Archives of “execution” tag

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Patience, Preparation and Performance

  
  Education
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Everything is difficult before it becomes easy.

With the current volatility of the financial markets, it is extremely important that each of us resolve to be patient in our decisions and not make snap judgments. These can create future disaster.

The most successful individuals around the world have a foundation of processes that they utilize consistently, no matter whether the markets are trending with clear direction or being extremely volatile.

Each of us needs to be patient and allow the trading plans that we use to provide points of execution for trades. We need to be prepared for any and all movements in the market, yet stay committed to our plan and then perform with a self-confidence that ensures that we do not stray away from the steps of our plan.

Patience, preparation and performance surrounded by a solid trading plan along with money and risk management will produce the highest probability for profitable success.

Preparation combined with Opportunity creates a new word I would like to give to you — Prepartunity. Every day provides new opportunities for us. If we are prepared then we will receive the highest results possible.

20 Skills for the Trader

  
  Education
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1.      Know the difference between trading and investing.  We are traders, NOT investors.  ••  Disciplineis doing the right thing at the right time…every time! Survival in this business is dependent on the right decisions.

2.      Don’t let losers run!  Always use stops .  Riskmanagement is very, very important in your trading.  Don’t be stubborn in holding a position. Remember, while you may not be wrong often, The Market Is Always Right.  The best traders are the first to admit (to themselves and the market) that they made a mistake.

 3.      Trade only price pattern set-ups.

 4.      Trade for skill, NOT the money.  If you’re focused on the money aspect of trading…you’re not focused on the ‘trade’.  And SCARED MONEY NEVER WINS!

5.      Concentrate on what you are trade.  Each market has personalities, habits and friends…get to know them all.

 6.      Focus on your executions.  Remember, every execution is a trade.  Money is valuable…don’t leave it on the table. (more…)

Eternal Truths About Trading Success

  
  Education
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truthToday afternoon  once again  read  small book from the late 1800s written by Dickson G. Watts and reprinted by Traders Press. Entitled “Speculation as a Fine Art and Thoughts on Life”, the book begins with a description of the “qualities essential to the equipment of a speculator” (p. 8). Here is the author’s perspective, written well over a century ago:

* Self-Reliance – “A man must think for himself, must follow his own convictions…Self-trust is the foundation of successful effort.”

* Judgment – “…equipoise, that nice adjustment of the faculties one to the other…is an essential to the speculator.”

* Courage – “…confidence to act on the decisions of the mind…be bold, still be bold; always be bold.”

* Prudence – “The power of measuring the danger, together with a certain alertness and watchfulness, is very important.”

* Pliability – “The ability to change an opinion, the power of revision.” (more…)

Ritualize practice

  
  Education
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“The best way to insure you’ll take on difficult tasks is to ritualize them — build specific, inviolable times at which you do them, so that over time you do them without having to squander energy thinking about them.”  The best time to prepare for trading is before the market opens or late in the evening after you have had a break from the close.  Execution is based on proper preparation.  If you are properly prepared for the battle then the execution will be a synch.  Remember:  trading is war PREPARE your weapons.

If you wish to excel at trading it is going to take a lot of hard work but we all know that anything really worth having comes with a sacrifice of one thing for another.  As Mr Swartz sums it up:  “If you want to be really good at something, it’s going to involve relentlessly pushing past your comfort zone, along with frustration, struggle, setbacks and failures. That’s true as long as you want to continue to improve, or even maintain a high level of excellence. The reward is that being really good at something you’ve earned through your own hard work can be immensely satisfying.”

Few suggestions

  
  Education
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suggestion1) Forget about performance and results numbers (i.e. P/L, Wins vs. Losses). These numbers only blur the plan and increase the anxiety on not losing on next trade. This aggravates the proper mindset to prepare to trade properly. Perfectionists will not execute well and will try to focus on buying low (bargain hunting to win) when the entry is not right.
2) Create the trading plan and write it into details to avoid ambiguity. This helps prevent loosely interpreted actions and end with too much leeway and perfect execution won’t be successful.
3) Focus on the charts and work toward identifying and preparing the entry and exits. Having these numbers in mind will keep the focus on the executing at the right prices.
4) Focus on the Risk:Reward ratio in mind. Having this ratio will keep the execution precise because any miscue will change the ratio in negative way. If the ratio is set, chances of the making the perfect entry and exits are higher. (more…)

Essential qualities for Speculator

  
  Education
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1)Self-reliance :A man must think for himself ,must follow his own convictions.Self-trust is the foundation of successful effort.

2)Judgement :That equipoise ,that nice adjustment of the facilities one to the other ,which is called  good judgement ,is an essential to the speculator.

3)Courage :That is ,confidence to act on the decisions of the mind.In speculation ,there is value in Mirabeau’s dictum :Be bold ,still be bold ,always be bold.

4)Prudence :The power of measuring the danger ,together with certain alertness and watchfulness is important.There should be a balance of these two ,prudence and courage ,prudence is contemplation ,courage in execution.Connected with these qualities ,properly an outgrowth of them ,is a third ,viz :promptness.The mind
convinced ,the act should follow.Think ,act ,promptly

5Pliability :The ability to change an opinion ,the power of revision.He who observes ,says Emerson,and observes again ,is always formidable.

Focus & Anticipation

  
  Education
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Focus: Once all of the little things are taken care of you can now focus on what is important, the market. This will dramatically improve your execution. You can only execute well over time if it is you and the market. You can take more intelligent risks because you have more of the RIGHT information. Have you ever been in a trade, then when you go back to review a trade, you realize you missed something important? More than likely that is a process problem. It is important to accurately attribute the importance of that information and realize that hindsight is a horrible recorder. I would rather make that decision when I can do something about it. This takes trial and error but a pattern will develop and once it does it is your responsibility to constantly monitor it for change.

Anticipation: Anticipation is key in trading because the market is always leaving cues to what it is going to do next or that what it is going to do next is not tradeable. We teach our traders to have a progression, much like a quarterback would. Anything can happen and having a progression will help you to take advantage of it.

7 Points for Traders

  
  Education
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  1. You don’t choose the stock market; it chooses you.  A little bit of early trading success can have a profound effect on a person’s soul.  If it does choose you, you’ll have to accept that your life and investing will become forever connected.
  2. Your methodology must provide an unshakeable foundation that you believe in totally, and you must have the conviction to trade based upon it.   If your belief is tentative or if you don’t have complete faith in your methodology, then a few bad trades will destabilize and erode your confidence. 
  3. A calm mindset that can focus on the execution and not on the outcome is what produces profits.  It takes total emotional control.  You must maintain your balance, rhythm and patience.  You need all three to stay in the game.
  4. The markets are always conniving with ingenious techniques to get you to lose your patience, to get you frustrated or mad, to bait you to do the wrong thing when you know you shouldn’t.  A champion doesn’t allow the markets to get under his skin and take him out of his game.
  5. Like a great painting, all good trades start with a blank canvas.  Winning traders first paint the trade in their mind’s eye so that their emotional selves can reproduce it accurately with clarity and consistency, void of emotions as they play it out in the markets. (more…)

Trading Wisdom

  
  Education
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Successful traders:
1) are very solid with what he called the “basics” (tape reading, execution, preparation for the trading day),
2) have discovered the trades that fit your personality and became excellent at those and
3) realize that successful trading is about pulling a small bucket of profit water out of the market well multiple times (in other words they are not greedy).

4) a passion for trading,
5) the willingness to admit you are wrong in your bias and to change your bias or terminate a losing trade and
6) to work really hard to become better each day.

7) an ability to recognize what trades truly work for you and to STICK with them and
8) calmness in the midst of market volatility.

Unglamorous as it may sound, it looks like the clear winner is hard work and learning the basics. Should this be that big of a surprise? Wasn’t it Thomas Edison who said ” genius is 1% inspiration and 99% perspiration”? But it is interesting to note that two of the three put a very high premium on recognizing your trading strengths and focusing on those types of trades primarily.

Common Advice is Ineffective

  
  Education
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“Plan the trade, and trade the plan!” is perhaps the most common advice given to traders. As far as advice goes, it’s well meaning, but unfortunately falls well short of addressing the problem most traders actually face. 

Looking at the advice, it has two parts. The first part says you need a plan. No argument there. But the second part, about executing the plan, that’s where the problems appear. Why?

The two parts to the advice ‘plan the trade’ and the ‘trade the plan’ require two very different skill sets. Without understanding the different skills required, it’s highly likely that you will continue to regularly veer from your plan. (more…)

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