this, traders have learned to accept failure as part of the game, but they also use the information they acquire from their mistakes as a learning tool.  Frequently, what they learn from losing money is more valuable than what they learn when they make money”
Eighth Principle: Make Yourself Accountable
“Commitment, perseverance, and discipline are the characteristics that move people beyond desire to action, that differentiate mediocrity from greatness, and that separate greatness from superstardom”
And to sum up: “True success begins with a state of mind.  But it takes specific actions and behaviors to move from intentions into action and get results”

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