Archives of “February 2019” month

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Richard Dennis – Market Wizard (Must Read )

  
  Education
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On the right psychological mindset:

For a lot of traders, it doesn’t matter so much whether their first big trade is successful or not, but whether their first big profit is on the long or short side. Those people tend to be perennial bulls or bears, and that is very bad. Both sides have to be equally OK. There can’t be anything psychologically more satisfying about one than the other. If there is, your trading is going to go askew.

On taking losses:

Since then, I have learned that when you have a destabilizing loss, get out, go home, take a nap, do something, but put a little time between that and your next decision. When you are getting beat to death, get your head out of the mixer. Looking back, I realized that if I had had a trading rule about losses, I wouldn’t have had that traumatic experience.

 

You mentioned that before you developed a mechanical trading system, you paid close attention to the trading process. Did you keep a log of what you did right and wrong, or was it a matter of memory?

Yes, I would write down observations and think about them. I thought about everything I was doing.

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Winning Traders -Never Quit

  
  Education
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1. They accept losing trades quickly but it does not define them, they learn and try again. This trade more wise than the last one.
2. They compartmentalize emotions by not blaming themselves but understanding the historical expectancy of their systems returns. 
3. They have a bias toward action by constantly doing things that move them closer to their goal of being a rich trader. (Homework, chart study, reading, being mentored, back testing)
4. They change their minds sometimes, they know when to stop doing something that does not work and move in the direction of trading success through new lessons. 
5. They prepare for things to go wrong through risk management an position sizing  instead of just going naively toward their goals they are ready to make adjustments as needed.
6. They’re comfortable with discomfort, they will accept losses and draw downs in their method, they are willing to pay tuition to the markets to get to where they want to be.
7. They’re willing to wait, they patiently improve each day setting themselves up for those winning trades that will be very profitable in the future.
8. They have trading heroes that inspire them to be better than they are now and give them the hope of achieving their dreams.
9. They have more than passion they are on a mission, their desire for success gives them the drive to not quit until they win.
10. They know only time separates them from their goals of wealth.
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