Trading In Mind - 10 Ways To Stay Focused
Introduction
Take Two Traders.
Give them the same starting capital, the same trading platform, the same market, and the same trading system with precise rules for entry and exit.
Come back a month later and what will you find?
One trader will be up 20%. The other will be down 40%.
It's fascinating, isn't it, how two people can have the same opportunities in life, and yet get very different results.
I believe that the answer to success lies within each of us; and that we are each completely responsible for our own results in the market.
The following top 10 list was compiled from the many discussions that take place at our regular monthly "traders conferences".
Some of it you'll already know.. some of it will be new.
Hopefully you'll find it useful.
1. Understand The Truth
Trading is a game of probabilities.
Imagine we're flipping a coin. Head I win 1 dollar - tails you win 1 dollar. Simple. Heads and tails comes up 51 times.
You now have a license to print money. Let's call it "Tails Trading System".
All you have to do is sit back and bet on tails forever. Eventually, you'd win all my money (and anyone else's who took you on).
All any trading system gives you is an "edge". A favorable bias. Something that is more likely to happen than not.
Whatever trading system you use.
e.g.
...patern breakouts, trend-following, fibonacci, moving averages, channel following, oscillator signals, bollinger bands, swing trading, opening gaps.
...you're relying on a positive bias. Essentially, the trading system trading is saying "when 'x' happens..'y' usually follows".
Sometimes it doesn't. Most of the time it does.
And all your trading systems are better than others. But don't get caught up on the search for the perfect system...
You know, the traders Nirvana...the elusive "Holy Grail"...the system that delivers profit on demand and never, ever gets it wrong.
Find a trading system that you like. One you feel comfortable with. One you understand.
Then stick with it. Be consistent.
A cool, disciplined, trader will take an average system and make money with it. A nervous, arbitrary trader will take a brilliant system and wreck it.
All traders have "good" days and "bad" days. Some days you'll make small profits. Other days you'll make small losses. And once or twice a month, on average, you'll make big profits. That's how you make money as a traders. It's not 9 till 5.
You MUST see the big picture. Realize that the current trade is only one of many. On that basis, the current trade hardly matters. It's like a piece of plankton in a very large ocean.
Trading is all about managing risk and then surrendering yourself to the oldest law in the universe: The Ancient Law Of Probability.
2. Plan Your Trades, Then Trade Your Plan
Your job as a trader is to follow a trading plan.
And who's going to write this trading plan? You are.
Notice the word "write". It needs to be writen down, on your trading desk, in front of you.
A trading plan must have three parts: Setup, Entry and Exit.
The point is that a trading plan covers every eventuality. You know what to look for in the market, when to get into a trade, and when to get out.
Keep it simple.
Then follow it. Religiously.
Introduction
Take Two Traders.
Give them the same starting capital, the same trading platform, the same market, and the same trading system with precise rules for entry and exit.
Come back a month later and what will you find?
One trader will be up 20%. The other will be down 40%.
It's fascinating, isn't it, how two people can have the same opportunities in life, and yet get very different results.
I believe that the answer to success lies within each of us; and that we are each completely responsible for our own results in the market.
The following top 10 list was compiled from the many discussions that take place at our regular monthly "traders conferences".
Some of it you'll already know.. some of it will be new.
Hopefully you'll find it useful.
1. Understand The Truth
Trading is a game of probabilities.
Imagine we're flipping a coin. Head I win 1 dollar - tails you win 1 dollar. Simple. Heads and tails comes up 51 times.
You now have a license to print money. Let's call it "Tails Trading System".
All you have to do is sit back and bet on tails forever. Eventually, you'd win all my money (and anyone else's who took you on).
All any trading system gives you is an "edge". A favorable bias. Something that is more likely to happen than not.
Whatever trading system you use.
e.g.
...patern breakouts, trend-following, fibonacci, moving averages, channel following, oscillator signals, bollinger bands, swing trading, opening gaps.
...you're relying on a positive bias. Essentially, the trading system trading is saying "when 'x' happens..'y' usually follows".
Sometimes it doesn't. Most of the time it does.
And all your trading systems are better than others. But don't get caught up on the search for the perfect system...
You know, the traders Nirvana...the elusive "Holy Grail"...the system that delivers profit on demand and never, ever gets it wrong.
Find a trading system that you like. One you feel comfortable with. One you understand.
Then stick with it. Be consistent.
A cool, disciplined, trader will take an average system and make money with it. A nervous, arbitrary trader will take a brilliant system and wreck it.
All traders have "good" days and "bad" days. Some days you'll make small profits. Other days you'll make small losses. And once or twice a month, on average, you'll make big profits. That's how you make money as a traders. It's not 9 till 5.
You MUST see the big picture. Realize that the current trade is only one of many. On that basis, the current trade hardly matters. It's like a piece of plankton in a very large ocean.
Trading is all about managing risk and then surrendering yourself to the oldest law in the universe: The Ancient Law Of Probability.
2. Plan Your Trades, Then Trade Your Plan
Your job as a trader is to follow a trading plan.
And who's going to write this trading plan? You are.
Notice the word "write". It needs to be writen down, on your trading desk, in front of you.
A trading plan must have three parts: Setup, Entry and Exit.
The point is that a trading plan covers every eventuality. You know what to look for in the market, when to get into a trade, and when to get out.
Keep it simple.
Then follow it. Religiously.
