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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.

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.

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…)

Key Ingredients to Performing Your Best

  
  Education
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1.  Passion. You must be passionate about what you re doing and having fun. Passion first, then performance.
2.  Confidence. Top performance comes from having a high degree of confidence. You must have the confidence that you can take control and face adversity. You must also be confident that you will have a favorable outcome over time.

 3.  Concentration. Peak performance comes from exceptional  CONCENTRATION. You must concentrate on the process, though, not the outcome A sprinter who is in the lead is thinking about the wind on their face, how relaxed their arms are, feeling the perfect stride…they are totally in the moment. The person who does NOT have the edge is thinking, “Oh, that runner is pulling ahead of me…I don’t know if I have enough wind to catch the leader…” They are tense and tight because they are thinking about the outcome, not the
process.

4.  Resiliency. Great performances come from being able to rebound quickly and forget about mistakes.
5.  Challenge. Great performance comes from pushing yourself and trying to overcome limitations. Staying in the safe zone becomes a monkey on your back. Challenge yourself to take that hard trade. Manage it. If it does not work out, so what…your risk was limited and you can pat yourself on the back for taking the hard trade in the first place.
6.  See and DO … don’t think! Great performance comes from turning off the brain
and becoming automatic. This is being in the Zone …in the groove. You can’t overanalyze the markets during the trading day.
7.  Relaxation. When you are relaxed, your reflexes and timing are superior because
you are loose.

5 Qualities of the Top Super Traders

  
  Education
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1. A belief that you create your results in life.
Most people don’t understand this concept. They repeat the same mistakes over and over again because they blame their mistakes on external factors. For example, if you blame your bankruptcy in one of my marble games on the person who pulled the 5R marble against you, you are not taking responsibility for your position sizing error of risking 20% (or more!) of your equity on a single trade. Consequently, you’ll repeat this mistake over and over again and there will always be someone to blame for pulling the 5R marble against you.
Conversely, top traders are constantly determining how they produced their results and working to correct their mistakes. They create their reality.
2. The interest and desire to really understand yourself.
You cannot understand how you create your own results if you don’t know yourself intimately. I believe that most people live their lives like the automatons in the movie, The Matrix. They just do their thing, not realizing how much they have been programmed by their culture, and their family and friends rather than understanding that they always have a choice in everything.
The great traders I know continually study and challenge themselves, their thinking, their actions, and their reactions.
3. Discipline to continually work to improve yourself.
Top traders often have a passion to work on themselves. A good trader will probably complete the Peak Performance Course once or twice and internalize many aspects of it. A top trader, or a potential top trader, will go through the course many times and develop a discipline that involves spending 1-4 hours each day working on improving himself or herself. (more…)

Beating The Game

  
  Education
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3575My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market. The stock market is the greatest, most complex puzzle ever invented – and it pays the biggest jackpot….it was never the money that drove me. It was the game, solving the puzzle, beating the market that had confused and confounded the greatest minds in history. For me, that passion, the juice, the exhilaration was in beating the game, a game that was a living dynamic riddle, a conundrum to everyone who speculated on Wall Street. Jesse Livermore

Ten Ingredients to become A Great Trader

  
  Education
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It is all a game of risk management, mind, and a robust system. Everything else is just noise. 

  1. Passion for trading, only passion can fuel the work ethic needed to do the hard work that leads to success.
  2. Goal oriented traders succeed, if you know why you are trading and where it leads you may just get there.
  3. Perseverance: It is hard to lose if you never quit.
  4. Resiliency: The ability to come back from losses may be the secret to trading success.
  5. Back testing systems and methods before trading them speeds up the learning curve and side steps a lot of learning through real losses. (more…)

Desire -Skill

  
  Education
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The Desire
If you are trading just for the money you will quit before you are successful, Why? Anyone without a love for the game will quit during the long difficult learning process. After hundreds of hours of work and years of trading with nothing but a loss to show for all the effort anyone with common sense will think it is too hard and just quit. Those with a love and passion for trading will eventually succeed and usually make six figures or become a millionaire for their efforts. Those that do a cost benefit analysis in the first few years will generally quit due to the math.
The Skill
A trader must have the skill to trade in three dimensions. The management of the mind,  the method, and money management are all crucial for success. Traders must have the discipline and perseverance to trade robust systems through different market environments without giving up. They must have the ability to accept and deal with their thoughts and emotions as they arise during both winning and losing streaks. Risk must be managed on every single trade without the ego causing bets so big that they put your future trading at risk. The trader must also have the skill to not let fear take away the traders ability to pull the trigger on a good entry.

Secrets of Jesse Livermore

  
  Education
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1. Money Management:
    * “I trade on my own information and follow my own methods.”
    * “The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street, even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.”

2. Business of Investing:
    * “I believe that anyone who is intelligent, conscientious, and willing to put in the necessary time can be successful on Wall Street.  As long as they realize the market is a business like any other business, they have a good chance to prosper.”
3. The Investor Self:
    * “My satisfaction always came from beating the market, solving the puzzle.  The money was the reward, but it was not the main reason I loved the market.  The stock market is the greatest, most complex puzzle ever invented – and it pays the biggest jackpot…it was never the money that drove me.  It was the game, solving the puzzle, beating the market that had confused and confounded the greatest minds in history.  For me, that passion, the juice, the exhilaration was in beating the game, a game that was a living dynamic riddle…”
4. Market Analysis:
    * “What beat me was not having the brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favored my play.”
    * “It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind.”
5. Routines:
    * “It is what people actually did in the stock market that counted – not what they said they were going to do.”
    * “The game of speculation is the most uniformly fascinating game in the world.  But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer.  They will die poor.” (more…)
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