Archive for the ‘Trading Psychology’ Category

« Older Entries

Improve Trading Performance

Thursday, October 20th, 2011

Today is Thursday October 20, 2011 and want to first post a video of the trading day. I started out a bit rough, with a couple of losses early on as I tried to wake up for the open. I don’t know or think that helped me, but it is what it is.

In the video above, you can see I was a little off in my third series of trades and felt like I was trying a bit to hard. In looking back, I really just needed to relax and not have in my mind making up for yesterdays stop out day.

With that in mind, I did see a big trade brewing and was in it with a market order short, and all was really OK, but it was taking its sweet time before cracking open.  I did allow doubts to creep in and take my big trade away from me for what appears to be no good reason and will be the basis for my discussion and follow up in this series of trading psychology issues that traders face on a daily basis.

I did get the second half of that big move, as the market did move exactly to a “trade to target” that was called. Scaling out along the way made it easier to hold to the bottom and is taking the conservative approach to the move. I did send off a training video to members pointing this all out ahead of time and did continue in the call saying that the bottom would be 1193 in the S&P, followed by a very big move up.  It all came down exactly as described and is a good feeling to see it played out as such.

===============================================================

Our thoughts control our actions as it all starts with a thought. The thought of me trying to make up for losses, did lead me to enter early on some trades here today and that is not a good thing. The market will do what the market does and we as traders need to go with that flow. Forcing trades is trying to impose your will on the markets and will not change anything except create a little frustration and some unwanted loses.

It starts with a thought, the thought to get a better price, the thought to get in early so you don’t miss the move, the thought of making up loses, etc.

If the thoughts are not healthy, then it will produce bad fruit. If on the other hand it is healthy, it will do what it is designed to do, produce gains that are with little struggle.

Day trading should not be mentally strenuous event, but it should be something you enjoy. If it becomes a battle every day, it will soon send a message that there is something wrong and that will send unwanted hidden messages from your brain to your soul, (mind, will and your emotions).

So, when trading and looking for what makes up a good trade, you should be relaxed and not uptight. If you are able to breath and relax and then wait, the move will come to you. You don’t have to go hunting for it. If you miss one, that is OK, the next one will be along shortly.

If you miss a trade, don’t fret about it, as that is the most easiest thing to do. To dwell on something you can not change, you end up creating a stack of emotions that will find its way into your next trade. Again, this started from an unwanted emotion, but that emotion gave birth to the feeling by “thought”. When the thought comes to mind, you will only get in trouble when you act on that thought and be entertained by its lure, especially if it is from a bad tree.

How do you judge if the thought is good or bad?  Well, you need to have trading discernment which can be cultivated over time, but most of the thoughts you will know right away if it is good or bad.

If the thought is telling you to pull your stop, you know that is a bad thought. If it is saying, re-enter the trade and it is your third attempt on forcing the trade your way, that is a bad thought. If you get a hard lock on market direction and miss the easy trades in the opposite direction, you know those are bad thoughts.

We should all be familiar with our weak spots, so if it comes up in a thought, we will be ready to dispel the bad thought and replace it with the truth. This all may sound a little simplistic, but I will tell you, it is some of the most important things you could learn as a trader.

It is so easy to get into a emotional tailspin and not be able to get out of it. We should never allow ourselves to be or get into that kind of position. We have the power to choose. Don’t forget that. We choose all the time to act or not to act, to move or not to move on a trade. In choosing what and when to act, this too comes from thought and should be healthy thoughts that line up with our method to enter the market.

You don’t get rid of negative trading thoughts by not trying to think them, (because you will only think of them more). You overcome them by choosing the truth and keep choosing the truth, until the negative thoughts are drowned out completely, replace by the trading truth as per your method.

If traders want to improve there trading performance, then the above message will be a very good tonic. It is hard, not easy to do the above and it takes first courage to face these kind of issues, but progress is won by doing the hard things. Taking the easy road is the path the masses take. We need to separate ourselves from that group and rise to the top and fulfill our trading dreams, that to starts with a thought.

Trade well, trade committed ! Vince



Tags: ,
Posted in Trading Psychology | No Comments »

Daily Trading Stop Out Point

Wednesday, October 19th, 2011

Today is Wednesday October 19th, 2011;  We saw selling pressure off the recent highs for a second time in two days, and may be a sign short term that we may be in order for a pull back and or pause.

The world is a crazy place right now with so much going on in Europe and uncertainty at every turn, one would wonder why the market would go up in the face of that kind of environment. For some, this is just a reaction rally in the context of a bear market and for others they don’t have a clue. There is still yet another group, those that are open minded to a bigger move in the works in the face of all this craziness. Which one is right? I am leaning on the upside and have been for three weeks now all before this move started. One day at a time.

As day traders, it really does not matter what direction the market goes, but it is a good exercise to take part in.

In today’s trading, I had a stop out day where I just stopped trading. I have a spot where I have to stop and stick with that because if I did not do well enough to hit my daily trading goal, then there is a problem. Usually the problem is with me and not the method or price action. Today it was me and that does happen. I do have some consolation in the fact that it was me but really I am way past that point now, because I have seen the trading method perform in hundreds of sessions with no disappointment. My trades below and then will continue below.

A little after 7 a.m. West Coast, there were three nice easy long trades that would have made things a little easier for me, but I can not complain. I have not had a stop out day in a long time. I did get caught in a bit of chop, but again, it is my responsibility to wait through that and take better trades and I did not. The kicker was my last trade which I just lost it. That told me very clearly, I was off today and my judgment can not be trusted a clear sign that I should stop.

So I roughly have a -4 S&P point deficit for today and that can be made up in another session where things are more in my advantage.

I often think, if I would get up and be ready for the open, I would have the time to scope out the bigger picture much better and have the read time I need to see where things are likely to be going for the session, but I rarely do it.

I start when I am up and awake enough to trade and that has been fine for a long long time. I have my own discipline issues to overcome and getting to sleep early is one of them. I don’t often do it as I just seem to be predisposed to staying up late. I often think what it would be like to live on the East Coast.

In order to really be alert enough for trading and doing all the morning tasks that need to be done before sitting down, I would have to get up around 5 a.m. to be ready for the open at 6:30. If turning in at 12 or 1 is routine, that is not likely to happen.

—————————————————————————————–

Yesterday I was quoting a writer for the early 1900’s James Allen. He is not a trader, but a famous writer. One of his writing’s “As a man Thinkith” has been the inspirations for many of the modern day motivators and life coaches. I quoted a couple of lines from his book yesterday and will continue with that where I left off…… I have done about 5 or 6 sessions now on this and you can look back to recent articles to see the others.

“Not what he wishes and prays for does a man get, but what he justly earns. His wishes and prayers are only gratified and answered when they harmonize with his thoughts and actions. In light of this truth, what then is the meaning of fighting against circumstances?  It means that a man is continually revolting against an effect without, while he is nourishing and preserving its cause in his heart. Men are willing to improve there circumstances but unwilling to improve themselves.”

This is a section I copied from yesterdays post which is from James Allen book and I will continue my comments below.

Our wishes and prayers will only come to pass when they are in line with our dominant thoughts and especially our action. You first need the thought to get the action, so both are needed to get the results. If we are not willing to do what is required of us as traders, what makes us think we deserve the rewards that we seek.

We will only get that which we earn and trading profits are earned just like any other job. It does not come easily as many may think, so you need to be protective, but at the same time don’t choke it to death. You need to relax and give yourself room, but again, don’t let yourself drown, because then you die.

This can summed up in trading discipline. Those that can exercise it, will be around for a long time, pulling resources out of the markets. Those that can’t, I don’t need to explain.

Again, this all starts with thought and the ability to follow the right thought. If you follow and take the easy thoughts, they will likely lead to astray. Trading and doing the right thing at the right time is not easy. Many see what the right thing is, but still have huge blockage to get it done. Why is it like that for traders more often than not?

The reason is they have no mental plan for how they will react to the wrong thoughts. The action is to see that you are being lead astray and stop it. Just stop. Don’t do it, that is the wrong easy trade. The right thing will be hard to do and you will be met with internal opposition. Are you prepared for that?

Succeeding is hard, failure is easy. So you now know you need to do the hard vs easy thing while trading. More to come tomorrow as I will try and get right into it.

Tags: , , ,
Posted in Trading Psychology | No Comments »

As a Trader, Thought and Performance are Equal

Wednesday, October 12th, 2011

Today is Wednesday October 12th, 2011 and we saw another continuation of the powerful rally taking Wall Street by storm.

We added another 10 points on the S&P and another 100 points plus on the Dow. We did end off the highs by about 19 S&P points as the high of the day was 1216, a long way off the low of seven sessions ago.

I can say, that I really don’t think that we will be seeing the recent lows any time soon as the bears in this market are getting killed and expect more of the same over the weeks to come.  Again, a very unpopular opinion right now as many overnight traders have been praying for a pull back so they can get out, but as mentioned yesterday, this is not one of those markets that you could expect normal, as we are currently far from that.

We may see some pull back any time here, but expect it to be short lived, as the power is to the upside. In the face of all that terrible news two weeks ago, many bought into it. Doing so, only sets traders up for big losses. You can not look at the obvious as the money is made in the unconventional thinking and wisdom.

In today’s trading I only took one trade for solid gains of plus +1.50 points/ 2.75 points/ and 6 points on the high of the last trade in the S&P emini’s. The trade below with other signals before and after.

Today, timing was perfect with only two ticks of heat after the trade. That is one way I measure myself, in seeing how much heat I take on after the trade. It is a balancing act, as being early has its benefits, but waiting and coming in after or with solid confirmation also has its own set of benefits.

===========================================================================

Let me pick up where I left off in giving some commentary from the last post and training. If you want to get the background of what I was saying, go the post before this and scroll down the page to the last half and I will pick it up from there.

To find and make a living from day trading or position trading, it is not easy. Common people with a desire of having gold and diamonds, will not easily find it in the earth if they go on a search for them. If it was easily found, it would not be that special, but it is because of its rarity that increases its value.

The same here is true as traders, with few finding there way to profitability on a regular basis. The thing that gets in the way are two things. The trading method one uses, and the traders ability to get it done, no more, no less.

The next portion of that quote, states that if a person or trader for this illustration, will alter his thoughts, then he can change his destiny by the law of cause and effect. It is a powerful paragraph and says so much, one could write several pages just on that point.

James Allen, then quotes a law, “the law of absolute”, which states, that the one who knocks and seeks will find what he is looking for, as he persists in doing do so. That is my paraphrase and all very true.

If you seek, not just looking on the outside, which is necessary as you do need a solid trading method to build upon, but the seeing really needs to go within a trader, to examine why he does what he does and when. The discovery is there, as to the difficulties that face traders across the globe.

The power of the mind is not to be overlooked, but to the contrary, it needs to be harnessed. If you leave it up to chance, you will become a victim and part of some statistic.

You need to go beyond your natural reaction and instinct and look to the unconventional and less popular. It is hard to do the right thing when trading, but it is very easy to pull the trigger all at the wrong time. Again, this is a point to be sure you have. Doing the right thing, is hard to do and most will not or do not do it.

So, why is so hard to do the right thing?  Why is it that most struggle? This is the big question and the solution is in the answer. Everyone has thoughts roaming around in there mind, some are good and some not so. One trader may be faced with financial pressures and trading is his answer to those problems, but what he forgot to factor in is his foundation of thought, as the more you push for it, the less likely you will obtain it.

Trading for riches, with money in mind can cloud your judgment. Striving for the silver bullet that will make all your other issues go away, often times will only add to the problem. The reason, you are focusing on the problem and not relaxed to the point of making sound judgments. You may not really be in a position of taking on the risk, so that causes you to hold back when you should take a solid trade and then later take the less desirable trades that end up in losses as frustration sets in.

It is in our thinking and mental foundation that the changes need to be made. It is hard to give a one size fits all answer as everyone is different and comes to the trading arena with different baggage. Take out the trash and keep it simple. Relax your mind from outside pressures and just do what you know to be right.

The last part of that paragraph it states, that one needs to not give up and keep going as “he that seekith findith and to the one that knockith, the door will be open”.

A trader needs to seek in only two area’s. One to find something that works and that he can build upon. That can teach him how to read price action apart from indicators but those indicators will confirm what he already knows to be true. The next is to look within for the COURAGE to follow that method and the ability to block out all distractions and change his or her daily routine to the point that supports mental strength and concentration to get the end results.

More in my next posting.

Tags: , , ,
Posted in Trading Psychology | No Comments »

As a Trader Thinks So Is He #3

Thursday, October 6th, 2011

Today is October 6th, 2011 as the expected rally on Wall Street continued, taking traders by surprise.

We did hit exactly the high of the outside resistance I mentioned in yesterdays post of S&P 1160 and stopped. I mentioned this number also early on today in a training session for members and showed them why.

Currently we are at the top outside resistance as I describe it and two things are next going to happen. The first one will exhibit a greater degree of bullishness but both are good. If we break over this current level with conviction the next level up is around another 30 S&P points at 1190. At that time a pull back to the current 1160 area will be in order on our confirmed way to higher prices. The next scenario is a pause likely tomorrow, with a range bound day and a pull back Monday and Tuesday to around the 1113 / 1120 area. Followed up by a move back up and over the the current 1160 area to again much higher prices.

Both of those moves are not what traders would have thought three trading days ago, but it exactly what I had in mind. I did say back then in part that the S&P should stay above the 1120 area and it got flushed out during the next trading day, only to zoom past all of those levels to the amazement of many.

Currently, for a confirmed move, it would be to soon to enter, but a move up off the current level would be the early entry move. A second chance on a back fill from the would be break will likely be offered so there is still time either way to get in on the coming move.

I know this may be a shock for many, but what I see currently is the same thing I see in a tick chart of very small size, no different. Again, it is to soon from that stand point to enter, so hold still and wait.

I don’t want to sound like I am giving investment advise, so all of this is just my opinion and everyone should make there own mind up as to future direction. This is my thoughts talking out loud, though very unpopular I feel in good company.

Above is the one trade I took from today for roughly 2 & 3 points. A very easy trade with virtually no draw down and no waiting for things to happen, just the way I like it. As I mentioned yesterday, we need three things to make this work for us, Time, Place, Energy.   Those are the things present in this trade and that is why it worked when it did. It was the right time, it was in the right place or (space) and it had the right amount of stored energy.

There is a reason and it is duplicatable for anyone who can follow, but that is not always that easy. You have to have the right mindset to follow through with what you know to be true and that will take me into where I left off yesterday.

===========================================================================

Two days ago, I started a series of trainings that will be continuous for the near future. The first one was laying the ground work stating that our souls, not spirit is made up of three things. (Mind, Will, Emotions) Those are the things that define us as who we are. We need to get into all of those areas to find out who we are as it relates to our trading and much of that leads us to the second post yesterday which was tied to our thinking.

“As a trader thinks, so is he” is the title of today’s message. This is a term taken from the Bible, Proverbs 23: 7 , which states, “as a man thinkith in his heart, so it he”.  A famous writer, James Allen, picked up on this and wrote a book nearly 100 years ago about the truths of that statement. It is not really a spiritual writing even though spiritual principals are highlighted, but filled with immeasurable truths based on just that one line.

As a man thinks, so is he; is the basic idea, which is all based on the fact that our thoughts determine the outcome of most everything we do. If you feel you are a failure, you will only see defeat. If you see yourself as always making the wrong the trading decisions, then your next trade will be a loss. It is just that simple. The way you see yourself is what you are going to get. Look past what was and look to what will be. There is the answer and the ideal you are seeking.

Let me quote a section from James Allen, “As A Man Thinkith”;

“Only by much search and mining are gold and diamonds obtained, and man can find every truth connected to his being, if he will dig deep into the mind of his soul. That he is the maker of his character, the molder of his life, and the builder of his destiny, he may unerringly prove, if he will watch, control and alter his thoughts, tracing their effect upon himself, upon others and upon his life and circumstances, linking cause and effect by patient practice and investigation. And utilizing his every experience, even the most trivial, everyday occurrence, as a means of obtaining that knowledge of himself, which is understanding, wisdom, power. In this direction, as in no other, is the law absolute that, “He that seeketh, findeth; and to him that knocketh it shall be opened.” For only by patients, practice, and ceaseless importunity can a man enter the door of knowledge”

This says a lot and can write a pages just on what was said above, but let me start and just continue tomorrow where I leave off.

Gold and diamonds are not easily found it take work to uncover those treasurers. It will take work to search within our souls how best to control our minds, our will and our emotions. Anything of value rarely comes easy but this is the necessary search that  James Allen is talking about.

You can find what it will take to follow your trading method, what ever that is for you, if you make a decision to do so. It all starts with a thought and followed up with a decision to follow that thought, and then the will to see it through. Your answers are within you, search for the truth even if it hurts, that is the beginning.

More to come in tomorrows post.

Tags: , , ,
Posted in Trading Psychology | No Comments »

Day Traders, It all Starts with a Thought

Wednesday, October 5th, 2011

Today is October 5th, 2011 as we continued to see follow through in the reversal from yesterdays big move.

In two days, we have retraced back up almost 2/3rds of the declines within the last 6 trading sessions. Current price on the Emini S&P 1135 as more work will need to be done to get things turned around.  For the short term, 1160, is the outside resistance number that will need to be challenged, which is 25 S&P points away. We will likely see some resistance between here and the high mentioned, but if and when we break over the 1160 number will can expect more behind this rally.

In today’s trading, I just took one trade and it is shown below with other potential turns as marked. It was quick, fast and with little struggle with only a tick or two of draw down after entry. That is just the way I like to see it go down and only happens when three things are present. You need to enter at the right time, the right place and with the right amount of energy behind you to move your position. When you have those three in place, you get the prefect trade.

There were plenty of other good trades before this and plenty of good ones after this, but I took the one when I started following the markets that lined up with those three elements mentioned. Only invested about 20 minutes total in following and trading this session.

Day Traders can trade all day long and some of them do, but if you want to come out on top and not have to put yourself through undue amounts of pressure, then taking a few trades and being done is fine. Not all days are this quick and not all days are the points on the light side, but some of them are and by choice most often.

Trading all day is a personal choice, it is just not mine. I want to enjoy the freedom that trading offers and get to do that often. Living in the mountains, I have plenty of recreation and things to do, but its not all about me. Having time to invest in other things and people is a gift I want to continue to expand on.

===========================================================================

Let me shift gears into what I was talking about yesterday and just try and pick it up from where I think I left off.

The thoughts of a day trader is one of the most important things that surround him as he builds up to the point of entering a position. If those thoughts are in line, then many times they will lend itself to much better results, but if those thoughts are off in any way, a different force will tend to take over.

That force will often go unnoticed until it is often to late. Being aware of these facts will better equip you to tackle the challenges of profitability.

So let me go back to my statement, our thoughts will determine our actions and results. That is a very true and real statement. Let me quote a famous author who wrote over 100 years ago in a book called, “As a Man Thinkith”.  This is the basis for much of what I want to talk about in the coming weeks. The full quote is, “As a Man Thinkith in his heart, so is he”.

The author is James Allen and he was and still is very popular. He wrote 20 different works and died at an early age of 48.

This quote is taken from the Bible, Proverbs 23:7 and is the basis for his work. The practical principals transcends religion as that is not anything of which this is about, but getting in harmony with you and your world.

The way you think about yourself has so much to do with the results that play out, it is somewhat self fulfilling. If you see yourself as a struggling trader who just can not seem to get anything right, then you will get exactly that in the end results. To expect something different would almost be odd. You can only rise to the level that which you see yourself becoming and if it is that of a struggling trader who can not get anything right and always seems to get stopped out on your trades, then you will find a way to only enter your trades to line up with getting stopped out.

At that point, many will blame the trading method, or system they are following and look for something else, when the thing they need to do is look within themselves and examine the deep seeded views they hold for themselves and how they see the challenges they currently face.

If you make a choice to change your thinking and do the things that will produce the results that line up with where you are going, then you will find it within yourself to wait and only enter the trade when you know you have the greatest chance to profit.

These statements are in its simplest form and it will take a lot more to uncover where I really want to take you, but this is the basis for what we want to accomplish in the next few weeks.

I will stop here, but pick up exactly where I left off tomorrow. This way, you will have time to first think of what was just said and how it applies to you, the trader that is trying to find his way through all of this.

Let me leave you with this, as a trader,  if you know what to do, when to do it and why you are doing it, then you have that part covered and need to focus on doing just that. Many know the things mentioned above very well, and can not for some reason still bring it together. There are forces that are working against you that you are not aware of and it is not your fault. That is just the way it is for most, so don’t feel like you are alone. There is help and over the next few weeks we will uncover many of those issues to help you recover to top trader status. It all starts with a thought.

Trade well, trade committed, Vince

Tags: , , , ,
Posted in Trading Psychology | No Comments »

Got that Stock Market Turn Wrong

Monday, October 3rd, 2011

Today is October 3rd, 2011;

We saw a sell off of the Wall Street well past my cut off point as recently talked about.The market should have held up above the 1120 area and did not today. Instead, it turned that energy in the opposite direction closing on the lows of the day.

Today is the first day of the trading month and the first day of the new quarter. I don’t get every call right and this one is clear that I did not get right. Losses are apart of the business and it is a little funny in that today I took a loss in own day trading.  I did not stick around for a lot of action today, as I just did not feel in sync. I took two losses back to back, with the first one about 6 ticks and the second one a bit more.

I hit my daily loss limit because the second trade had a much larger stop to it. Seeing the increased volatility, felt I may have needed a little more room, but that was not really the problem.

No excuses, that is the way it is and has to be. I can not rationalize my losses but, I can still share how things went last night and what was the POSSIBLE effect of it.

Last night I was up three times with broken sleep as I had animals on the prowl for my animals. I live in the country and had a very disruptive evening. I won’t carry on as it is just life, living and the way it goes.

I could see my judgment was off and thought it best to just let it go and take the small loss for the day. I don’t like to loose more than 4 S&P points in any one trading day. The volatility is higher these days and I could justify a little higher limit, as my gains have been higher to compensate for that, but I just let it go. Today’s trades below.

As you can see, the indicators did not support my decisions and it shows. The previous turns were pretty clear, but there is always tomorrow. I have not had a loosing day in long time, but not being mentally in charge can take a toll.

I will start sometime this week to cover some issues traders face in the mental side of there venture. I will be quoting a book written some time ago that is not related to trading, but at the same time it is very related.   It is a book that was written in the early 1900 century, but you would be surprised as to its Wisdom as it relates to trading. It is amazing and I will start going through parts of it, little by little.

I plan on starting that in tomorrows session as I think it will be a nice shift to offer more valuable insight into the day trading venture as it relates to why we do what we do and or don’t when we should.

This blog is basically my trading journal and get to write and explore what is predominantly on my mind. These days, I found that re-reading the book was a powerful and insightful experience and thought many of my readers would enjoy some of key quotes from the book and my insight from those quotes.

It very much relates to what we do as traders so much so, that it will help improve your ability to trade effectively no matter what method you trade. So look for some of that special insight in the days to come.

As far as calling this market turn, the momentum is down in the monthly, down in the weekly, down in the daily now with the last day and or two, so for anything to change it has to happen in the daily first and before that, the hourly and so on. So far it is all down.  The market has not yet broken under its recent low in the S&P and the Dow, so from that standpoint, there is still some support there.

I will be looking for market sentiment changes this coming week to see for any extremes. Those numbers will be out on Wednesday morning and may give some insight. As mentioned in yesterdays blog, I am under no illusions that it is all entirely possible to see a massive sell off, as this is October to boot. As day traders though, it really does not mater which way it goes and need to remember that.

Until tomorrow, trade well and committed !

Tags: , , ,
Posted in Trading Psychology | No Comments »

A Day Traders Destiny

Monday, July 25th, 2011

I did not post on Friday, but will put up my trading results for the session. I took only three trades for several points profit on the S&P and was done in a flash, I think it was about 30 minutes. Today, I woke up on the wrong side of the bed, literally and figuratively. I was up several times last night and did not sleep well, my wife is in the S.F. Bay Area, 340 miles south and all of that effected my trading. I still make my daily goal but it took me the better part of the day. My first few trades were off, and my last trades were close to perfect. It was the first trades I was not happy with. The price action was very good early on, as prices were moving back up towards a large gap opening. The trades below.

Today’s Trades; Monday 7-25-11

Friday’s Trades; 7-22-11

All day traders have the ability to choose there fate while trying to fulfill there dreams. That might make it sound like it is easy to achieve success, but it is not for most. There are obstacles in the way for everyone and they are usually all different for each traders. Some may find a general common theme, but the whole composition of what makes up you, is all very different and that makes for very different results for most.

The hidden obstacles have a lot to do with attitude and what you expect. Many like to think they are expecting success, but deep rooted feelings and emotions of fear fill the traders mind. What ever you expect you are working to create it, even if you are not aware of it. Your subconscious mind knows exactly how you feel, even if you don’t. It knows when you are lying to yourself and when you truly believe in yourself and are without trading fear.

Worry is form of negative exception, so if you find yourself worried about this trade or entry, you are working against yourself and will find yourself doing the wrong thing at the wrong time for reasons you are not even aware of. You are just being consistent with your true beliefs and to expect positive results when you are set up negative ones is totally unrealistic.  Put it another way, worry or fear CREATES what you are worried about. A self fulfilling prophesy.

Given the fact that is true, what are you going to do about it?  You have the ability to do just the opposite of the above if you choose to. You have the power to create and establish the environment you are seeking by rearranging your thoughts which will change your actions. Granted, you do have to know what you are doing in the first place.  If you don’t know that, then you are just guessing on what you think is right, but you don’t know it is right. You can not trade by your feelings, just as I so described above, you can see where that will take you.

Assuming that you know how to trade and what you should do, you have the “Con”. A line from the movie, “Crimson Tide”. You have control of the submarine and it is under your command. You tell it to turn, rise to surface level, or dive-dive to escape danger.

So, do you see the importance of all of this. Instead of fighting your worries, push forward with positive expectations that you create and believe. It has to based on something and can’t just be wishful thinking, but I mentioned, once you know what to do, “You Can Do It”.  Ask yourself, what is the worst thing that can happen to me on this trade.  Then, if you can live with that and accept it, without worry or fear, then proceed. If you can’t based on the current conditions, then you wait, plain and simple. You will need discipline to do that, so start exercising your will in your every day life. This will get your “Will” in shape. Just like you go to the gym to exercise your body, you can exercise your will everyday, when you live with purpose.

Don’t just do things for the sake of doing them and accept unknown results, only left to chance; Live your life with purpose, making decisions with purpose, speaking with purpose and not speaking when you shouldn’t. All decisions that you make with a specific goal in mind. That is how you can exercise your level of discipline in everyday live which will get transferred over to your trading life.

Don’t think that you can separate the two, because you can’t and your subconscious mind will know that is not the real you and will revert back to the dominant trait or real you. If you want things to change, you have to be determined to change them and that is change with purpose.

I will end it here for now, but so much more to say, stay tuned as I try and continue with this is the days ahead.

Trade well, trade committed !

Tags: , ,
Posted in Trading Psychology | No Comments »

Trade the Process, Day Trading Dreams & Money will follow

Saturday, March 19th, 2011

Today is Saturday, March 19th and this post is for Friday”s market when we saw the markets push up and move back towards the middle of the recent range. I believe there is more to go as we could easily see 15 S&P points more before the market has to make another directional decision.

In Friday’s S&P trading, there was a large jump with the market working back towards the trading gap most of the day.

In my personal trading, I did well, to finish out a five week long wining streak where I saw a minimum daily trading goal or better during that time. My trades for Friday are below.

These trades do not happen by accident or chance and or luck. There is no way someone could have 5 weeks of daily gains and there not be something to it, (all posted in my blogs). If you flipped a coin, how many times do you think you could guess the right side. That is chance, luck or gambling. You may not have any idea on what may turn up next with that model.

That is not the case here. This can be learned if one has the desire, passion and will to do so. That is the point of separation for many, as putting in the work, time and focus, for a greater purpose is what it is all about and the point where many give up trying.

When it gets tough, that is where and when you need to fight back, but not with force, but with precision  and purpose. If you know what you want and you have an idea on how to get it, but don’t have a plan or trading method to approach it, then you need help.

It is a hard thing to ask for help. I found that out for myself, but it took years and years to figure it out. I never bought a program, method, system or anything of the such in all my years pursuing my trading dreams and goals. If I had, I may have been able to speed the process up, but I might not be where I am today. I paid a large price for what I now know in the financial markets. It was not easy and when it got very difficult, I could have given up, but I did not.

I waited, when I needed to wait and re-challenged myself where I needed challenging, to find myself coming out the other side. I now see the light and it was worth it. I learned so much in all the years of pursuing my trading dreams. If I took the advise of others to give up and let it go, I would have never made it to where I am today.

I love what I do and I like helping others along the way. It is the best of both worlds. It brings a greater purpose other than just trading for myself and the money.

That brings me to a very big point and I will repeat it a couple of times to make sure everyone reading gets it. This is a big deal when it comes to overcoming the obstacles that traders face.

As traders, “you are in the market to make money, but you can not trade for the money”, did you get that. That might sound like a play on words, but it is very true. Most traders will only become profitable when they don’t need the money and when it is not the biggest issue in their life. Before that, you will have issues and challenges that you may not be able to face. That is, unless someone points them out and that is what I am trying to do here today.

If you are trading for the money, you will bring undue pressure and mind games upon yourself that are much more extreme. Don’t get me wrong, we all trade for the money and anyone who says different, is a liar. Sounds a little harsh, but I can’t apologize, because this is very important.

It is a bit of a dichotomy or paradox, in that, what you are doing is what you are doing, but if you are doing it for the purpose of the end result, money, then you will have bigger problems than someone who is not approaching it from that stand point.

When you chase something so hard, you rarely get it. Let me put it in a way that men can understand. Most traders are men, so I don’t think I am going to offend to many women.

If you are after a woman in a competitive environment, they can tend to sense that and resist the pursuit, but when you seem to be relaxed and portray confidence in who you are, you will attract them and they will come to you.

It is similar to trading in that way. If you pursue the money with a laser beam approach, you will not get it. You are focused on the wrong thing. You, as a day trader, need to focus on the process of doing the right things at the right time, and then the money will follow. You can not have the one you want first. It won’t work that way.

This is very subtle but it is very important and one reason so many struggle in ever finding the gold at the end of the rainbow. A lot of this has to do with the way you think and see things within your subconscious mind.

I know, this can start to get deep. In fact it can get so deep, that traders shy away from it, to the point of realizing the truths that I am writing about and thus, will never see their trading dreams.

So let me repeat the key statement in all of this. Traders are in the market to make money, “Yes”, but you can not trade for the money.

Think about what I said here today. It is deep, but this is the stuff that is hard. Can you face it and come out on top, if you can, then you can make it all the way. Give it some extra thought, good trading to all.

Tags: , , ,
Posted in Trading Psychology | No Comments »

Are You Prepared for Day Trading?

Tuesday, March 15th, 2011

Stock Markets around the world took a dive as everyone looks onto Japan and the situation there.  The Nikkei, ended their Tuesday session down about 11% as Wall Street gaped down and moved lower in sympathy as we see the market coming off there highs looking for value.

We are likely to see increased volatility going forward with good moves on both sides. The Dow and S&P did make a big come back from the lows of the session which was almost -300 at its worst on the Dow and -35 points on the S&P to -138 and -15 respectively.

The Fed came out with a policy notice of leaving rates unchanged and stated that inflation was not a problem at this time. That gave the market added fuel to a already juiced market, as the energy was released back to the upside after the announcement.

In my trading today, I took 4 trades with modest gains on all of them, and would have to give myself a solid grade of (A) in trade execution. A loss does not really effect my own grading much, but a trade that goes outside my trading method definitely does. This grading that I have been doing for myself has been helpful in that I need to be accountable to myself and this is a way for me to do it and write about it. If I want a good grade, like in school, I need to do the right things at the right time and will then get rewarded.  Today’s trades below.

The market was very active early on and felt I needed to lighten up on contract size a touch to allow for a greater stop if I needed it. I didn’t seem to really need it, but the market was moving very fast on the open and the huge gap lower really threw things off from a normal open. That is the largest gap down I can remember seeing in a long time.

I hope and pray they get it together in Japan, because it will have an effect on earnings and the future outlook for the economy here and abroad.

From a humanitarian stand point, it is almost unreal that Japan could get hit with a 9.1 earthquake, the largest in recorded history for that part of the world, then a Tidal Wave wiping out everything in its path, then the reactor/radiation release and today I heard that Tokyo had a 6.4 earthquake and a Volcano had erupted to boot. WOW, that is an enormous amount of tragedy for one week which is not even over yet. We need to pray for relief for the people of Japan and hope that there will be better news coming in the days ahead.

Some of us have Tidal Waves in our lives and need to address those. It could be your trading results that has you down. If you want better for yourself, it first starts with the belief that things can change. If you want things to change, you can make them change. It may take you a month, year or even more, but I truly believe if you want it bad enough and are willing to push yourself farther than you have before, change is inevitable.

Much of a traders results lies in what he or she feels about themselves and their outlook on the ability to get it done. What I mean is, many traders could do better if they would look within themselves for the answers they seek on the screen. If you change your thinking and thus your mind, your results will follow the dominant beliefs that you hold within you. That might sound like a bunch of goop to some, but it may not make sense to you and you may reject that line of thinking as that may be exactly where you find yourself and not wanting to admit it.

We too often, will blame the market for our troubles and any other situation that may be convenient, that keeps us from meeting our trading goals. It is not the market, it is “us”.  I have to include myself in that too, as I have made all the mistakes any trader could make and then some. I speak from experience as I have written the last few years here in my blog. I know what goes through our minds, how we react to market frustrations and what it feels like to loose control of your trading. Been their, done that.

The thing is, traders start live trading far to soon before they are ready too. We all like to think that large draw downs won’t happen to us, but we are only kidding ourselves. To become a doctor, people sacrifice many years of their life and a very high dollar figure on top of that. How many doctors are there in relation to those in the service sector.

It takes a lot of sacrifice and dedication to make it as a trader. If everyone in the medical profession, (doctors) gave up when it was hard or when working their internship, staring at 18-20 hour shifts, how many doctors would we have today. Little to none, as they would have just given up. Before they practice medicine on real people, they put in years of education and sacrifice to have the opportunity and experience the rewards.

The thing is, there is no one watching you or grading your progress and you may decide to graduate yourself before you are really ready. If you have a very large pool of capital and you start with the smallest account size to get the feel for real live trading, then you may be OK as you learn while you are loosing small amounts of money, but that is not always the way it is for those seeking the rewards of trading for a living.

Another big problem is, traders start out without the right training and think they can do it on their own, only to find out they can’t. At that point it is often to late and trading capital has diminished and with it the opportunity to reach their goals.

I will really try and pick this up in my next post, stay tuned………………….

Tags: , , , , , , ,
Posted in Trading Psychology | No Comments »

Scalp Trading Methods

Monday, January 17th, 2011

1-17-11;

In today’s world of day trading, their is no shortage of traders searching for a successful scalp trading method. To be apart of this group, takes more than most people are willing to invest. Success can mean different things to different people, but to someone who trades, emini futures like the S&P, Dow or NASDAQ, being able to take a few points out of that market on most days, would fit the bill. That is not to say that you won’t have loosing days, it happens, but those losses are small when compared to the overall gains made during the week and months past.

One of the big benefits to being able to trade this way is, limited risk, at all times. Limiting ones risk is really the long term key of making this work. A trader can not let him or herself have a “blow up trading day”. This is when a trader just looses his judgment and makes one mistake after another. The biggest problem is lack of self control. Loosing control is one of, if not the worst mistake a day trader can make, while he is carving out his claim on the investing public.

Loosing control while day trading can be a death blow for your account and for your trading dreams. Traders are forced to face many unseen trading issues far beyond the point of entry and exit. If you do not have a scalp trading method that is in writing, with rules to follow, you can never be assured if you will be able to duplicate your success if you were to ever find it, even if it is temporary success as described above. To often, short term trading success can be very misleading and damaging to the trader who hopes to day trade for a living, if he is not prepared and aware of the unseen dangers.

Short term trading success can give a trader a false sense of security, as they may think they have mastered their trading techniques.  Its only a matter of time, before they start spending the money they made from their trading in their mind. This right here is a real problem. To many traders dwell on the money they can make, writing down figures and sets of figures of all the combination’s and sizes. Their is a place and time for this, but to often, those thoughts turn into unfulfilled dreams. Those unfulfilled dreams then become a problem until itself, because as trading mistakes are made, it only exacerbates the reality that without a well written thought out trading method and accompanying scalp trading techniques, it is never going to happen.

I almost don’t even have to say the rest, because it only gets more painful. The harder you try in the flesh, the worst it gets. Taking action is not the problem, we have all done that, but stepping back and looking in objectively at what the real core issues are, is what is needed. This often never happens, because the work involved is again to steep a price to pay. We may not say that consciously, but subconsciously our minds are working hard, lining up with our dominant thoughts and thinking overall.

If you find yourself saying “I can’t believe I did it again”, you know you have a problem and you need to fix it before you go on. Most traders just ignore this, by trying to justify their actions in some form or another. This is not going to get fixed by itself. You will have to be your own trading coach and really dig deep inside yourself and examine basic thoughts about how you view money and or your lack of it. This gets deep right here, and I would need more time to get into that one, but for the  sake of time, I am will move on.

If you are under-capitalized, this can be adding to the list of issues. It is hard and or nearly impossible to day trade with money you cannot afford to loose. No one likes to think they are going to loose money and no one thinks that it is going to happen to them, until it does. Then, now again, are more issues. You say, “I thought I was ready, I don’t know what happened”.

As mentioned, you likely only had a rough idea in your mind of how you were going to execute your trading strategy, again, with no written plans. If you found success, how are you going to be able to duplicate it going forward, month after month with no blue print to follow. Scalp trading, can be simple, but it is never easy. It can be very rewarding, not only with money, but with time, the time you now have to do other things.

Being able to “Day Trade for a Living” using scalp trading techniques that are proven to be effective over time, no matter the market condition is yet another key. A trending market or a choppy market, it does not matter, because the trader who masters the art of scalp trading is trading a method, not a system.

A trading method allows for changing conditions and a trader can easily adjust for it. A trading system tries to remove the human element from the equation, which it almost rarely ever happens. You become vulnerable to large draw downs and are basically not in control. I could never trade that way. I would be putting my faith in a back tested program that has likely not accounted for all variables. Thus you become a dependent trader instead of a “Independent trader”.

Volumes could be said, just on a few of these topic’s, all of which are so important to making all your trading dreams a reality. In closing, keep your trading dream alive, only by making the hard choices that you know you must take to make it so.

I wish the best for my readers !

Friday’s trades:  Two sets, -1 tick / &  +3 ticks, +7 ticks, +11 ticks  /



Tags: , , , ,
Posted in Trading Psychology | No Comments »

« Older Entries