What did we do differently on those successful occasions?
* I have planned the trade well in advance with research; it is not a spontaneous trade, so I’ve had time to think clearly about what I want to do.
* I have a clear profit target in mind based on research and refuse to waver from that target unless the market takes me out with a predefined stop. I consider myself a person of integrity, so I tell myself that I have to show integrity and loyalty to my trade idea and target;
* I don’t follow the position tick for tick. Either the trade will hit my target or it will hit my stop. I make a conscious effort to let go and not micromanage the trade;
* I keep myself calm and clearly focused by purposely getting up from my chair, doing some stretches, breathing deeply, and getting away from the screen. I keep myself in a state that is incompatible with anxiety;
* I rehearse constructive self-talk during the trade. I tell myself that I’ve done my preparation and established my edge. Any individual trade can go against me, but if I take all the good trades I can, eventually I’ll benefit from good odds and a good risk-reward ratio. If I lose money on the trade, I’ll figure out why and what that might be telling me about the current market. (more…)
Archives of “trades” tag
rssPsychological Mindset!
Approach the market like a robot. Emotionless and effective!”
Understand your maximum loss
Understand it’s OK to take a loss
Don’t become emotionally attached to your trades
Take adequate position sizes
Be in total control
Your psychological mindset is one of the most important ingredients to your success in the market.
Be disciplined and you will put yourself ahead of the majority of other traders/investors.
Two Trading Plan for Traders
The Trading Plan comes first and should account for the following parameters: 1. Entering a trade. 2. Exiting a trade. 3. Stop Placement. 4. Position Sizing. 5. Money Management. 6. What to Trade. 7. Trading Time Frames. 8. Back Testing. 9. Performance Review. 10. Risk vs. Reward. The Game Plan consists of putting the parameters of the Trading Plan to work in day to day trading with the following benefits: 1. It will force the trader to select a trading style. 2. It will encourage market study. 3. It will aide in helping pick the correct trades. 4. It will prepare the trader for what the market has to offer. 5. It will help in properly monitoring and exiting trades. 6. It will keep the trader from overtrading. 7. It will help with finances. 8. It will keep the trader focused. 9. It will take the gambling out of trading. 10. It will make a better trader out of you. |
Trade Your Plan
Trading is a journey and a competitive activity. Why would you not plan your trades? Are you relying on someone else to plan them for you? Are you thinking there is something magical about the markets and all you have to do is click the mouse or call your broker and money flows into your account? If any of these are true, you are setting yourself up for failure.
Make a plan. This plan is what resonates with your brain structure, trading personality and money attitudes. Make it as simple as possible and then trade it consistently, day after day. If the plan is not working, change it until you get one that works for you. If it is working and generating profits for you, keep it. Don’t try to fatten it up, give it more bells and whistles or get greedy with it. If it’s broken, fix it and if it isn’t then leave it alone. Keep it simple and keep going with it.
Look at your plan every night after the market close. Write down how it worked for you that day and then contemplate and write down how you will use it the next day. In your nightly preparations and your preparations before the market opens, review your plan, Ensure that you are ready to execute, that you know what you are going to do, when you are going to do it, and then just do it—then execute ruthlessly. This is one way to empower yourself and grow in confidence as a trader. Winning in the markets, sports, business and life is about superior positioning, planning, reviewing, reworking, and executing over and over again until you get it right in a way that is seamlessly competent.
Trading, Gambling, Praying
Intuition is not free
If you are thinking about exiting, it is too late. You are praying at that point. If it is in your plan for your targets to get hit, up or down, continue what you are doing. If you are just hoping your stop does not get hit, on behalf of the market, thank you. I am making the assumption that those who post or say that their stop is going to get hit have discretion in their system. The problem is not this trade it is the hundreds or thousands you will take after that. There is a reason you wanted to get it, that is intuition. If you cannot afford to not make money on a trade, you are fucked anyways.
You lost the lesson too
The market is constantly giving feedback. What happens after the “my stop is going to get hit” statement? What if the market goes in your direction? Are you going to get out at breakeven? Let it run? Take a small lost/gain? What are you going to do next time? The time after that? The outcome will affect your decision. The outcome you remember best will be the one that gives you the best psychological reward not financial rewards. Trading is about answers, not questions. Unanswered question impedes reactions and forces decisions. Decisions are bad over the long term.
Get out already (more…)
Mastering Impulse and Fear
The Trader/Subscriber
1. When what I am trading is not moving, I need to get better at sitting on my hands. Something in me keeps pushing me to pull the trigger — and it often wins.
2. For every trade, I need to place my stop at the “If the price gets here, I was wrong” location and no closer. If the size of that stop is just too scary, I need to pass on the trade. This is the way he sets his stop.
This is our response to this Subscriber
I think trading live for you is important. Though good for learning methodology, learning psychology does not happen when trading simulated. Different worlds. When risk enters the picture, our hidden assumptions about uncertainty comes to light — if you’re looking for them. In your scheme this is how you are discovering your placement of stops from what I can see. They appear to be a mixture of standard textbook knowledge of stop strategy and your emotional reaction to them. (more…)
Why do only 5% of the traders who day-trade end up successful?
Two reasons – #1) Many just want an indicator that is going to reveal the market to them and it is too competitive for that to work.
#2) The vast majority don’t approach the challenge in a way that will work. To a large degree, this isn’t the trader’s fault because most do what they have been taught by scores of “experts”.
Here is what will work. Guaranteed.
1. Never forget that the only thing you want to do is predict that others will buy higher or sell lower in your timeframe.
2. Settle on a strategy (and set of tactics) that suits your personality and thinking patterns.
3. Plan to use your judgment in the midst of making decision and entering trades! You are not a robot and you will never become one. Your brain is going to kick-in with its built-in facility for decision making in uncertain situations. In other words, you won’t be able to stop it from making judgments and compelling you to act so… work with it.
4. Learn to optimize that judgment through simplicity, practice, keeping records and knowing your feelings and emotions.
5. Manage your Psychological Capital (Mental Energy) more carefully than you manage your trades.
The money will follow. Your brain will work, your pattern recognition will work and your plan (a realistic one) will indeed be realized.
3 New Trading Rules
-THE MORE STUBBORN YOU ARE, THE MORE YOU WILL LOSE. THE STOCK MARKET IS ALWAYS RIGHT. -DON’T CHASE STOCKS JUST TO DO A TRADE. AVOID BOREDOM TRADES. IF NO TRADE IS THERE, PASS, AND SOMETIMES DON’T TRADE ANY STOCKS AT ALL. -TRY TO GET IN BEFORE THE HEADLINES INSTEAD OF BUYING THE HEADLINES. Market homework absolutely required to be a success. |
The Right frame of Mind
The psychology of the trader plays a very important role in his trading decisions and style. The best traders keep their sentiments (greed and fear) out of their analysis and decide to trade with clear mind. Follow the advices below and you will notice a great deal of improvement in your trading style.
Never trade when your mind is occupied with other things. Try to be concentrated on the market. Try to feel the market, that is the Market Sentiment. When you feel overwhelmed of the information in your head, take a break. Then come back with clearer mind. Do not be trigger happy with your trades and always have a trading plan. Follow your Forex system with discipline. Apply the rules of Money Management with care. Always mind your loses! Then let the profits come. Stop loss orders are there to save you by yourself. Always use them and never stay on a false trade just to feed your ego. Ego never makes money! Even the best traders are often wrong. But market is always right!
The best traders have the vigilance to realize the market sentiment quickly and ride the market in the right position. Even when they are wrong at first, they quickly change their posiotions when they realize it!
d your ego. Ego never makes money! Even the best traders are often wrong. But market is always right!
The best traders have the vigilance to realize the market sentiment quickly and ride the market in the right position. Even when they are wrong at first, they quickly change their posiotions when they realize it!
Trading Rules: Strategies For Success
1. Divide your trading capital into ten equal risk segments
2. Use a two-step order process
3. Don’t overtrade
4. Never let a profit turn into a loss
5. Trade with the trend
6. If you don’t know what’s going on, don’t do anything
7. Tips don’t make you any money
8. Use the right order to get into the markets
9. Don’t be whimsical about closing out your trades
10. Withdraw a portion of your profits
11. Don’t buy a stock only to obtain a dividend
12. Don’t average your losses
13. Take big profits and small losses
14. Go for the long pull as an outside speculator
15. Sell shorts as often as you go long
16. Don’t buy something because it is low priced
17. Pyramid correctly, if at all
18. Decrease your trading after a series of successes
19. Don’t formulate new opinions during market hours
20. Don’t follow the crowd – they are usually wrong
21. Don’t watch or trade too many markets at once
22. Buy the rumor, sell the fact
23. Take windfall profits when you get them
24. Keep charts current
25. Preserve your capital
26. Nothing new ever occurs in the markets
27. Money cannot be made every day from the markets
28. Back your opinions with cash when they are confirmed by market action
29. Markets are never wrong, opinions often are
30. A good trade is profitable right from the start
31. As long as a market is acting right, don’t rush to take profits
32. Never permit speculative ventures to turn into investments
33. Don’t try to predetermine your profits
34. Never buy a stock because it has a big decline from its previous high, nor sell a stock because it is high priced
35. Become a buyer as soon as a stock makes new highs after a normal reaction
36. The human side of every person is the greatest enemy to successful trading
37. Ban wishful thinking in the markets
38. Big movements take time to develop
39. Don’t be too curious about the reasons behind the moves
40. Look for reasonable profits
41. If you can’t make money trading the leading issues, you aren’t going to make it trading the overall markets
42. Leaders of today may not be the leaders of tomorrow
43. Trade the active stocks and futures
44. Avoid discretionary accounts and partnership trading accounts
45. Bear markets have no supports and bull markets have no resistance
46. The smarter you are, the longer it takes
47. It is harder to get out of a trade than to get into one
48. Don’t talk about what you’re doing in the markets
49. When time is up, markets must reverse
50. Control what you can, manage what you cannot