Archives of “trade selection” tag

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What's the difference between winning traders and losing traders?

  
  Education
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Well, first, there are a few similarities. Both are completely consumed by the idea of trading. The winners as well as losers have committed to doing this, and have no intention of ‘going back’. This same black-and-white mentality was evident in their personal lives too. But what about the differences? Here’s what Williams observed:

The losing traders have unrealistic expectations about the kind of profits they can make, typically shooting too high. They also debate with themselves before taking a trade, and even dwell on a trade well after it’s closed out. But the one big thing Williams noticed about this group was that they paid little attention to money management (i.e. defense).And the winners? This group has an intense focus on money management, and will voluntarily exit a trade if it’s not moving – even if it’s not losing money at that time! There is also very little internal dialogue about trade selection and trade management; this group just takes action instead of suffering analysis paralysis. Finally, the winning traders focused their attention on a small niche in the market or a few techniques, rather than trying to be able to do everything. Hopefully the second description fits you a little better, but if the first one seems a little too familiar, you now at least know how to start getting past that barrier.

What's the difference between winning traders and losing traders?

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

Well, first, there are a few similarities. Both are completely consumed by the idea of trading. The winners as well as losers have committed to doing this, and have no intention of ‘going back’. This same black-and-white mentality was evident in their personal lives too. But what about the differences? Here’s what Williams observed:

The losing traders have unrealistic expectations about the kind of profits they can make, typically shooting too high. They also debate with themselves before taking a trade, and even dwell on a trade well after it’s closed out. But the one big thing Williams noticed about this group was that they paid little attention to money management (i.e. defense).And the winners? This group has an intense focus on money management, and will voluntarily exit a trade if it’s not moving – even if it’s not losing money at that time! There is also very little internal dialogue about trade selection and trade management; this group just takes action instead of suffering analysis paralysis. Finally, the winning traders focused their attention on a small niche in the market or a few techniques, rather than trying to be able to do everything. Hopefully the second description fits you a little better, but if the first one seems a little too familiar, you now at least know how to start getting past that barrier.

Creative Responsibility

  
  Education
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“What good can come from comfort? It’s not going to be art. I think there’s a false ideal out there, to some people — maybe younger people — they might think “I could be an artist and I don’t have to work.”

“But I think calling yourself an artist, you have to work three times as hard as someone with a punch-clock job. Because if you punch in, you have a responsibility at your job, but you can also do what you’re told, and work the machine, whatever you’re doing, do whatever is already there for you… do what’s expected of you of that job.

“But if you are an artist and you have to create something from nothing — there is nothing on this canvas, nothing on this tape, we have to create something that didn’t exist before — that’s ultra-responsibility, super-responsibility isn’t it.”

– Jack White (via Conan O’ Brien)

Traders and investors bear a “creative responsibility” in respect to creating something from nothing… starting with a blank canvas (portfolio) and producing profitable and worthwhile results over time.

This notion reflects the craftsmanship embedded in the investment process… trade selection… methodology and process design…

As an active market participant, do you see yourself as an artist too? How do you embrace the creative responsibility that comes with such?

What's the difference between winning traders and losing traders?

  
  Education
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winners-and-losers1Well, first, there are a few similarities. Both are completely consumed by the idea of trading. The winners as well as losers have committed to doing this, and have no intention of ‘going back’. This same black-and-white mentality was evident in their personal lives too. But what about the differences? Here’s what Williams observed:

The losing traders have unrealistic expectations about the kind of profits they can make, typically shooting too high. They also debate with themselves before taking a trade, and even dwell on a trade well after it’s closed out. But the one big thing Williams noticed about this group was that they paid little attention to money management (i.e. defense).And the winners? This group has an intense focus on money management, and will voluntarily exit a trade if it’s not moving – even if it’s not losing money at that time! There is also very little internal dialogue about trade selection and trade management; this group just takes action instead of suffering analysis paralysis. Finally, the winning traders focused their attention on a small niche in the market or a few techniques, rather than trying to be able to do everything. Hopefully the second description fits you a little better, but if the first one seems a little too familiar, you now at least know how to start getting past that barrier.

Use discipline to eliminate impulse trading

  
  Education
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  • Have a disciplined, detailed trading plan for each trade; i.e., entry, objective, exit, with no changes unless hard data changes. Disciplined money management means intelligent trading allocation and risk management. The overall objective is end-of-year bottom line, not each individual trade.
  • When you have a successful trade, fight the natural tendency to give some of it back.
  • Use a disciplined trade selection system: an organized, systematic process to eliminate impulse or emotional trading.

  • Trade with a plan – not with hope, greed, or fear. Plan where you will get in the market, how much you will risk on the trade, and where you will take your profits.

    • Trading is stressful

      
      Education
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     It certainly can be stressful, and it certainly is stressful for many. It doesn’t have to be, however. Successful traders have a certain mindset. They put little importance on any given trade. Their focus is on the long haul, not short-term gains. They know that if they attend to the aspects of trading that are within their control (i.e., trade selection, entry, risk control, and trade management), the profits will take care of themselves.

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