- 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. (more…)
Archives of “trading session” tag
rssDevelopment of trading expertise
1) Much of performance learning is the cultivation of positive habit patterns – If you have to make efforts to follow trading rules, that is effort not devoted to tracking markets. The key to success is turning rules into habits, so that they can be followed without effort, preserving mental capital for analysis and decision-making.this excellent New Yorker article on Toyota and the notion of kaizen. The path of kaizen is difficult to follow, but it’s a sure path to excellence.
2) The development of new habits opens the door to fresh ways of thinking and behaving – I’ve long noticed that successful traders periodically remake themselves and their trading, adapting to changing market conditions. They cultivate new habits, which aids them in developing new skills and ways of making money.
3) We will learn and perform best by making maximum use of our learning strengths – This is an extension of the notion of operating within a trading niche. If we’re engaged in a concerted program of learning and development, it makes sense to ground our efforts in learning competencies.
4) Performance improvement often occurs in small, continuous steps forward – This is an idea central to quality and performance improvement among manufacturing firms. The successful trader may set a single goal each trading session and track progress faithfully. Over the course of a year, that is hundreds of opportunities missed by the trader who lacks such goals. Take a look at
Just follow these Trading Rules
Stops – a stop price must be in place at all times for all positions.
Balance – this one is the hardest of all to define, but because it is impossible to know with certainty the future direction of the market, a balance between bullish and bearish positions is the most prudent. In addition, if you are heavily weighted either bullish or bearish, and if the market moves strongly in your favor intraday, you should consider taking on a large opposite day-trade position for “insurance” profits in case that intraday move reverses.
Freshness – positions should be regularly refreshed for the sake of updated stops. This is especially important when the market has moved in your direction a meaningful amount so that you can lock in some profits with tighter stops.
Emotional Awareness – use emotional awareness to your advantage, understanding fear often accompanies reversals in your favor and hubris often accompanies reversals against your positions.
Exits – the only acceptable exit is either being stopped out of a position or reaching a target price which has a clear technical rationale, and even in cases of the latter, partial exits are preferable to outright closes. (more…)
Trading Wisdom
We all need to be disciplined along with using good money and risk management skills, yet too much of anything can cause problems. Sometimes we put so much attention on caution to ensure that we only make good trades that we reduce our actions to the point that we miss so many strong trading opportunities. Every time we begin our trading sessions, we need to communicate to ourselves that we will be confident, prepared and most importantly… committed to executing trades when our analysis shows that a good trade is in front of us. Never allow the market, the news, your friends, your past trading session or anything else send you a false signal that causes you to sit back and do nothing when you can easily see from your training that you should execute a trade right now. |
Enthusiasm Brings About A Triumph
The greatest victories in life rarely come from those who are sad, pessimistic or lacking enthusiasm.
When we approach challenges in any area with enthusiasm, we set a new foundation that starts us off on the right foot. This does not automatically happen. We all need to decide that we are going to start changing the way we begin our trading sessions.
Before we jump on our computer and look at our charts and start executing trades, take about 15 minutes to set the tone for this session. Take a few deep breaths, forget about the list of tasks that you have to deal with today, get a piece of paper and write down 1 or 2 items that you will focus on during today’s trades.
Once you have your mind set and your 2 items ready; say out loud “I am ready to trade”. Say this with enthusiasm and then sit down and begin.
You will have a new perspective on today which does not include focusing on the profit results, but instead on the process. Your trading session will have new meaning and you are now set to be triumphant in today’s trades.
25 rules of trading discipline
- 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 cant exceed your biggest winner.
- Develop a methodology and stick with it. dont change methodologies from day to day.
- Be yourself. Dont 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.
- Dont hope and pray. If you do, you will lose. (more…)
Trade Your Plan
“When you see a position that is going against you and the market is dropping, and you are losing money on a trade, but your stop loss hasn’t been hit yet, how do you stay with the position? What is your secret? Do you pullback and look at the big picture or do you simple assume its all noise as long as it doesn’t hit that lower low? This is my biggest problem with tracking your trades and most of the time you are right in holding on.” … Because we thought our answer to his question may be beneficial to other traders as well, we wanted to share our reply to his e-mail, which was… “The key point you stated is ‘but your stop loss hasn’t been hit yet.’ When we put on a trade, it’s like entering into a contract, so we try to stay the course and simply follow the plan. Over the years, we’ve found it’s best to stick with our original analysis because we usually plan a trade at night, or in the pre-market, without the stress of live trading. During the trading session, in the heat of the moment, there is so much pressure that we have to fight the voice in our heads telling us to sell the position when everything around is crumbling. It basically comes down to planning the trade and trading the plan…easier said than done, right? Sometimes, if you have a feeling things are going bad, and you’re an active trader, you can maybe sell 1/4 or 1/3 of the position to ease your mind. However, you must have the discipline to get back in once the coast is clear. Try to lay out a plan, write it on paper, and stick to it. The one thing every trader must accept, in order to be successful, is a loss. You must be fully prepared to lose what you’re risking. Once you accept losses as part of the trading game, the pressure to be right is not so intense. By the way, we at ASR are no different; we fight the same urges to sell that most traders do. It’s a constant battle, that’s for sure!” |
Thinking Can Make Impossible Become Possible
I am sure that all of us have seen the statue of The Thinking Man. It is an amazing sculpture that evokes in individuals many different emotions and ideas.
As a trader, if we are always worrying about what might happen if we do this or do that and if it is wrong that we will lose money, then we will rarely if ever have a successful session.
I submit that if we take time before we begin a trading session to think about all of the correct decisions we will make, all of the good trades we will execute, all of the money management actions that we will adhere to and so much more, then we will be so far ahead of multitudes of other traders.
When we take time to think about what we desire to accomplish and what skill sets we have and how we will put them to use while we trade, when the session is over we will many times be amazed at what we have accomplished.
Don’t begin trading with thoughts of it being impossible to succeed or else your results will match those thoughts. Fill your thoughts with confidence and focus on what you truly desire to happen and then let yourself just go ahead and make it happen.
Day Trading – Trade Reluctance
A problem that plagues all traders from time-to-time, trade reluctance, or the inability to pull the trigger has many causes. Recognizing yourself among the following Trade Reluctance Types can go a long way toward eliminating the problem.
ALARMIST: Characterized by energy being diverted away from placing trades into over-vigilant preparation for low probability catastrophes. Habitual worrying about the worst case scenario.
ANALYSIS PARALYSIS: Characterized by energy being over-invested in analyzing at the expense of executing trades. Preparation for making trades is out of control. Trader is a walking encyclopedia of technical information with little or no profits to show for it.
HYPER-PRO: Characterized by energy being lost due to over-investment in the mannerisms and appearances of success. Energy is expended at the expense of goal-supporting behaviors such as analyzing trade performance or analysis for the next trading session, which is viewed as “demeaning” and “unprofessional,” and/or “shouldn’t be necessary.” Often accompanied by over-stylized use of professional jargon, name-dropping, and a reflexive need to appear better informed and more sophisticated than the “average” trader. (more…)
Not Having a Trading Plan
“If you fail to plan, then you plan to fail”. I don’t know who first said that, but it’s a very sound piece of advise indeed. Planning is something that is all too often overlooked by traders, and yet a well drafted trading plan is one of the most important tools for success and profit.
In talking to struggling traders, I am constantly amazed at not only how many don’t have a trading plan, but how many don’t even know what such a plan is. In fact a trading plan is quite simple, it’s a document that details every aspect of your trading strategy. It is literally a blue-print for your trading methodology.
What should be in this document? Here are the most important areas it should cover: (more…)