Today is Thursday December 17th and the market had a little selloff, down to an important trend line support area, 1096.

The price action was a little better today, a little more volume and the movement looked a little better as well. It has been a bit different than normal, the last week or so and with today’s action, I hope things will be getting back to business as usual. The thing about it is, you have the holiday period upon us and that usually throws a wrench into things. Institutional traders usually take this time off, it is to be expected.

This is really not the best time to trade the markets. If you have modest goals, I believe you can still obtain those goals, but the movement has not been present like it has before and to expect something from nothing is only going to lead you to frustration and mistakes. Tone down your expectations of the market. It will change and the price action movements will come back as well, but we will have to wait.

Being patient is part of the game, if you can’t, then you will be blowing through your account at a time when you should be taming down your expectations. Traders really need to hear this right now. The reason I know this is, because I am talking to myself. Part of the reason I write this blog and do what I do, is to give myself an outlet to express what is going on in myself. Those that want to follow, great. Other reasons are to help keep me accountable to myself.

Trading is a very private endeavor, with no-one usually watching you. I try to expose my trading and what I do, to better hold myself accountable and possibly help others along the way. While doing so, I do have the benefit of getting to know traders who were where I was years ago. Sharing my method, skills and experiences allows them a similar opportunity to excel and me the added benefit to have helped someone. The funny thing is when I help someone else, it really comes back to me, helping myself. So, I end up winning all the way around and I do thank God for the opportunity that I find myself in. It has been a blessing to me and now as I share to others.

Back to the market; I did not take any trades again today, but it was encouraging to get a nice email from one of my students from Switzerland, that said, he enjoyed the private session we had, going over the method and strategy. Today he was able to apply some of that insight to his trading where he has had one of his best days. I believe he said that he took 14 trades, which he knew was a lot and I agree, but fine if he has control, and he only had one small loss. He was just trading small, but booked 800 profit out of a pool of 875 before commission.

I was happy to hear it and it makes me feel like I am doing my job, sharing what I know to others to help them meet and beat their trading goals.

To be able to trade for a living, you need to have discipline, it is so important. I have talked about controlling your thoughts and screening what you allow to come to you. If it is not apart of you and your plan, throw it out. If you write it down, then you will remember what it is you are dealing with. All of the idea’s and thoughts that travel through our minds need to have a filter on it. The same reason why some people buy a water filter. They want to take out the bad and only leave the good, to enjoy and add benefits to the body. We need to do the same thing with our mind. Screen out the bad, unproductive, negative, discouraging, thoughts as they come to us. If you write those thoughts down quickly as it comes to you, you will know what it is you are battling against. Far to often, we forget, and are not even aware that we have these kinds of thoughts.

This is the reason why I encourage having a trading journal. You need to be able to identify the thoughts that you have, to first even know if there is a problem. So, start working on it. Keep a journal and write your thoughts down as you are looking at taking a trade,  record your thoughts. If it is easier, get a digital recorder and talk out what you see and why you see it. Tell yourself, why you are going take the trade, if in fact you should take it at all.

This kind of exercises will give you feedback that is invaluable to help yourself discover where you are strong and where you are weak. This is very good information. Those that are serious about their trading future will think about adopting this as a regular exercise.

Trading successfully has two main dimensions, the actual doing or executing the strategies and the mental side of the game which can often prevent you from doing the first one at all. If you know how to trade and what to do, that is great. There is still no guarantee that you will be consistent and make it as a day trader. You need to exercise control over which trades to take and what are you going to do when you have a loss and then again, another loose. Do you know how to handle a situation like that or are you going to do what most traders do, focus on the loose and how you can get it back.

This area, goes so deep, that I can not even begin to cover it in one post, but would need weeks, just on this one subject. Maybe I will expand on the subject, I don’t know. I never know what I am going to talk about any given day. I never plan it and or even think about it until my fingers start typing. So we will see. I will give it some thought and go from there. The subject matter, I know will help many, if I go deeper. Until the next time, over and out!

P.S. I just checked the sentiment numbers, +4% bulls to 52%. That is not good for the bulls, 55% is usually the tipping point, but it could go from here? We are at the highest bull/bear ratio since October 2007, taking the two together bearish sentiment + bullish sentiment. The bearish side is 16.7, smallest number in 5 years +.

Looking more like this market is going to roll over, we will see, but be ready for it, no surprises.