I want only what the market wants !
I enter in the market only when all of my indicators are pointed in the same directions !
I place stops as I enter trades !
I let any trade go that misses my entry !
I only initiate trade with a target price and a risk reward ratio of more than 1 : 1.
I have a reason to exit every trade !
I stay peaceful, calm and cool and see any and all of my emotions in a disassociated
vision apart from me while trading !
I cut my losses short with every trade !
I focus on each trade meeting its trading plan to measure success.
I trade in a regulated, even and controlled way so that I am always prepared in my mindset to pass on all trade should there be none for the whole day !
Archives of “emotions” tag
rssOn Psychology
- Stop trying to outsmart the market. NO ONE knows exactly where it will go.
- With each decision you make comes stress:
- The more decisions you make, the more likely you are to be wrong.
- The more decisions you are used to making, the more pressure you’ll put on yourself to make even more decisions.
- No one can be that right.
- Forget about the “whys’ of the market. After all is said and done, the reasons will be known.
- Don’t apply logic. Markets move on emotions — period!
- Plan your trade and trade your plan.
- Reduce the amount of decisions you make.
- Make decisions and live with them (also a life lesson!).
- Good decisions come from experience.
- Experience comes from bad decisions.
Movin’ On
The market doesn’t know your emotions or care about your portfolio. The market is moving on. And so should you.
– Terry SavageOne of the most challenging aspects of trading is learning to understand and appreciate that our constant desire to be right and smart in the markets will always cloud our judgment and too often work against us at the most inconvenient times.
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The challenge, as all of us will learn sooner or later, is that Mr. Market doesn’t listen or care about anyone’s else opinion but his very own. This is especially true when we are wrong and not following his hidden and often very confusing agenda. Mr. Market often acts like a rebellious teenager and does exactly what he wants to do, when he wants to do it, and at the same time has no respect for anyone who disagrees with him or believes he should act logically or within reason. In fact, a recent tendency is for the market to do exactly the opposite of tendencies we’ve seen so many times before. This is why you must place so much importance on what the market is actually doing rather than what you think it should do.
Or, better yet, we could just listen to some Bad Company:
You don't need to follow trading rules
We’ve all heard the proselytizers of trade planning bemoan lesser traders that they need to follow their trade rules. Yet, emotional traders still dominate the retail trading landscape. After hearing about how bad they are for acting as they do, they flagellate themselves for allowing emotion to enter into their trading decisions and re-dedicate themselves to discipline trading without emotions. But who are we to judge why and how someone else trades with their money?
Of all the different types of trading styles, I find the emotional style of trading the most entertaining. It is more human and natural than a game of probability. There is personal stuff at stake. Anyone who preaches to you that you need to stop it and get a plan is really preaching to themselves. They are healing a wound, or trying to convince themselves that they no longer participate in the egregious activity of trading without one. They are essentially scared of their emotions.
You cannot detach yourself from your emotions. If you want to trade based on emotions, I support your decision. After all, it’s your money and it’s not my place to tell you what to do with it.
Rules. We think of them as ‘made to be broken’ for a good reason. Rules are limiting and suffocating. Yes, we need some basic ones in our lives, but as soon as a method of trading is defined as a rule, the inner workings of the imagination begins the task of find ways around it. It’s only natural. Our total human experience cannot be contained with stupid rules. And who is making these rules anyway? Why are they valid? We all know that rules are put in place because we basically don’t trust someone (maybe ourselves) to do the right thing when the time comes. (more…)
Be Yourself
Everyone in this business will tell you how to be and what to do, but the bottom line is that you’ve got to always be yourself – flaws, emotions, stupidity, and all.
There’s a saying that the stock market is an expensive place to figure how who you really are but I completely disagree. Through the many years I’ve been trading, I’ve learned much more about myself and the way I am both good and bad than I think I would have any other way. And, for that I’m so very grateful.
It is with little doubt that my experience in the markets have in turn made me into a much better human being. For example, one who thinks before acting, one that appreciates the importance of looking at situations from different points of view, one that knows that you can do everything right but still be wrong, one that understands the influence that emotion has on decision-making, one that remembers that no matter what mistakes you and I make today – tomorrow we will have another opportunity to do better. I’ve learned a great deal more, but I think you get the point.
Speaking of which, a number of people have asked me recently that if train people to “be more like me” in my mentorship group. The truth is that I try my darndest to never do that. My goal with those who I personally mentor is to help them become who they really are and, by extension, to take full advantage of their own personality and skills whatever they may be and at whatever level they currently are. The primary problem, however, is that many of us really believe the key to success is to be more like others whether it be Warren Buffett, David Einhorn, George Soros, Doug Kass, Jim Chanos, Whitney Tilson, Jim Cramer, or whoever you admire and respect. As you know, one of the fastest growing businesses on the Internet right now is to enable you in new and exciting ways to trade and invest just like others, but in my view, that will only take you so far in your personal journey. In the markets, sooner or later, you have to find your own path!
Each of us have our own skills, strengths, weaknesses and personalities and matching those with a strategy you can use and develop over time is the closest key to your future success that I can help you with.
Bottom line – don’t be like me or anyone else for that matter, but instead just be yourself. Use this time in your life to find ways to take full advantage of your own God-given talents and skills as you develop them. While it is ok and, in fact recommended, that you try to learn as much as you can from others (I know I have), at the same time you must also understand and appreciate that to true key to success is to find your own path just like every trader and investor who you so admire right now has already done.
Characteristics of Successful Trader
- Successful traders have absolute control over their emotions, they never get too elated over a win and too depressed over a loss.
- Successful traders seldom think of prices too high or low.
- Successful traders do not panic, they make adjustments rather than revolutionary changes to their trading style. (more…)
Eight Questions That Go Bump in the Night
Why do the gurus who proclaim a “feel” for the market tell us to eliminate emotions from trading?
Would 80% of traders make money instead of losing it by placing trades through “enrichers” instead of “brokers”?
Why do people who offer programs on making a living from trading make their livings from offering programs?
Why do beginners think they’d have an easier time beating professionals at trading than at golf, boxing, racecar driving, or chess?
Why are so many market newsletters bullish or bearish, when the most common market outcome is little or no change?
What happens when contrary opinion is the dominant school of thought?
Why do trend followers follow trend following once it goes out of favor?
If exchanges make more money than brokers; brokers make more money than market makers; and market makers make more money than traders, is the answer to success in the markets to always have people who are your customers?
10 Foolish Things a Trader are Doing
- Try to predict the future movement of a stock, and stay in it no matter what.
- Risk your entire account on one trade with no stop loss plan.
- Have a winning trade but no exit strategy to get out, no trailing stop or exhaustion top signal.
- Ask for and follow the advice of others instead of trading with your own trading plan, method, rules, and system.
- Trade your emotions instead of signals: buy when you are greedy and sell when you are afraid.
- Trade your opinions, not a quantified method.
- Do not bother to do your homework on trading, just jump in and trade, you are smart, you will figure it out.
- Short the best and most expensive stocks in the stock market and buy the cheapest junk stocks.
- Put on trades you are 100% sure are winners so you do not even need a stop loss or risk management.
- Buy more of a trade that you are losing money in and sell your winners quickly to lock in small profits.
Ari Kiev – The 10 Cardinal Rules Of Trading
The Ten Cardinal Rules
1. Learn to function in a tense, unstructured, and unpredictable environment.
2. Be an independent thinker versus a conventional thinker.
3. Work out a way to handle your emotions and maintain objectivity.
4. Don’t rely on hope and fear in the conventional sense.
5. Work continuously to improve yourself, giving importance to self-examination and recognizing that your personality and way of responding to events are a critical part of the game. This requires continuous coaching.
6. Modify your normal responses to certain events. (more…)
Is stock trading difficult? Depends on who you ask.
Is stock trading difficult? Depends on who you ask. A seasoned trader with the discipline to follow well honed principles will say “trading is not difficult. See how I take losses and let my winners run?” A battered and bruised, emotionally unstable trader will say “the market is difficult. I am getting my @ss handed to me on a platter and it hurts!” A breakeven trader will say, “compared to my broker I am not doing so bad.” Our perspective makes all the difference in our success of failure. If we can have the proper perspective then the market cannot hurt us. The proper perspective includes, but is not limited to, the following: The market will do what it wants to do when it wants to do it regardless of the technical games we play. We win some lose some, in no particular order, on any given strategy. The only trading mistake that matters is when future uncertainty is not properly considered an essential element of risk. The long-term process, not short term outcomes, builds the consistency necessary to tackle market uncertainty. Responsibility accepted before the trade becomes the disciple that carries us through the trade. The best money is oftentimes made by being a non-participating, impartial observer.
So the next time someone asks if stock trading is difficult. What will be our answer? Will it be based on the proper perspective or on the last trade we made? On emotions? On our reaction to price action? News? Compared to what? A successful bust or a skinned knee? The answer can make a difference. |