Confusion and Frustration for Traders

Maslow one commented that, when all you have is a hammer, you tend to treat everything as a nail. So it is with psychologists that involve themselves in markets. Lacking an understanding of actual speculative strategies and tactics–not to mention portfolio construction–they reduce performance problems to the lowest, psychological denominator. In so doing, they confuse cause and effect: they observe frustrated traders and assume that relieving frustration is the key to making money.

The professional speculator, unlike the retail daytrader, rarely falls into performance problems because of derelict discipline or runaway emotions. Rather, it is the very competence of the professional that leads to performance challenges. *It is when pros are most in sync with markets, identifying and profiting from themes and patterns, that they are most vulnerable to ever-changing patterns of direction, volatility, and correlation*. The confidence that permits healthy risk-taking under the best of speculative conditions inevitably gives way to confusion and frustration when skilled participants are no longer in sync with their markets. (more…)

Meet the market with an empty mind

empty_mindYou know you are a daytrader when you go to the movies with loved ones and a line in the movie becomes you next daytrading blog post.

The movie was 2012. A movie about the end of the world and the preservation of the human race. the entire movie is filled with moments of natural disasters, crashing buildings, people meeting their end, and people who are trying to survive and perserve the human race.

Amongst the mass destruction where the south pole becomes located someplace in Wisconsin, it is not surprising that religion comes into play. Once scene includes a wise old monk speaking with a young monk who obviously has not attained the wisdom of the old man. As they are speaking the wise old man pours a cup of brown tea until it is overflowing. The young monk tells him to stop as the cup is overflowing. The old man stops pouring and explains,

 ”like this cup a man’s mind is overflowing with opinions and speculation.

You must empty  the cup in order to fill it with wisdom” (more…)


Enter every trade with a plan and stick to it.  Understand first who you are as a trader.  Do you like to daytrade?  Do you prefer swing trading?  What is your risk tolerance level?  Everyone has a unique style and situation.  As a result, what might be a great entry point for a swing trader may turn out to be a not-so-good entry for a daytrader.  A trader with a low tolerance of risk might find that trade far too risky.  The key here is to know why you’re entering a trade, what it would take for you to exit (stop loss) and an appropriate target.  These should all be determined BEFORE you enter the position.  Many unsuccessful traders have one or two of these criteria figured out before they enter the trade.  It’s the third one that derails them.

Don't Overtrade !!!


Even a daytrader trading a five minute chart has no need to trade every day nor to trade all day long. You should be filtering your trades so that you take only the best of the best.

Overtrading was a problem that took me a long time to overcome because I did not know what I was looking for. Overtrading is a very serious problem, and veteran traders learn to avoid it. In fact, one way to know if a trader is a mature professional is to know if that trader conquered the problem of over trading. (more…)

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