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Ten Powerful Psychological Traits of the Rich Trader

  
  Education
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Ten Powerful Psychological Traits of the Rich Trader

  1. They have the ability to admit they were wrong and get out of a trade. They know the place where price proves them wrong.
  2. They have the ability to not only close a losing trade but reverse and go in the other direction when it is called for.
  3. The rich trader is not trying to prove anything about themselves they are focused on making money.
  4. They do not fall in love with an idea, currency, commodity, or stock they will make trades based on price action.
  5. Rich traders know that the market action is their ultimate boss regardless of their opinions.
  6. No matter how sure they are about a trade they still ALWAYS manage the risk.
  7. Rich traders get more aggressive when winning and trade smaller or take a break during a losing streak.
  8. A great trader is one that can admit to anyone that they were wrong.
  9. Rich traders do not believe their own hype, they know they can not really predict the future they can only react to current reality and the probabilities.
  10. Rich traders love what they do, win or lose.

When you are trading like that, it is hard to be beaten. Time is your friend.

Quote from Victor Sperandeo

  
  Education
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Trader Vic- Methods of a Wall Street Master

In his book Trader Vic: Methods of a Wall Street Master, Victor Sperandeo mentioned:

As an aside, I want to point out that although this period of intensive study helped me immeasurably in my ability to call the markets, it cost me substantially in my personal life. My daughter, Jennifer, was at a crucial formative age (3 to 5), and I spent almost no time with her. I would get home from the office, eat, and go straight back to work in my study. When she came into my office, I would shoo her away impatiently, totally ignoring the fact that she needed her father’s attention and love. It was a bad mistake that both of us are paying for today. If I had to do again, I would draw out the study period and give Jennifer more time.

After reading this paragraph, I have been doing a lot of thinking. I’m not sure if this is a common mistake among traders, I, sometimes, make the similar mistake. We know this business requires a lot of time, effort, attention, but our loved ones require more.

Just being a little bit emotional. Anyway, this book is really a good read. If you haven’t done so, go and get one.

The 10 Keys to Winning the Mental Game of Trading

  
  Education
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To win the mental game you must have…

  1. …faith in yourself.
  2. …faith in your system.
  3. … an understanding of what trading size you can handle.
  4. …an understanding of the level of losses you can deal with mentally and emotionally.
  5. …a love and passion for trading.
  6. …the belief that it is possible to win in trading.
  7. …the belief that all your hard work will be worth it.
  8. …that you are a trader, that is what you do.
  9. …the ability to have your butt kicked over and over but keep coming back.
  10. …the perseverance to keep trying until you are successful.

Discipline Trading

  
  Education
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-The market pays you to be disciplined.
-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.
-Always lower your trade size when you’re trading poorly.
-Never turn a winner into a loser.
-Your biggest loser can?t exceed your biggest winner.
-Develop a methodology and stick with it. don?t change methodologies from day to
day.
-Be yourself. Don?t try to be someone else.
-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.
-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.
-Get out of your losers.
-The first loss is the best loss.
-Don?t hope and pray. If you do, you will lose.
-don?t worry about news. it?s history.
-Don?t speculate. if you do, you will lose.
-Love to lose money. What I mean is to accept the fact that you are going to have
losing trades throughout the trading session. Get out of your losers quickly. Love to get out of your losers quickly.
-If your trade is not going anywhere in a given timeframe, it?s time to exit.
-Never take a big loss. Only a big loss can hurt you. consistency builds confidence and control.
-Learn to sweat out (scale out) your winners.
-Make the same type of trades over and over again ? be a bricklayer.
don?t over-analyze. don?t procrastinate. don?t hesitate. if you do, you will lose.
all traders are created equal in the eyes of the market.
-It?s the market itself that wields the ultimate scale of justice.

The 3 Most Confusing Things Your Math Teacher Ever Told You

  
Analysis, Education, Life
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Now that the fall term of school is over, we can all relax for the holidays. Here’s a gift to everybody out there, students and teachers and especially parents, who might still be befuddled about some of the more puzzling things that came up in math class. This is why the teacher said what she said.

1) You can’t divide by 0.

Why not? Well, because if you try to, no matter what answer you write down, it won’t make sense. Take 6 divided by 0. What should that equal? A lot of people guess 0. But that doesn’t work. If 6 divided by 0 were equal to 0, that would mean that 0x0 would have to equal 6 (just as 6 divided by 2 equals 3 means that 2×3 equals 6). The trouble here is that 6 divided by 0 cannot equal any number, because any number times 0 always gives 0, not 6. This is why division by 0 is verboten.

2) 1 is not a prime number (more…)

Stock Trading Rules

  
  Education
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istock Many of you have asked us  that you have  plan on or have written a book on the subject of trading. We haven’t yet, but plans are
 currently in the works for one. In organizing our notes recently, We have found a number of great trading rules that we have gathered
 along the way. Here are a few that we think are particularly helpful now:
 1. Be on the correct side of the supply and demand forces at work.
 2. Never upset the trading Gods by talking up your book. Hubris kills.
 3. Risk must be embraced, not feared.
 4. Reversals are always more lucrative than trends.
 5. Cycles tend to change before you can take advantage of them.
 6. Wishful thinking and emotional trading are a loser’s game.
 7. Never fall in love with a winning stock.

Risking

  
  Education
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Trading is all about riskcontrol !The following excerpt is from one of my favourite audiotapes ,’Risking ‘by David Viscount.I keep this on my desk to remind me each day to keep “risking.”Only a person who risks is truly free.

To laugh is to risk appearing the fool.

To weep is to risk appearing sentimental

To expose feelings is to risk exposing your true self.

To place your ideas ,your dreams ,before a crow is to risk their loss.

To live is to risk dying.To hope is to risk despair.To try is to risk failure.

But risks mist be taken ,because the greatest hazard in life is to risk nothing

The person ,who risks nothing ,does nothing ,has nothing ,and is nothing.

They may avoid suffering and sorrow ,but they cannot learn ,feel ,change ,grow ,love …live.

only a person who risks is free

Five Principles of Growth and Development for Traders

  
  Education
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five principles1) The Bodybuilding Principle – You only grow and develop when you work against significant resistance, lifting more than you can comfortably handle. Hard workouts, then rest: a formula followed by all fine athletes.

2) The Process Principle – Work on doing things well and the outcomes take care of themselves. Focus on outcomes and you interfere with doing things well. Process goals spur improvement; outcome goals create pressure.

3) The Feedback Principle – Turning feedback about how you’re doing into concrete goals for further work channels your development. Work without goals is like exploring without a map: you spend much time wandering aimlessly.

4) The Strengths Principle – You reach your greatest potential by making the most of your distinctive strengths, not by incrementally improving your weaknesses. What you’re good at will fuel your greatest passion and stimulate your highest efforts. (more…)

The Most Powerful Trader in the World

  
  Education
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Once you’ve mastered putting in protective stops, you’ll feel empowered. Why? Because at that point you are emotionally balanced and are WILLING to transfer the risk to someone else and exit with a small loss. You have emotional and financial understanding that trading is a process and that any one trade is meaningless over 1,000s of trades.

At that point you have personal power in that trading is just one part of your day and your life is abundant. And you don’t need to tell anyone about your trading. You’re in love with your process – be it mechanical or discretionary – and not in love with any one particular trade.

At that point, you’ll also realize that you can’t really speak to anyone about trading anymore. Most amateurs don’t understand that trading like a professional requires a combination of self-awareness, emotional intelligence, and some level of technical proficiency.

You won’t be able to communicate with such a person as they are speaking one language and you another. They are ignorant about your expertise and necessary behavior. It’s a dialect all its own and it’s unique to you and only you.

This ability is learned behavior – but most will never achieve this level because they are focused on the wrong principles. They’re missing the 80% of the puzzle that is most significant.

Three things to make trading less hard

  
  Education
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Trading is not easy but it also isn’t as hard as we make it.  Here are three things that will help it be less hard.

Trading Plan

Have a plan already.  You are just guessing and putting yourself through unnecessary stress if you don’t.  You are taking a test without studying.

Fall in love with the L’s

You have to live with the idea of loss and learning.  They are connected.  They are always fighting each other. Losses makes you want to ignore the learning and not losing makes you think you don’t need it.

Perspective

When you lose your optimism shrinks, when you win it expands.  Chances are you have only accepted winning. One trade does not make a trend, either direction.  But it is easy to connect the losses.  Step back and see it for what it really is.

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