A Strong Trading Mind

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GOLDEN RULES FOR TRADING

Source:Mail from a Friend.

Rule 1: Follow Your Written Trading Plan.
If you didn’t guess that this was the first rule then you haven’t been reading my blog long enough. This is the #1 reason why traders fail. It is human nature to want to vary or break rules and it takes discipline to continue to act in accordance with the established rules.

Write out a plan, even if it’s simple at first, and follow it religiously.

Rule 2: Keep Learning On A Daily Basis.
The markets are changing every single day and the strategies that you may have used 5 years ago might not work now. You need to continue to educate yourself on a daily basis.

Read an article or watch a video tutorial, and overtime you will build a huge knowledge base that is fundamental to successful trading.

Rule 3: Don’t Let Losses Compound.
Per your trading plan you should already know when and where you will cut your losses. Whether it’s a technical failure or percentage move doesn’t matter as long as you have something in place to mitigate risk.

Some traders have an even lower tolerance for loss than you might have which is fine. The key point here is to have set points (stop loss) within the limits of your tolerance for loss.

Rule 4: Never Set A Price Target.
Hear me out on this. Don’t set a price target and automatically get out of good trades. If you are long a Call and the stock hits your “target” don’t just automatically exit! Let profits run wild. Place a trailing stop loss order and see how high it can go from there after locking in gains.

Realistically, I can never pick tops and neither can you so why exit? Never feel a stock has risen too high too quickly (or fallen too low too quickly either).

Rule 5: Master One Strategy At A Time.
Never jump from one trading style to another. Master one style and strategy first rather than becoming average at several. Focus and work hard to completely understand every angle, abnormality, risk, reward of say Credit Spreads and then move on to Iron Condors.

Don’t be a jack of all trades when it comes to options trading until you have experience.

Rule 6: Listen To The Charts (My Favorite).
In case you didn’t already know, you cannot affect the market. Sorry, but you just can’t. Praying, pleading, and even giving up your 1st born son won’t even help. So stop hoping and wishing already!

Everything is reflected in the price and volume when it comes to technical analysis – this is why I favor it over any other system. Master the charts and let them guide you.

Rule 7: Don’t Make Excuses, I Have No Pity!
We live in a period of time where there is limitless opportunity to build massive wealth. The wealth of information and training online today about trading is incredible – and for the most part free.

I don’t pity anyone who gives me an excuse as to why they are not successful! Work hard now and the reward will be great at the end of the day.

Rule 8: Stop The “Analysis Paralysis”
Start trading more often and stop analyzing the markets to death. Now of course don’t take this over board and become a day trader right. The point here is that you set up a system and continue to make trades – even if they are small trades (1 or 2 contracts at a time).

Most people just analyze and analyze but never get in! How are you ever going to learn? Start small but keep trading. If you learn to master trading with only a few shares, then trading a couple hundred or thousand shares will be much more successful.

Rule 9: Walk Away From The Computer.
My own personal morning routine includes this element and it’s essential for clearing your mind. Successful trading isn’t solely about trading – it’s also about being emotionally and physically strong.

Reduce the stress every day by taking time off the computer and working on other areas of your life – especially family. A stressed out trader will not make it in the long run.

Rule 10: Be An Above-Average Trader.
We all trade for 2 simple reasons: Money and Freedom. In order to succeed in any market you need to set your expectations high. Don’t settle for mediocrity.

Stay motivated and set realistic and achievable goals that continue to take you to the next level. And finally, ask for help from others, get a coach, or join a trading forum to keep you accountable

 

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It is not too late to revive your dream. Do not allow fear, failure, frustration, lack of money, discouragement, sickness, pain, or any temporary setback to kill your dream. You are bigger than any of these things. Take courage!

Believe that you can use any stumbling block as a stepping stone to a better life. Ask yourself ~ who can you count on? Who must you count out? Reassess, regroup, change your strategies. Come back with a vengeance! Resolve that failure is not an option. Keep looking up and moving forward. You can make it happen. You have GREATNESS within you!

Les Brown

 

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Keep it real! Stop lying to yourself. Look yourself in the mirror and say..."I am not running away anymore...from my dreams or the life that I deserve." I can live more, love, more, do more, and achieve far beyond what I've done so far. Act as if you have nothing to lose and everything to gain! Run toward your GREATEST life ever! You Deserve!

Les Brown

 

[tryszu]

"I believe that before you get anywhere substantial as a trader, you really have to flush your ego down the toilet and embrace the pain of feeling like a fool, no matter how much it hurts. Most people cannot do this. They may want to, they may talk like they can do it, but they can't. You know how some people talk and talk and you know that talk is all it is, no matter what they say? When it comes to embracing the pain, that's the barrier right there. Most people are WEAK, plain and simple. That's just the way it is. See, what I am saying ADDS UP because it reflects the real world. To make it as a trader you have to be strong, mentally, emotionally and maybe even physically. So why do most people experience long run failure at trading? At the root of it, because they are weak. Period.

So the only real secret is to always treat yourself like a beginner and always be on that hunt for clarity. Thinking is the key whether you have a few rules or a truckload of rules, because thinking things all the way through is the only way to establish those connections deep down in the recesses of your mind. Tips won't do it, specific advice won't do it, generalisms won't do it, because no one knows what your flaws really are but you. If I give you advice in area A but your problem is in area X, nothing is solved. If you yourself don't know where your problem is, you can't hone in on it. All I can say is, don't see the rehaul as an admission of failure- or if you do see it that way, don't be afraid to admit it as failure. Creative destruction is vital. Going back to square one- or square seven, or square fifteen, whatever- is a necessary and vital thing to do. That's one reason why so much market specific or technical specific advice on this board is, in the end, a waste of time. You have all these peeps who have never gone deep in their thought process and never embraced the pain. And I don't care if that sounds like Freud, lack of deep knowledge and lack of trial by fire has real world effects on the trading account, period.

So again I say, thinking is hard, admitting your own inadequacy is hard, backing up the truck is hard, embracing the pain is a ***** kitty. But that's the whole point. This stuff will always be tough, if everyone in the human race were strong and smart and disciplined there would be no one to take the crappy jobs. Mediocrity is like a black hole, you have to fight with all your might not to be sucked in by it. You might be close to breaking through, you might be years away yet. But it may help to know that it depends on your knowledge and your curiosity and your strength to persevere, NOT on some magic bullet. " This is an excerpt from a post by Darkhorse.(I cannot find the link). I think it does a good job at summarizing some important aspects of a traders mindset or what it should ideally be..

 

[tryszu]

"I believe that before you get anywhere substantial as a trader, you really have to flush your ego down the toilet and embrace the pain of feeling like a fool, no matter how much it hurts. Most people cannot do this. They may want to, they may talk like they can do it, but they can't. You know how some people talk and talk and you know that talk is all it is, no matter what they say? When it comes to embracing the pain, that's the barrier right there. Most people are WEAK, plain and simple. That's just the way it is. See, what I am saying ADDS UP because it reflects the real world. To make it as a trader you have to be strong, mentally, emotionally and maybe even physically. So why do most people experience long run failure at trading? At the root of it, because they are weak. Period.

So the only real secret is to always treat yourself like a beginner and always be on that hunt for clarity. Thinking is the key whether you have a few rules or a truckload of rules, because thinking things all the way through is the only way to establish those connections deep down in the recesses of your mind. Tips won't do it, specific advice won't do it, generalisms won't do it, because no one knows what your flaws really are but you. If I give you advice in area A but your problem is in area X, nothing is solved. If you yourself don't know where your problem is, you can't hone in on it. All I can say is, don't see the rehaul as an admission of failure- or if you do see it that way, don't be afraid to admit it as failure. Creative destruction is vital. Going back to square one- or square seven, or square fifteen, whatever- is a necessary and vital thing to do. That's one reason why so much market specific or technical specific advice on this board is, in the end, a waste of time. You have all these peeps who have never gone deep in their thought process and never embraced the pain. And I don't care if that sounds like Freud, lack of deep knowledge and lack of trial by fire has real world effects on the trading account, period.

So again I say, thinking is hard, admitting your own inadequacy is hard, backing up the truck is hard, embracing the pain is a ***** kitty. But that's the whole point. This stuff will always be tough, if everyone in the human race were strong and smart and disciplined there would be no one to take the crappy jobs. Mediocrity is like a black hole, you have to fight with all your might not to be sucked in by it. You might be close to breaking through, you might be years away yet. But it may help to know that it depends on your knowledge and your curiosity and your strength to persevere, NOT on some magic bullet. " This is an excerpt from a post by Darkhorse.(I cannot find the link). I think it does a good job at summarizing some important aspects of a traders mindset or what it should ideally be..

 

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Trade Forex Like a Sniper…Not a Machine Gunner

http://www.learntotradethemarket.com/forex-articles/trading-forex-like-a-sniper-not-a-machine-gunner

Excerpts

A sniper in the military has an edge over his or her enemy; their edge is unwavering patience, mastery of their weapon, and the ability to remain consciously in control of their mind and body for long periods of time in high-stress situations. We can apply these same concepts to Forex trading…

Forex trading is very similar…you need a trading edge (weapon), you have to master this edge, you need to develop and maintain rigid self-discipline and control, and you have to execute your edge flawlessly in the face of constant temptation to over-trade and over-leverage. Now, trading is nowhere near as stressful as war, but it still requires conscious control of mind and body.

Those traders who learn to pick and choose their trades wisely, trading like a Forex “sniper”, are typically the ones who succeed long-term, whereas those traders who act like machine-gun traders by shooting at everything they see (trading too much), tend to run out of ammo (money) very quickly and fail to accomplish their goals in the market. Let’s discuss how you can learn to trade like a sniper instead of shooting at everything (taking every trade) that comes your way.

Just like a sniper waits patiently for his or her pre-determined target to come into view; you need to learn how to wait patiently for your pre-defined trading edge to show itself in the market.

Machine-gun trading the lower time frames is not going to do anything but cause you to lose all your ammo or money a lot faster than you think.

If there is one thing that a sniper in the military definitely IS, it’s patient. Patience is like the “magic” ingredient that makes everything work for a sniper in the military, and it is also the “magic” ingredient that you will need to use if you want to become a Forex sniper. Most beginning traders lose money in the markets, and most beginning traders are also anything BUT patient. See the connection here?

There is a tendency for traders to want to “force” the issue of trading by manifesting signals that aren’t really there or by jumping into a signal that has not closed out yet. When it comes to money it is human nature to be impatient, this is otherwise known as greed, but if you don’t learn to become a patient Forex trader, you will never forge the type of overall self-control that it takes to succeed as a Forex trader and become a Forex sniper.

Sniper-like Forex trading breeds confidence and discipline. The more you strive to trade like a sniper and less like a machine-gunner, the more your Forex trading confidence and discipline will improve. This is because you will be rewarded for patience, and as you start to see your patience pay off over time, you will want to maintain it.

It is the initial stages of developing a sniper-like Forex trading mindset that most traders fail at, usually because they do not understand the power of patience and discipline. It tends to feel better to be a machine-gun trader because you feel powerful and “in control”. The problem with this mindset is that you can never control the market, in fact, the more you try to control the Forex market the more it will actually control you. The only thing you CAN control is yourself by learning to trade like a sniper, and if you do this you will significantly increase your chances of success as a Forex trader.

 

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