Why do this? Trading is a challenging business and takes much time to study and learn individual markets and patterns that form within those markets. It also requires that we learn about ourselves to be successful in the business. It is a business where good may not be good enough. Therefore it is imperative that each trader planning on success be organized and willing to put in the extra mile to achieve that.
Doing some planning at the end of each year for the coming year is one of the best tools for the trader putting themselves onto a path of success. First you have a plan and map of what you should be doing. It will outline as many market events/situations as possible and what you do at those times. Trading is a business that requires effort and planning. Complacency is not a quality that will produce an excellent trader.
Take a Professional approach to trading, as a business, because it is a business. All really good traders take this approach. Very difficult to find weak and strong areas of trading if no records are kept. Would you feel comfortable paying a professional that operates on that level? Or a doctor that has not studied what they are doing or a surgeon?
You want to continue improving what you do well and either eliminate or systematically improve the weak areas.
You are where you are and to get to where you want to go, you must have a plan.
For more information on how to create a trade plan visit the Coaching section of our website at www.tradingliveonline.com
Saturday, February 28, 2009
Thursday, February 19, 2009
Why Trade The S&P 500 Emini
I receive questions from traders who have never traded the SP 500 Emini contract before and want to know why trade that market? Most of them have been told by someone that it is extremely dangerous and they should stay away from it.
In my opinion nothing could be further from the truth. We trade the SP 500 Emini everyday in my live trading room at www.tradingliveonline.com. We use specific pattern recognition and usually trade on average 1 - 3 setups per day. Based on the patterns we trade, primarily the AB=CD pattern, we can control our risk and know where we are going to take our profit targets.
We day trade this market so everyone sleeps at night. Since the SP 500 Emini contains as an index 500 large cap stocks it removes the time consuming scanning of inidividual stocks. We don't have to worry about adverse overnight gaps, in fact we use gaps as part of our trading strategy.
For those wanting to learn a solid day trading method using a reliable vehicle i would strongly encourage them to study this market. We give a free trial so any traders interested can come into our trading room and observe our trades and then they can join our community of traders through our monthly subscription service and trade the SP 500 Emini daily.
For more information or questions please contact me at leslie@tradingliveonline.com or visit our website at www.tradingliveonline.com
In my opinion nothing could be further from the truth. We trade the SP 500 Emini everyday in my live trading room at www.tradingliveonline.com. We use specific pattern recognition and usually trade on average 1 - 3 setups per day. Based on the patterns we trade, primarily the AB=CD pattern, we can control our risk and know where we are going to take our profit targets.
We day trade this market so everyone sleeps at night. Since the SP 500 Emini contains as an index 500 large cap stocks it removes the time consuming scanning of inidividual stocks. We don't have to worry about adverse overnight gaps, in fact we use gaps as part of our trading strategy.
For those wanting to learn a solid day trading method using a reliable vehicle i would strongly encourage them to study this market. We give a free trial so any traders interested can come into our trading room and observe our trades and then they can join our community of traders through our monthly subscription service and trade the SP 500 Emini daily.
For more information or questions please contact me at leslie@tradingliveonline.com or visit our website at www.tradingliveonline.com
Sunday, February 8, 2009
Learn from your Losses - Excerpted from 'Essentials of Trading - It's Not HOW You Think, It's What You Think' by Larry Pesavento and Leslie Jouflas, Traders Press.
When you lose - don’t lose the lesson! Great words from the Dalai Lama are just as appropriate on trading. Trading is a journey – not a destination. This journey requires that mistakes will be made. The really great traders are the ones that handle these mistakes efficiently and immediately. Roy L. Longstreet, the legendary soybean trader of the 1950’s and 60’s had a saying, “The first mistake teaches – the second mistake kills”. Learning from that first mistake is so very necessary but learning to not make the second mistake is absolutely crucial.
Here are some examples of the second mistake:
1. Placing a trade that doesn’t work is the first mistake – failing to use a stop is the second mistake.
2. You are under capitalized in trading, that is your first mistake – answering the margin call is your second mistake. Margin calls tell you many things. You are wrong in market direction and you are losing almost everyday.
3. You begin trading with no knowledge or trading plan that is your first mistake – the second mistake is that you continue t trade knowing fully that you do not know what you are doing.
Trading is a business with an easy entry. All you need is money to open your account. No one would buy a business with out first checking it out. Trading is an exception because the magnet is greed, the idea of “easy” money. How much can I make is what most people are thinking of when they enter the markets. If they thought “How much can I lose” the entrants into the markets would be far less!
When you lose - don’t lose the lesson! Great words from the Dalai Lama are just as appropriate on trading. Trading is a journey – not a destination. This journey requires that mistakes will be made. The really great traders are the ones that handle these mistakes efficiently and immediately. Roy L. Longstreet, the legendary soybean trader of the 1950’s and 60’s had a saying, “The first mistake teaches – the second mistake kills”. Learning from that first mistake is so very necessary but learning to not make the second mistake is absolutely crucial.
Here are some examples of the second mistake:
1. Placing a trade that doesn’t work is the first mistake – failing to use a stop is the second mistake.
2. You are under capitalized in trading, that is your first mistake – answering the margin call is your second mistake. Margin calls tell you many things. You are wrong in market direction and you are losing almost everyday.
3. You begin trading with no knowledge or trading plan that is your first mistake – the second mistake is that you continue t trade knowing fully that you do not know what you are doing.
Trading is a business with an easy entry. All you need is money to open your account. No one would buy a business with out first checking it out. Trading is an exception because the magnet is greed, the idea of “easy” money. How much can I make is what most people are thinking of when they enter the markets. If they thought “How much can I lose” the entrants into the markets would be far less!
Thursday, June 12, 2008
Building Correct Trading Habits are Important
Most learning is done through series of many repetitions. Most experts on brain function use a saying "The neurons that fire together, wire together". This means that the actions that we do over and over are having an effect on our learning.
Trading is no different than learning any other task in the sense that we must correctly execute our trades over and over regardless of winning or losing to build strong trading habits. Here is a great motivation on this subject from Motivation Mentor@aol.com
YOU ARE WHAT YOU REPEATEDLY DO
First you make your habits, and then your habits make you.
You become a slave to your constantly repeated acts.
What at first you choose, at last compels.
Your habits are either the best of servants or the worst of masters.
Your thoughts lead you on to a purpose,
your purposes go forth in action.
Your actions form your habits.
Your habits determine your character,
and your character fixes your destiny.
Once in motion, a pattern stays in motion.
Trading is no different than learning any other task in the sense that we must correctly execute our trades over and over regardless of winning or losing to build strong trading habits. Here is a great motivation on this subject from Motivation Mentor@aol.com
YOU ARE WHAT YOU REPEATEDLY DO
First you make your habits, and then your habits make you.
You become a slave to your constantly repeated acts.
What at first you choose, at last compels.
Your habits are either the best of servants or the worst of masters.
Your thoughts lead you on to a purpose,
your purposes go forth in action.
Your actions form your habits.
Your habits determine your character,
and your character fixes your destiny.
Once in motion, a pattern stays in motion.
Thursday, May 8, 2008
Traders Obituary
The following is from my trading friend Kerry Syzmanski, proprietar of www.harmonicedge.com
Trade PsychologyTrader's Obituaryby Kerry Szymanski
It is a sad but simple truth that most people fail at trading the markets for a variety of reasons. Failure to research, formulate and follow a good trading plan is a common theme as is the inability to control emotions. Under capitalization and unrealistic expectations is another.
When you are new or struggling, it is normal to feel some self doubt and fear. There are no guarantees in trading and anything is possible. The most frightening factor in trading, however, may be the potential we have to wreck havoc on ourselves by becoming addicted to a pattern of losing. If we engage in a pattern of behavior that is strongly associated with losing, we will fail.
What pattern can be observed in losing traders? They trade impulsively. Impatience causes them to enter and exit trades prematurely. They either lose focus or become hyper focused. They add to losing positions. They don't book small losses but do book small wins. They get euphoric when they win and depressed when they lose. They risk too much on a single trade and get emotionally involved with the outcome.
Dr. Alexander Elder begins his trading day by saying: "My name is Alex and I'm a loser - I have it within me to do serious damage to my trading account today."
Perhaps this is a bit extreme but I think the basic idea is correct. Especially if we have an addictive personality type and find ourselves repeating destructive patterns simply because they feel familiar or comfortable.
Several years ago one of my trading friends, Leslie Jouflas, suggested a little exercise. It was to write my trading obituary. It sounds a bit morbid but I think it's useful. No one knows what we are doing in our trading rooms better than we do. If you manage to blow out your account, what will the steps be that take you from point A to point B? Take a few minutes to put this down in writing and then place it some place where in your trading room where you can easily review it once a day.
What is the scariest thing in trading? It's the fellow who stares us down in the mirror. If he doesn't do us in, we'll most likely be just fine. I don't keep my obituary posted on the wall anymore, but it's never too far away. Consider writing your own as a reminder of what you must avoid doing to preserve your trading account.
Traders Obituary
Here lies trader Kerry who blew out his account. He allowed himself to lose focus by permitting too many distractions and demands on his time. He traded too many markets, was overconfident and susceptible to trading "highs". This led to over trading and over use of leverage. He failed to control his emotions. Fear caused him to become too bearish and he resisted trading the long side of the market. He failed to take modest profits when offered and effectively manage risk. May he rest in peace.
Thanks Kerry!
Trade PsychologyTrader's Obituaryby Kerry Szymanski
It is a sad but simple truth that most people fail at trading the markets for a variety of reasons. Failure to research, formulate and follow a good trading plan is a common theme as is the inability to control emotions. Under capitalization and unrealistic expectations is another.
When you are new or struggling, it is normal to feel some self doubt and fear. There are no guarantees in trading and anything is possible. The most frightening factor in trading, however, may be the potential we have to wreck havoc on ourselves by becoming addicted to a pattern of losing. If we engage in a pattern of behavior that is strongly associated with losing, we will fail.
What pattern can be observed in losing traders? They trade impulsively. Impatience causes them to enter and exit trades prematurely. They either lose focus or become hyper focused. They add to losing positions. They don't book small losses but do book small wins. They get euphoric when they win and depressed when they lose. They risk too much on a single trade and get emotionally involved with the outcome.
Dr. Alexander Elder begins his trading day by saying: "My name is Alex and I'm a loser - I have it within me to do serious damage to my trading account today."
Perhaps this is a bit extreme but I think the basic idea is correct. Especially if we have an addictive personality type and find ourselves repeating destructive patterns simply because they feel familiar or comfortable.
Several years ago one of my trading friends, Leslie Jouflas, suggested a little exercise. It was to write my trading obituary. It sounds a bit morbid but I think it's useful. No one knows what we are doing in our trading rooms better than we do. If you manage to blow out your account, what will the steps be that take you from point A to point B? Take a few minutes to put this down in writing and then place it some place where in your trading room where you can easily review it once a day.
What is the scariest thing in trading? It's the fellow who stares us down in the mirror. If he doesn't do us in, we'll most likely be just fine. I don't keep my obituary posted on the wall anymore, but it's never too far away. Consider writing your own as a reminder of what you must avoid doing to preserve your trading account.
Traders Obituary
Here lies trader Kerry who blew out his account. He allowed himself to lose focus by permitting too many distractions and demands on his time. He traded too many markets, was overconfident and susceptible to trading "highs". This led to over trading and over use of leverage. He failed to control his emotions. Fear caused him to become too bearish and he resisted trading the long side of the market. He failed to take modest profits when offered and effectively manage risk. May he rest in peace.
Thanks Kerry!
Sunday, April 6, 2008
Las Vegas Style Trading
I was at the dog park recently and chatting with a regular doggie parent. He was telling me that he and his wife had lived in Las Vegas for several years. He then told me of how the gambling fever got him. This reminded me so much of how so many traders get "hooked" on trading.
He said that the first time he gambled he won 'big'. That was enough to do it, he said that it was so "easy". That is so typical of what happens to many traders just coming into the markets. They come in no experience, no research, just an idea that they can win. Sort of crazy isn't it? Then the worse case scenario happens...they win big! Yes, that is the worse case scenario because it seems to anchor into the brain that trading is very easy and there is easy money to be made.
From there it can be a very long, expensive and painful process for the trader to finally realize that trading is not so easy and they need to learn a sound trading methodology that can be applied in a systematic way in order to capture probabilites that do exist in the markets.
It has always been a curiousity to me that this business of trading is so unique in this way. Not a lot of brain surgeons, pilots, CPA'a, engineers, dentists, etc. ever would consider approaching their fields in this manner (not to mention it may be difficult to maintain clients if they did).
If you are coming into trading or have been at it for some time with no success, ask yourself if you are really approaching trading as a business or if you are approaching Las Vegas Style.
He said that the first time he gambled he won 'big'. That was enough to do it, he said that it was so "easy". That is so typical of what happens to many traders just coming into the markets. They come in no experience, no research, just an idea that they can win. Sort of crazy isn't it? Then the worse case scenario happens...they win big! Yes, that is the worse case scenario because it seems to anchor into the brain that trading is very easy and there is easy money to be made.
From there it can be a very long, expensive and painful process for the trader to finally realize that trading is not so easy and they need to learn a sound trading methodology that can be applied in a systematic way in order to capture probabilites that do exist in the markets.
It has always been a curiousity to me that this business of trading is so unique in this way. Not a lot of brain surgeons, pilots, CPA'a, engineers, dentists, etc. ever would consider approaching their fields in this manner (not to mention it may be difficult to maintain clients if they did).
If you are coming into trading or have been at it for some time with no success, ask yourself if you are really approaching trading as a business or if you are approaching Las Vegas Style.
Sunday, March 9, 2008
Anything Worth Having...
"I've missed more than 9000 shots in my career.
I've lost almost 300 games.
26 times, I've been trusted to take the Game Winning Shot and missed.
I've failed over and over and over again in my live.
And that is why I succeed."
Michael Jordan
I've lost almost 300 games.
26 times, I've been trusted to take the Game Winning Shot and missed.
I've failed over and over and over again in my live.
And that is why I succeed."
Michael Jordan
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