10 Trading Thoughts

29 January 2010
1. You only have three choices when you are in a bad position, and it is not hard to figure out what to do:
(1) Get out
(2) Double up, or
(3) Spread it off.
I have always found getting out to be the best of all three choices.
No opinion on the market or you are doubtful about market direction? Then stay out. Remember, when in doubt, stay out.
Don’t ever let anyone know how big your wallet is, and don’t ever let anyone know how small it is either.
If you snooze, you lose. Know your markets, when they trade, and what reports will affect the market price.
The markets will always let you in on the losers; the market’s job is to keep you out of winners. Dump the dogs and ride the winning tide.
Stops are not for sissies.
Plan your trade, then trade your plan. He who fails to plan, plans to fail.
Buy the rumor and sell the fact. Watch for volatility in these situations; it usually marks tops or bottoms in the markets.
Buy low, sell high. Or buy it when nobody wants it, and sell it when everybody has to have it!
It’s okay to lose your shirt, just don’t lose your pants; that is where your wallet is.
One last thought to leave with you. It applies not only to every-day life but to trading the markets as well:
Success is measured not so much by the wealth or position you have gained, but rather by the obstacles you have overcome to succeed!

Trading Psychology

29 January 2010
Are you trading because you want to trade? Consider trading a business not a game.
Are you not trading? This is the opposite of trading too often. You may be so scared
of taking a loss that you avoid trading altogether.
If you get stopped out of several stocks, walk away. Paper trade until the profits return.
Follow the system. Would you be making more money if you followed your trading
signals? Understand why you’re ignoring the signals you receive.
Don’t overtrade. Sometimes the best place for cash is in the bank. You don’t HAVE
to trade.
Learn from mistakes. Review your trades periodically. It’ll uncover bad habits.
Focus on the positive. The loss your suffered today pales to the killing you made last
week.
Ignore profits. If you find yourself getting nervous about a winning trade or making
too much money, then concentrate not on the bottom line but on improving your
trading skills. Get used to making too much money.
Obey your trading signals. Otherwise, what are you trading for? Plan your trade and
trade your plan.
Don’t trade when you’re upset. This also goes for being too excited.
Abandoning a winning system. Don’t become bored with your winning system and
search for new, more exciting ways to lose money

PosPeople that are more likely to find success in trading, or any endeavor, tend to be those who take the initiative. Without that belief in your own ability to take action to insure progress, i.e.: initiative, you will never transition from having a vision — hope –to implementation of a plan to achieve that vision – goal. Your belief and confidence need to get stronger with each step toward the goal. This is what will feed your thought process and attitude.t title here...

People that are more likely to find success in trading, or any endeavor, tend to be those who take the initiative. Without that belief in your own ability to take action to insure progress, i.e.: initiative, you will never transition from having a vision — hope –to implementation of a plan to achieve that vision – goal. Your belief and confidence need to get stronger with each step toward the goal. This is what will feed your thought process and attitude.
The most difficult part of the journey to successful trading is learning the basics thoroughly. You will know you are on your way when each step starts to get easier.
The real secret is understanding how simple trading is. The hard part is getting out of your own way to get to that point.

Four things traders can try to get Success

1.Trust your gut If something looks like crap and smells like crap, then chances are, it is crap. Listen more to your gut to tell you when to cut a loss and move on.

2. Keep it simple If something is working, keep doing it. There aren’t any bonus points for being clever. The money is the same color no matter how you make it. So do the simple things and chip away at the profits. I once had a client who felt he had to do complicated trades in order to make money. Bottom line was, he was wrong. Keeping it simple is the proven strategy for success.

3. Probabilities don’t lie If you’re not carefully tracking the metrics on your trades, you might as well be gambling at a casino. Make it a point to track the data on your trades and study them. That way, you can do more of what’s working and less of what’s not.

4. Avoid speculating and predicting I can’t begin to tell you how many times I see traders blow up their accounts because they try to speculate or predict what’s going to happen in the future. The simple fact is, no one knows. Even the best traders have a winning percentage of around 50 percent. That means successful trading is not about being right, it’s about what you do when you’re wrong. The bottom line is, trade what you see, not what you think

Fatal Flaw No. 1 – Lack of Methodology

Fatal Flaw No. 1 – Lack of Methodology
Fatal Flaw No. 2 – Lack of Discipline
Fatal Flaw No. 3 – Unrealistic Expectations
Fatal Flaw No. 4 – Lack of Patience
Fatal Flaw No. 5 – Lack of Money Management