Amateur & Professional

The true mark of an amateur trader who is never going to make it in this business is one who continually blames everything but his or herself for the outcome of a bad trade. This includes, but is not limited to, saying things like:
1. The analysts are crooks.
2. The market makers were fishing for stops.
3. I was on the phone and it collapsed on me.
4. My neighbor gave me a bad tip.
5. The message boards caused this one to pump and dump.
6. The specialists are playing games.
The mark of a professional, however, sounds like this: 

•It is my fault. I traded this position too large for my account size.
•It is my fault. I didn’t stick to my own risk parameters.
•It is my fault. I allowed my emotions to dictate my trades.
•It is my fault. I was not disciplined in my trades.
•It is my fault. I knew there was a risk in holding this trade into earnings, and I didn’t fully comprehend them when I took this trade. Continue reading »

6 Effective Ways to Trading Success

1.  Identify if you really want to be a trader. Is this truly your desire?

Before you can develop persistence and eventually achieve success in the tough trading game, you need to first identify if this is truly what you want to do. If you are only doing this for the money then the odds of you making it through the learning process is very slim. You have to be ‘foolish’ enough through your initial losses to believe that you can rise to the top 10% of profitable traders. Most traders learning curves are measured in years not weeks so trading is more like getting a degree than reading a book over the weekend.

2. Determine your motivation. Why do you want to be a trader?

Motivation comes from a deep reason why we want to achieve or have something.  If you know why you’re doing what you’re doing, it gives you more energy to keep moving forward in learning and getting experience. If you are trading to make a quick buck, then you do not make that buck quickly you will join the quitters. If you are trading to have enough money to pay off your house in 5 years that will create the energy to drive you forward against the odds.

You can get through this first learning stage by writing down specifically all the things you want to have or accomplish through your trading.  List all your desires and wants, all the rewards that will come through you not quitting the trading game. This is what will get you through if your heart is in it. You need a very big bucket of carrots waiting for you on the other side of trading success to get through the whips the market will hit you with while you are learning.

3. Outline Your Definite Action Step

Identifying your wants or desires speaks of what you want to achieve.  Determining your motivation shows the reasons why you want to achieve what you want.  Outlining your definite action step is necessary to know howyou will be able to achieve what you want.

When you know how to get what you want, it makes it easier to achieve it.  To know how, it pays to do some research and planning of what needs to be done on your part.  Be specific on each step you need to take.  Identify at least two ways and plans on how you can achieve your goals.

4. Keep the right mindset, believe that you are going to be a winning trader. Continue reading »

Truth

“Truth kills those that run from it “-Persian proverb

Traders must be able to face the truth.Great traders have learned these lessons early in their careers.Roy Longstreet in his classic book view points of a Commodity Trader started that “the first mistake teaches -then second mistake kills !”

Facing the truth in trading is necessary to prevant the consequences.Truth is necessary at all levels of trading.It is just as important to the novice as it is to the  seasoned veteran.The main difference lies in the ability to face the truth.

Truth seems so somple !But the psyche can do amazing tricks through rationalization.Some of these tricks seen to have no other purpose  then to prevent you from seeing the reality of the truth.The Bible states -“The truth shall set you free “Every religion has a saying echoing the same theme.Overcoming not facing  the truth can be accomplished by writing down the pros and cons of telling the truth.Once it is committed to paper the decision should become self-evident.

The Ten Trading Commandments

1) Trade for success not for money.

2) Strive for discipline.

3) Know yourself and how well you handle risk.

4) Lose your ego.

5) Know your risk level and when you hit your stop point exit the trade.

6) Know when to trade and when to wait.

7) Love your losers like you love your winners.

8) Losing trades will be your best teachers.

9) After three losing trades in a row, take a break.

10) Don’t break any of the above nin rules.

Linda Bradford Raschke – 50 Time Tested Classic Stock Trading Rules

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1. Plan your trades. Trade your plan.
2. Keep records of your trading results.
3. Keep a positive attitude, no matter how much you lose.
4. Don’t take the market home.
5. Continually set higher trading goals.
6. Successful traders buy into bad news and sell into good news.
7. Successful traders are not afraid to buy high and sell low.
8. Successful traders have a well-scheduled planned time for studying the markets.
9. Successful traders isolate themselves from the opinions of others.
10. Continually strive for patience, perseverance, determination, and rational action.
11. Limit your losses – use stops!
12. Never cancel a stop loss order after you have placed it!
13. Place the stop at the time you make your trade. Continue reading »