1)Are you looking through the rear-view mirror, criticizing your last trade?- 2)Are you looking at your profit/loss for the day and filtering trades through that?
- 3)Are you distracted by people or the phone?
- 4)Are you thinking about yourself and how well or poorly you’ve been doing?
- 5)Are you locked in an opinion of what the market “should” be doing instead of observing what it *is* doing?
- 6)Are you wanting to get your money back after a loss or hold onto it after a gain?
- 7)Are you focusing more on yourself or on what markets are doing?8)Many times, our head just isn’t in the game. We can’t be focused on performance outcomes and immersed in our performance at the same time.
Archives of “profit loss” tag
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1)Money-Mind-Method
Mind: The key to winning is inside the Mind. As Master of your mind, you have to manage and understand your emotions very well. It is extremely important to understand not just the individual’s psychology, but also the crowd psychology of the markets. To become a successful trader, you must have sheer perseverance and discipline.
Method: There is no Holy Grail in the search for the perfect method to trade. Follow the wisdom of ‘Plan your Trade and Trade your Plan’. A good trading plan should cover your entry, exit and position sizing requirements. My method consists of discretionary trading techniques that combine both fundamental and technical analysis, in addition to my own proprietary automated trading system. Coming up with a good trading plan requires lots of market experience, as you modify, conquer and solidify your trading techniques. Don’t be duped by charming salesmen selling get-rich-quick-without-effort secret recipes.
Money: Overall profit/loss depends on money management. The first goal of money management is capital preservation. If you lose 10% of your capital, you have to make 11% just to break even. If you lose 40%, you need to make 67%, and if you lose 50%, guess what? You have to make 100% just to recover! So before you think about making big money, first you got to think about not risking your capital unnecessarily. Money management is too important to be overlooked.
Where Is Your Head When You're Trading?
Where is your head during the market day?
Are you looking through the rear-view mirror, criticizing your last trade?
Are you looking at your profit/loss for the day and filtering trades through that?
Are you distracted by people or the phone?
Are you thinking about yourself and how well or poorly you’ve been doing?
Are you locked in an opinion of what the market “should” be doing instead of observing what it *is* doing? (more…)
Evaluating Yourself as a Trader
Here I’ve shortened and republished ten items for self-evaluation:
1) What is the quality of your self-talk while trading?
2) What work do you do on yourself and your trading while the market is closed?
3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control?
4) Does the size of your positions reflect the opportunity you see in the market?
5) Are trading losses often followed by further trading losses due to frustration?
6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to achieve large profits?
7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied?
8) Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs–for excitement, self-esteem, recognition–that aren’t being met in the rest of your life?
9) Are you seeking returns that are realistic given your level of experience and development?
10) Can you identify the specific edges you possess over the many other motivated, interested traders that fail to achieve success in the markets?
Many answers to trading problems begin by asking the right questions.
Evaluating Yourself as a Trader
1) What is the quality of your self-talk while trading?
2) What work do you do on yourself and your trading while the market is closed?
3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control?
4) Does the size of your positions reflect the opportunity you see in the market?
5) Are trading losses often followed by further trading losses due to frustration?
6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to achieve large profits?
7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied?
8) Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs–for excitement, self-esteem, recognition–that aren’t being met in the rest of your life?
9) Are you seeking returns that are realistic given your level of experience and development?
10) Can you identify the specific edges you possess over the many other motivated, interested traders that fail to achieve success in the markets?
Many answers to trading problems begin by asking the right questions.
Learning from Mistakes…
A Reader of our Blog had sent me the following question …
“When should a trader know when to say it is enough and I need to get out of the position. More importantly, how do you find a balance between learning from a mistake and not being weighed down by it on your next trading decision.”
Here was my advice:
* if you have “edge” in a trade, then winning or losing on a trade will be determined long before you find out the outcome (profit/loss) on the trade.
* important to focus on the process of the trade… making ONLY high quality trades
* your job as a trader is not to determine or decide how much you make or lose…that is up to the market. Your job is to put on trades with “edge.”
as far as not being weighed down by the mistakes, my suggestion is to begin a “lessons learned” spreadsheet where you document mistakes you make and the lesson you learned from it.
I also suggest you start a qualitative trading journal that way you can get the emotions out of your head and onto the paper.
this will help you move past your barriers and get some closure on them so you can be focused on the next trade.
Evaluating Yourself as a Trader
1) What is the quality of your self-talk while trading?
2) What work do you do on yourself and your trading while the market is closed?
3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control?
4) Does the size of your positions reflect the opportunity you see in the market?
5) Are trading losses often followed by further trading losses due to frustration?
6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to achieve large profits?
7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied?
8) Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs–for excitement, self-esteem, recognition–that aren’t being met in the rest of your life? (more…)
Learning from mistakes and moving on
A Subscriber of mine asks me the following question …
“When should a trader know when to say it is enough and I need to get out of the position. More importantly, how do you find a balance between learning from a mistake and not being weighed down by it on your next trading decision.”
Here was my advice:
* if you have “edge” in a trade, then winning or losing on a trade will be determined long before you find out the outcome (profit/loss) on the trade.
* important to focus on the process of the trade… making ONLY high quality trades
* your job as a trader is not to determine or decide how much you make or lose…that is up to the market. Your job is to put on trades with “edge.”
as far as not being weighed down by the mistakes, my suggestion is to begin a “lessons learned” spreadsheet where you document mistakes you make and the lesson you learned from it.
I also suggest you start a qualitative trading journal that way you can get the emotions out of your head and onto the paper.
this will help you move past your barriers and get some closure on them so you can be focused on the next trade.