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Showing results for tags 'disciplined trader'.
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If you're a new trader, you've got to pay your dues. Seasoned traders know this and that's why we love you so much. Look at your charts, mimic the experts, and buy those expensive trade-recommendation newsletters. Dream your dreams. But PLEASE just keep trading, because as you trade, we'll be on the other side, putting your cash into our pockets. I'm not kidding. So the thing is, you don't want to stay a “new trader” for long. What is a “new trader”? A new trader, the way I refer to it here, is either someone who has just begun trading and has yet to make the mistakes of a beginner, OR someone who keep making the beginner's mistakes over and over again and never learns. Most traders that I've come across over my 22 years as a trader and CTA(3 years as a “new trader” and 19 years as a “seasoned trader”) never got out of the “new trader” category. It's hard to transcend. To some, it's impossible and they wind up walking away blaming the “volatility” or the “institutional traders” for their failure. OK, here's the key to taking the leap from newbee to successful trader: Your mental discipline. The fact is, the beginner who's done his/her homework before trading is (largely) using the same indicators and techniques that the successful trader is using. The difference is that the successful trader is in control. The “new trader” is not. The beginner is controlled by emotions and fears and has not learned… I mean REALLY learned… that trading the market is a math game. It's an exercise in probability and statistics and you must keep the odds on your side, even if, from time to time, it hurts. If you've back-tested your system properly… if you've followed your guru's past recommendations carefully… and you're ready to start trading…then you have one job and that is to follow your system like the IceMan. If, over your chosen period of time, the system is not working, then change the system. Never change your commitment to following your system to the letter once you've decided to trade it. All this is MUCH easier said than done. Fears and emotions can easily overtake you. We're humans, not machines. You must TRAIN your mind to be disciplined. That's what seasoned traders do. They train their minds because they know that habit patterns are simply neuro-pathways that are etched into your brain and when one identifies a poor trading habit (and you know who you are) all that needs be done is to train your mind to create a new neuro-pathway to replace the old one. It's science, man, just science. Good trading system and the mental strength to commit to and execute the signals that system gives you is the way of the seasoned trader. Most seasoned traders won't admit it. Why? Yum, yum! My best, Norman Hallett
Believe it or not, it's true what they say … visualizing your future the way you want it, is much more likely to make that future a reality. I'm a “doubter” by nature and this notion of visualizing didn't really make much sense to me when I heard about it the first hundred times. I mean, come on! Sit in a quiet place and wish and hope and pray and all your dreams will come true? I think not. That's what my mathematician brain told me (University of Cincinnati, 1973, BA Mathematics). Then I met a subconscious trainer (whom I later married), who sat me down and stated, “Thoughts are things.” OK, what kind of things? I've seen Kreskin and other guys bending spoons with their thoughts… it that what she means? Rather than give you the entire exchange of words (I don't know that I remember all of them, as I was falling in love while I was listening), I'll give you the capsule. According to her, there is this stream of consciousness somewhere up there that if you plug into, and by directing your thoughts, you can harness this consciousness somehow to get what you want (as long as what you want is positive… you can't wish someone a losing trade!). This combined with the notion that time, as we know it, is not linear, we can affect the future from the present through this universal consciousness. That's all I'll say about that. Excuse me while I hug a tree. I'm back. I don't know that I understand all of this, let alone believe it, but I'll tell you one thing I DO KNOW… If you get your brain into an alpha brain wave state and you tell yourself (of have someone else suggest to you) what you'd like to happen in the future, say, the picture of you as a successful trader… you will head in the direction of that picture you've created in your head. At least that's what happened to me, and just about every successful trader I know. There are different ways to visualize. During a quiet time (I know you can't imagine any quiet time.. so start while seated in the bathroom), just see yourself living the Life of Riley (am I showing my age) and having people around you recognize you as that successful trader that everybody is talking about. You can move up the effectiveness ladder (get off the pot?) as you get used to the notion of visualization and get more and more affective with your thinking, but the idea is to get started. Once you start creating pictures of the money-bulging-pocketed- successful-trader-you, you will actually become less likely to allow your emotions to lead you to trading mistakes… because “doing the wrong thing”, like pulling your stops when the market comes close, or not taking your profit when your system tells you to, becomes inconsistent with your picture of who you are. Eventually, if you keep up your visualizations, you become that picture. Now THAT makes sense! My best, Norman Hallett
You've done your homework. Countless hours of seeking out the right guru (or piecing together your own system). Weeks of monitoring your guru's daily trade picks (or paper-trading and back-testing your homemade system). You've done it by the book. No seat of the pants trading for you! OK, now you're confident. It's time to put your money where your homework is. You've had your coffee and your first trade signal is before you. Confidence high. Trade made. First loss. Not a problem. You understood before you started that successful traders both win and lose and “losing is part of the overall winning”. You've also heard more then once that “successful traders don't win on every trade.” Moving on, still confident. Next trade made. Another loss, but this one hurt your pride a little because you got stopped out early in the trade, and then the market rebounded and would have hit your profit target if you weren't stopped out. You double check. Yep, you placed the stop where your trading system told you to place it. You kind of had a feeling that the early weakness in the market was just profit-taking from the previous day's trading, but you're trading a system and you must stick to it. Wounded, but resilient. After a good night's sleep and a few mouse clicks, your new daily trades are in front of you. Hey, this one looks good! It's a little bit more risk than yesterday's trades had, but look at that profit potential! With a smiling face, the trade is executed. With a nice start to the trade, you're feeling good and you've moved your stop to breakeven, just like your system said. Surprise piece of news - market reverses - blows through your stop - an “unexpected” loss. Is something wrong with the system? Has the overall market “personality” changed, affecting your system to the Core, rendering all your back-testing irrelevant? Your confidence turns to doubt. You decide to “watch” the next trade… I mean, isn't it wise to make sure the system gets back on track before you “throw good money after bad?” Isn't that what a conservative trader does? Trade watched. It wins! In your head, you beat yourself up a little because you know that when you started your “live” trading, you made an agreement with yourself to take the first 10 trades “no matter what”… and here you wimped-out and missed a big winner that would have gotten you even. What's happening?!! What's happening is that you are out of control. Your emotions are ruling your trading. The above scenario plays out in every trader from time to time.. newbee and veteran alike. The winning trader senses what is happening and nips it in the bud. The winning trader spend time EVERY DAY, working on “the discipline of trading”. Reads a chapter in his favorite psychological trading book, scans the “ten commandments of trading” that hangs on the wall over his/her desk, listens to his/her mental training software for futures traders… Something… Every Day… before trading begins. There are many more losing traders than winning traders… and it's seldom about the trading system. In my career, I've come across at least 50 systems that I consider A+, yet I know for a fact that MOST traders that have traded on these systems have lost. Why? They were not in control of their emotions. Are you? My best, Norman Hallett
There are only a handful of people who give a darn about supplying traders with a way to be more disciplined and focused in their trading. I'm one of them, so I think I know why there are so few of us. Heck, I'm in the business of supplying traders with a tool to help improve the mental side of the trading equation… the “human” element. With (what I think) is such an important service, why am I out here virtually alone? A couple of reasons. First, although most traders will admit that the mental part of trading is key to winning in the long-term, most believe they can “gut it up” and just “shake it off” when negative emotions and behaviors rear their ugly heads. They don't need a shrink. They know what they need to do and by-cracky, they'll do what needs to be done without any help! I call this the Macho Syndrome. So, I get resistance from those that need it most, the emotionally out-of-control trader. Second, a common mindset is that the primary key to being a successful trader is hooking your wagon to a guru or trading system and then following that system to riches. The problem is that all (even great) trading systems experience draw-downs and you wind up blaming the system for losing rather than doing what is painful for some… blaming yourself (for not having the courage to trade through adversity)! So here I am, preaching pain. “It's not your system, it's you!” To the trader with low self-confidence, those words can cut like a knife. “How about paying more attention to the mental/emotional part of trading?” To the trader with low self-esteem, I'd be accusing him/her of having something wrong with him/her. Being the Shepard of the mental/emotional aspect of trading is not an easy job. But it's rewarding. For those who start paying REAL ATTENTION to the mental part of trading, results can improve rapidly. They start saying, “How can I improve as a trader? “How can I make sure that the only variable to losing and winning is my system and not me?” When was the last time you asked yourself these important questions? It's not all about changing your system; tweek, tweek, tweek. My guess is that it's about changing YOU. So, for me, I love what I do. Can anybody hear me? My best, Norman Hallett