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Perseverance

  
  Education
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It is very important to give yourself a realistic time frame when you are testing new systems or new markets.

Ask yourself: 

    • Do I get disappointed easily?
    • How do I deal with my disappointments?
      • Do I get mad and frustrated and let my emotions dictate what I do?
      • Do I get out of the game?
      • Do I play the blame game?
      • Do I examine what I did and tweak things to make them better?
      • Do I do a combination of all the above?
    • Do I jump from one strategy to another without giving it a fair chance?

“Success is never final, and failure is never fatal; it’s courage that counts.”

You Need To Learn How To Dance In The Rain

  
  Education
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Dance in RainEvery trader will experience storms during their trading career.

You might have days or even weeks without any storms, but they will come. Violent movements, large losses, markets that react opposite than your strategy tells you will happen and so much more.

We cannot keep these situations from happening; however we can make a decision to either wait for the storms to pass or step out and dance in the rain.

If we are planning on waiting until there are no storms, no struggles, no disappointments or no losing trades then we will be waiting for a very long time. Expect the storms to occur and have a plan as to how you will work through the storm.

When we work through the storm with a higher awareness of our risk management, money management and patience we will come out the other side stronger than before and will be ready for the next time a storm breaks out.

It is not the fact that storms happen, it is being ready to get out in the storm and still be productive. Instead of fearing the storm, learn how to dance in the rain.

Goldman Capitulates: Lowers GDP Forecast, Increases Unemployment And Inflation Outlook, Sees Imminent QE "Lite"

  
  Education
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It’s official: the double dip is here. Goldman’s Jan Hatzius just lowered his GDP forecast for 2011 from 2.5% to 1.9% (kiss goodbye all those 93 EPS estimates on the S&P), increased his unemployment forecast from 9.8% to 10.0%, boosted his inflation expectation from 0.4% to 1.0%, and said that QE lite is now on the table, as he expects that “the FOMC to announce that they will reinvest the paydown of mortgage-backed securities in the bond market at next Tuesday’s meeting.” Look for all other sell-side “strategists” (here’s looking at you Neil Dutta) to lower their economic outlook in kind, and the 2011 S&P consensus to decline accordingly.

From Goldman Sachs:

 
 

Over the past two to three months, the US economic recovery has lost a considerable amount of its momentum.   As a result, our forecast of a significant slowing in US growth in the second half of 2010—widely regarded as implausible just three months ago—is now increasingly accepted as the baseline.  As the data disappointments intensified in early July, we indicated that we would consider revisions to our economic outlook.  With the annual revisions to real GDP now behind us, we are making the following changes: (more…)

Is Your Self-Esteem Tied To Your Account Equity?

  
  Education
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Does your self-esteem rise and fall with your account equity? If so, your probably in for some difficult times ahead with you’re trading. For some traders, a trade is more than a trade, it can represent how successful they are as a person, how much status they feel, etc.  When your self-concept is closely tied to your trading outcomes the result is a yo-yo effect in terms of your self-esteem and your internal state.  And our internal state has a lot to do with how well we trade.

Trading already involves a lot of uncertainty, and tying one’s sense of self-worth to the ups and downs of trading is unnecessarily adding emotional volatility to the picture and is usually not a good idea.

Most traders need to work on being more resilient in the face of disappointment. Trading will always involve disappointments, its part of the territory.  A delicate balance between being fully engaged in the trade with a ‘watchful curiosity’ and without being overly attached to the outcome, is how many successful traders describe their internal state.

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