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TRADE WHAT IS NOT WHAT YOU THINK SHOULD BE

Trade what is… for in doing so your trading is based on fact, substance and reality.  It provides clarity, confidence, manageability, and useful feedback for consistent success where appreciation for winning, and respect for losing, keeps you in the game.

Do not trade what you think should be….for in doing so your trading is based on egotism, a false sense of foresight, the desire for validation and approval, and the “win at all cost” mentality, which  leads to confusion, anxiety, anger, and despair…not to mention the inability to trade another day.

64 points : Traders Reality Wisdom

Knowledge only becomes wisdom if it is transferred and applied. I have compiled 65 of the best
tweets that focus on the psychology of trading. This is beneficial for those who would rather refer
to this document in their spare time, maybe print it off and have it near their trading desk?
Enjoy…
1. It’s so important to understand what is meant by failure? Failure occurs when you lack
knowledge, even if you have the knowledge and still fail…well I guess determination and
perseverance come into play.
2. If you are prepared to study an indicators entry and exit criteria, why would you assume
that is all that is needed to make money. Pay more attention to the function of how the
market works. Then you will realise that indicators alone are not sustainable.
3. You have to build calluses in your mind. The tough conditioning of losses builds a
character that eventually develops a discipline of awareness and embraces uncertainty.
Train your mind to lose, perform to win…
4. The development of a irrational trading mind starts with the traders lack of conviction on
their preferred trading personality. It’s paramount to your progression that you establish
your trading personality.
5. Most new traders are back testing how their method will perform. Most new traders
neglect to train the mind which = emotional imbalances?
6. A Trader that boasts of his victories, tends to be hiding his losses. Entertain the Trader
that talks of losses for he has been humbled.
7. I used to take losses and be angry. Then I accepted one important element in trading. I
HAVE NO CONTROL OF UNCERTAINTY.
8. Believe Me When I Tell You…Unless You Accept Uncertainty, You Will Forever Have
Expectations That Will Lead You To Losses. Learn Acceptance.
9. Some Are Happy To Accept Reality Of Being Correct But Not If Wrong. This Battle In Our
Mind Will Forever Obstruct Our Progression as Traders
10. Losses are Gold to every trader.
11. An Old Saying Can Be Related To This “Observe Your Enemies (Emotions) They
Highlight Your Faults.
12. Many Hide From Losses. Little Do They Know, Losses Are The Key To Changing And
Becoming Aware Of What Needs To Be Done To Improve.
13. Trade for the moment, for the dwelling on expectation of a move is sure to upset and
damage Trading moral.
14. The market will never teach you how to win. It will teach you how to become one with
your mind. The battle is in our minds
15. Never Start Your Trading Week Convincing Yourself How Much Money You Are Going
To Make. Focus On Trading Well. The Money Will Come…
16. Rule Of Sales: Customer Is Always Right Rule Of Trading: Market Is Always Right!
17. Taking Time Away From The Markets Creates Transparency In Your Mind To Correct
Behaviours That Sabotaged Your Trading
18. Your philosophy is the determining factor to your trading success
19. The minute that we change our minds and stop giving power to the past, the with its
mistakes loses power over us.
20. Our brains use biological mechanisms to translate expectations of what we want to
perceive…Manage these mechanisms to trade mindfully.
21. Why Get Mad If Your Indicators Give You A False Signal? There Is No Indicator That
Factors The Unknown.
22. Never be excited to trade…This will set you up to avoid taking losses…More importantly
feeding The Ego.
23. It is through adversity, are you then able to reset your mind and focus on forming new
habits to overcome the self limiting beliefs.
24. There’s no greater wisdom than of those who tell you not to make a mistake.I guess the
smart learns from himself.The wise learns from others.
25. The only factors that MM rely on is Fear and greed of retail traders. Not to forget that they
make the market. So they can see all orders and simply send price in that direction to get
their orders filled
26. Does your imagination as a profitable trader hinder your approach to trading
successfully? Do not be fooled by short term success.
27. A Trader Will Continue To Encounter The Dark Perils Of Trading… It Is Only When He
Accepts That He Is Allowed To Be Wrong, He Is Then Free
28. Trading is about the expression of one’s character to manage their behaviour through the
chaos of the financial markets. Only when he is one with his mind he expresses his true
ability as a mindful trader
29. Let’s Face It…Trading Is Like This…Some Will, Some Won’t, So What!!!! Next Trade. If
you understand this…You free your mind of expectation
30. It’s Really About Taking Your Profits And Accepting Your Losses. Everything Else That
Intervenes Is Bad For The Trading Soul.
31. Trading Safely Is Like The Habit Of Driving Safely, Always Pay Attention, Whether You
Are Angry Or Happy, You Still Have To Drive (Trade) Safely. Habit Will Protect Your Car
(Capital)
32. Results orientated: in poker, you have no control of the outcome of the flop. You only
have the strength of your hand to go by. Acceptance and understanding of variance
sustains longevity. This is no different in trading
33. The beauty of trading is this. The harder you work, the harder it is to surrender.
34. The only way you can really apply yourself when taking a trade is to not care…how do
you do it? Simple. Practise…like driving a car. Are you continuously conscious of
changing gears? No. Subconsciously you do it without hesitation. It’s the only way to
move forward.
35. Anyone that enters into the realm of trading usually has the perspective of “me against
the market”…The true reality is, it’s “ I Against I” before you confront the battle of trading,
confront the battle in your mind.
36. A mistake that traders make, one that took me a while to overcome was once I entered a
position,I turned from a trader into an investor…Biggest mistake you can make. If your
position is losing, get out, don’t “ride it” in hope it will return. Waiting to break even costs
money.
37. Trading same way you would on a roulette table: 1) you bet/trade 2) your number
hits/trade is profitable 3) you take your winnings/close trade. So why would you allow a
winning trade to turn into a loss. Take whatever is given by the market. You never knew it
would be a winner.
38. Admitting that you lose is the first step to transitioning as to why you lose. Many traders,
even myself, have struggled with accepting this. It’s only when enough money is lost that
you then decide, “to survive in this game, I have to accept it’s OK to be wrong”
39. When you decide to not allow your conflicts of the mind deter you from making
systematic and objective decisions, you will be taking the first step to becoming a trade
40. Once you detach from the money. You then become a trader. A trader thrives on the
process not the result. Being results oriented most likely guarantees expectations, which
definitely guarantees upsets and mistakes.
41. Many will learn from their mistakes, but few focus and study their behaviour when they
were right…Learning from mistakes saves you money…Learning from your wins, makes
you money.
42. A Retrace. The idea behind it is “oh it needs a break” or “it’s taking a breath”…that’s what
the MM want you to think. A retrace is a stop hunt for the market makers to suck in as
much liquidity as they can to fill their orders.Don’t be fooled.
43. When you learn to detach from what the market is fooling you to believe, you are then in
a position to take advantage of the market makers momentum. Get in and get out. The
market is no place for heros. You will get slaughtered.
44. The mind is a great thing. Funny how you place a trade and then all of a sudden the entry
you took does not seem to align with your analysis? Hindsight does that to you. But we
can avoid this by simply accepting what is and not focus on what it could be.
45. There were days when I felt compelled to trade. This was because I had FOMO. Fear of
missing out mindset is guaranteed to make you successfully lose each time you enter
into the market with this way of thinking. Cash is a position too.
46. If you really want to succeed in this game, you have to let go my friends. This game takes
no prisoners. It doesn’t care if you have £1m account or £1, to the market, it’s liquidity,
they will take it from you. Unless you learn to play the game.
47. The great thing about trading is, you only need to be right 50% of the time..there are
traders that are right less than 50% of the time and are profitable.???Money
Management and Mind Management
48. Be aware of the FOMC. This is a passport for the market makers to really take out areas
of liquidity for their own gain. If you have profited from today’s movements. Great…Don’t
give it back. Let the Dumb money get swallowed.
49. At some point you will develop the skill set to be able to close a losing position and re
enter. Avoid being results oriented, focus on the process of execution, if done correctly,
the results will always be positive.
50. Your objective as a trader is to survive. If you trade and win, great…Next trade. If you
lose and lose small, great…Next trade. It really is all about the process of entry to exit
and simplifying this behaviour by managing your emotional imbalances.
51. Avoid thinking like the herd. It pays to really focus on the behaviour of the one who
controls the herd. Then you will have you answer.
52. You will only improve your trading if you allow yourself to. The same way stands if you
close a losing position when your rules tell you too and close a winning position when
your rules tell you too. Become me aware of your behaviour, then you can grow.
53. It’s nothing to be afraid of…Losses are indefinite in this game…Just aim to keep them
small
54. Trading is all about gathering the wisdom of those who are prepared to share their
losses, their wins and determination to find the balance with their mind.
55. Who cares if you made a call and said price would hit a certain price area, are you a
genius? Have you developed a flawless consistently profitable indicator? Who cares!
Demonstrate your ability to manage risk effectively before you claim the title of “Trader”
56. If you feel the market is out to get you…your right…but the flip side, the market can be
very rewarding, it’s all down to perspective and mindset.
57. Don’t fool yourself into thinking that the current trade you have is the final one. There will
always be tomorrow.
58. It’s no secret, the market makers will manipulate price.They can also manipulate your
mind. If your thinking is irrationally based, then this is your greatest adversary. Fix your
thinking…Then you will see trading for what it is
59. I guess the greatest tool to a trader is a drawdown….this exposes you, to your faults and
thoughts. Using a drawdown can be advantageous and help you improve your trading.
Drawdowns happen regardless. It’s what you decide to take from each one.
60. If there is one thing I can share with everyone. If your trading. Always Always Always pay
yourself…This game is about longevity
61. So you are left with a zero account after you had received margin call on a position to
only see it be closed out…the irony is, the moment you placed the trade, your mind said
“that’s too much”, but greed stepped in…be systematic, not impulsive
62. I guess the key to trading successfully is to accept that you have no idea how the market
will behave…However, have a very clear vision of how much money you are willing to
risk. Always make money management your priority
63. Always always protect yourself…I guess the #science of boxing and trading are really no
different. The battle you must overcome is the battle of ” I Against I”
64. There is no indicator that will manage your emotions during trading. However, executing
a plan, without hesitation will eliminate you responding emotionally to any circumstance that arises in the market

The Greatest Trading Loss

The Greatest Trading Loss

 Trading-loss

What is the greatest risk you face in trading?

 

Is it loss of money?

 

Certainly, that’s what most traders believe. I tend to disagree though. In my opinion we have something much greater at risk, that very few of us consider during the ‘learning phase’.

 

The American political journalist and author, Norman Cousins, is quoted as saying, ‘Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.’

 

Along similar lines, I would argue that loss of capital is not the greatest loss in trading. The greatest loss is what we lose from within. (more…)

"The Confident Trader "

Confidence overcomes fear. Confidence also overcomes greed because a component of greed is an underlying sense of scarcity. To be confident doesn’t mean that every trade or trading day will be profitable. What it does mean is that when you look to where you want to go, you know that you can figure out a strategy that will get you there. And you know you can execute that strategy in a consistent manner. A successful strategy doesn’t mean anything if you don’t or can’t or won’t employ it.

Theoretically we should be as successful at trading and investing as our trading and investing strategies. Unfortunately the vast majority of traders and investors fall far short of the results of their strategies. They trip over themselves again and again on the way to employing their methods. My work as a trading coach is to enable traders around the world to become as good as their methods.

Confidence need not waver when you have dips and troughs and plateaus in your trading. Confidence is developed when you realize you can correct mistakes and learn from failures. You don’t persist in failing. You learn and move on. You don’t fear repeating the failure either, you simply anticipate correcting it.

Self esteem is basically the sum total of all the thoughts we have about ourselves. This is quite important because we do tend to become what we think about ourselves. The noted philosopher and psychologist, William James, said, “People, in general, become what they think of themselves.” Not only did he say this but he added that this was the essence of all we had learned in psychology in the prior 100 years.

What do you think of yourself as a trader? Do you believe that your dream of excelling as a trader is possible? Do you have a set of philosophies that support your dream? Are you as good as your methods? If not, it’s time to do something about it.

Consider my coaching program. I speak for an hour on the phone each week with the traders I coach. We review your trading, beliefs, attitudes, habits, and philosophies. I help you do more of what works and stop doing what doesn’t work. Through exercises, assignments, and repetitive listening to the CD’s I send, you can become as good as your methods. The money you invest in yourself—especially in difficult times—is truly the best investment you can make. It will pay you exponentially because you never leave yourself. Call me at 800-692-0080, and we’ll discuss it.

25 rules of Trading Discipline

  1. The market pays you to be disciplined.
  2. Be disciplined every day, in every trade, and the market will reward you. But don’t claim to be disciplined if you are not 100 percent of the time.
  3. Always lower your trade size when you’re trading poorly.
  4. Never turn a winner into a loser.
  5. Your biggest loser can�t exceed your biggest winner.
  6. Develop a methodology and stick with it. don�t change methodologies from day to day.
  7. Be yourself. Don�t try to be someone else.
  8. You always want to be able to come back and play the next day. Once you reach the daily downside limit, you must turn your PC off and call it a day. You can always come back tomorrow.
  9. Earn the right to trade bigger. Remember: if you are trading poorly with two lots you must lower your trade size down to a one lot.
  10. Get out of your losers. (more…)

Psychological

.PsychologicalThe goal of any trader is to turn profits on a regular basis, yet so few people ever really make consistent money as traders. What accounts for the small percentage of traders who are consistently successful is psychological—the consistent winners think differently from everyone else.

The defining characteristic that separates the consistent winners from everyone else is this: The winners have attained a mind-set—aunique set of attitudes—that allows them to remain disciplined, focused,and, above all, confident in spite of the adverse conditions.

Those traders who have confidence in their own trades, who trust themselves to do what needs to be done without hesitation, are the ones who become successful.They
no longer fear the erratic behavior of the market. They learn to focus on the information that helps them spot opportunities to make a profit, rather than focusing on the information that reinforces their fears.

You don’t need to know what’s going to happen next to make money; anything can happen, and every moment is unique, meaning every edge and outcome is truly a unique experience.

The trader that it’s his attitude and “state of mind” that determine his results.

29 One Liner Trading Rules

  • Take no trades without establishing a complete and precise trading plan before the initial trigger.
  • Keep an open mind for new market scenarios based on what the price action and pattern setups provide.
  • Always trade with the trend.
  • Once I am in a trade, stick with the original plan for target and stop-loss – Don’t panic!
  • Make every trade meet the strategy requirements and what happens from there is up to the market.
  • I need to exercise greater patience in both buying and selling.
  • Be more willing to take a position, even if it is very small. It is tough though to gain the confidence to do so as the market has been tough. (more…)

Success is the mother of confidence

How do you build confidence?  There are many ways but only one process: multiple small successes.  I am very much an advocate for boring trading.  What I mean by that is I trade the same edge over and over again without variation.  By trading the same edge over and over again I know when to get in and when to get out.  I know what to look for when a trade is working and I can safely add to my position.  On the other hand, I know what to look for when the trade is not working and I can exit with a small loss.  By following the rules EVERY TIME you can succeed, not in making money every time (impossible!), but by following the same plan every time.  These small successes give you the confidence to trust yourself each and every time your edge presents itself.  This is true in any new venture, whether it be golf, bowling, drawing, flying, etc.  Each small success gives birth to greater confidence which in turn brings further successes.  You can then replace a vicious circle of failure with a confident circle of success.  It is so EASY to want the lottery ticket or the home run every time at bat but HARD to accept when the numbers do not add up or when all the preparation leads to nothing more than the hard earned single.