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Found 13 results

  1. Hi, The Day started, you sit and watch your stocks/indexes and wait for a trade to evolve, sometimes you need to wait for a while, do you have any plan what to do in this time? In the past I used to sit in front of the screens all day long doing nothing waiting for the trade to evolve and watching price action most of the time getting frustrated as everything worked beside my stocks, everything look tradable to me and it won’t be a lie to say that I was drawn to many trades that I should never take, Taking setups that are not yours or are not ready yet is a very common problem in the day trading world, to sit and do nothing ain’t easy I already talked about it more than once, What I do? I like to check my stock list every 30 minutes I open the system at 10:00 checking what is working what not, I ask myself what I can trade and what not, what I would like to see before looking for a trigger, and then wait till 10:30, at this time I check again the list and see if I have anything I can trade build an entry trigger, if I do, I will build a trigger and wait for it, else will set specific points to each stocks, for example: XYZ should make new high before looking for entry trigger, I will place notification on the system for new high, and move on, after I done all the list I will hide system and will make some work, What is work? I will check the graphs of y’day, I will read blogs, I will develop my trading ideas, work on algos, read a book, watch a recorded webinar, I will practice trading, there is a lot of things one can do while waiting, what will help: make the list of task the day before or at the weekend a list of task for the next week, Don’t sit and watch, don’t be a passive trader fill your trading time with productive work so you won’t trade for the sake of trade NO, this will save you many bad trades, the ones that when you summarize your day/week/month you have no idea how you end up in them, If you will fill your trading day with interesting productive work you will become a profitable and more professional trader. Make the odds in your favor Day Trade Eldad Nahmany #tobecomeadaytrader
  2. In the January 30 article we published here on this thread (see above), we touched on a key psychological element of how to make consistent trading profits. Specifically, the article addressed the importance of trend trading in the same direction as the overall market trend, and continuing trading on that side of the trend as long as the trend continues. Then, in our trading blog one day later, we stressed why the most profitable swing traders are those who learn to merely react to the market's price action that is presented to them at any give time, rather than those who attempt to predict the direction of the next move. The substantial broad market rally that came last Friday, which closed out the week on a high note, perfectly confirmed the trader psychology lessons of our previous two posts. When stocks sold off on higher volume ("distribution") last Thursday, January 31, the weak price action was sure to attract some short sellers who keep trying to catch a top, despite the fact the uptrend remains intact. Traders who went ahead and sold short that day quickly got caught with their hands in the cookie jar the following day, as the main stock market indexes gapped about 1% higher on the open and held up throughout the entire day. If you are new to our short to intermediate-term momentum trading system, please be assured we have no problems selling short when our proprietary market timing system indicates the dominant trend has reversed. There were several months just last year when we profited on the short side. However, we simply do not sell short against the prevailing trend when there is a clear and objective "buy" signal in place. Top 2 Reasons We Don't Fight The Trend We'll be really honest with you here. Trying to call a top by entering new short positions when the market is still in a firm technical uptrend is something we have tried to do in the past. Upon doing so, we learned that it hardly ever works. Even in the times when we eventually got it right, it was always after several initial failed attempts, which usually led to a net wash (breakeven result) at best. Perhaps more important than the actual losses sustained from those failed countertrend short selling attempts was the psychological damage done, as it was (and always is) emotionally draining to fight a clearly established trend. It's a bit like trying to swim directly back to shore while stuck in a rip current, rather than swim parallel to the beach until the rip dissipates. Overall, you must realize there is nothing more important to your long-term trading success than protecting capital and preserving confidence. Weakness or lack of discipline in either of these two areas will eventually prevent you from living to trade another day. All these powerful tidbits of knowledge, and many other psychological trading lessons we've learned over the past 11 years, are regularly shared with subscribers of The Wagner Daily end-of-day trading newsletter, and we we proudly display the cumulative trading performance results of our long-term efforts to prove it (Q4 of 2012 will be updated this week). Moving on from the area of trading psychology lessons, let's look at the current technical situation of the benchmark SPDR S&P 500 Index ETF ($SPY), as we ask ourselves, "Can a market continue to rally while in overbought territory?" Since pictures are always more powerful than words, just take a look at the following daily chart of $SPY from the year 2007. Specifically, notice how the ETF held very short-term support of its 10-day moving average for several months before eventually entering into a correction. Note the tight price range throughout the rally, which kept finding support at the rising 10-day moving average on the way up, after pulling back slightly for just 2 to 3 days. There are hundreds of other charts over the years in which we could show the same thing. Therefore, the answer is clearly "yes"...an overbought market can continue to run even higher without a deep pullback. Nevertheless, we are not implying the current market rally will match the chart above, in terms of the percentage gain or length of time, as every market rally is unique. Still, this chart simply serves as a guide and reminder for what could and frequently happens in "overbought" (we use the term quite loosely) markets. Although Friday's action was bullish, and we now have solid unrealized gains in the open ETF and stock swing trade positions in our model portfolio, we continue to trail tight stops in order to reduce risk and lock in gains whenever possible. As regular subscribers should note on the "Open Positions" section of today's report, many protective stops have now placed below their respective 20-day exponential moving average, which should provide near-term support during any pullback in the market.
  3. I had a wild ride in June: balance opened with 2 big gains. Because I was mostly shorting stocks, a week of rising markets plunged me back to break even for the year. Then, finally, blessedly, groking that the markets had turned, I closed shorts and bot long. Barely ended the month with a gain on 4 days of gains. On reflection, I saw that having stops or limits on my orders would have preserved over $1000 of my balance. So, I asked myself, what's behind *not" using these tools? One experience came to mind immediately: trading the market w/o S&L feels "freeer" and more "masterly." S&Ls feel like training wheels! I had some success with S&Ls long ago when I knew I was going to away from daily attention to markets and wanted my holdings to stop out in case the market dropped. That is indeed what the markets did, and I was very happy to have put in those stops while away. My experience with training wheels is that were am annoyance and symbol of many things wrong with my relationship with my dad. When I was 5 or 6, as the first born child, he bought me a bike that fit him! Rather than getting a smaller one, I literally had to grow up to 11 or 12 to be larger enough to ride it. I had brothers (with smaller, kid-sized bikes) riding 2-wheels before I did. I vividly remember the day of no return when I took off those training wheels and mastered the #$^$ thing! Even today, 40 odd years later, I can feel the heat of the blushing and shame (?) that I was that big and old and could not ride. So, clearly, this metaphor doesn't help. I have several options, one of which is to find a therapist and work this thing through. Another, and faster-cheaper option is to change the metaphor. Some come to mind: S&Ls are ... Nets, like those used by high-wire acts. Life preservers, like those worn when white water rafting Air bags, like those that deploy when cars hit things I might work with these. Don't feel any blushing, shame. I WANT to use a life preserver on a white water adventure! I like this one best of the three, also, because rafting is a mix of turbulence I navigate with my actions (some skillful, some not). Should the preserver be needed, it ought to help me stay alive so I can take another trip. Thanks for reading. This has helped. Feng
  4. In this post you are going to be looking into the nature of impulse and fear as the trader is experiencing them. The trader points out two problematic areas of his trading that he is working on. Earlier, he did not know why he was failing to perform. In his observation he is becoming mindful of what he has been blind to. It will also contain archetypal language towards the end that you may not be familiar with. The Trader 1. When what I am trading is not moving, I need to get better at sitting on my hands. Something in me keeps pushing me to pull the trigger -- and it often wins. 2. For every trade, I need to place my stop at the "If the price gets here, I was wrong" location and no closer. If the size of that stop is just too scary, I need to pass on the trade. This is the way he sets his stop. This is my response to this client I think trading live for you is important. Though good for learning methodology, learning psychology does not happen when trading simulated. Different worlds. When risk enters the picture, our hidden assumptions about uncertainty comes to light -- if you're looking for them. In your scheme this is how you are discovering your placement of stops from what I can see. They appear to be a mixture of standard textbook knowledge of stop strategy and your emotional reaction to them. Most traders I work with will create their stops based on a cognitive strategy that pre-sets the level of lose. They are setting their stops as a way to cut losses quickly in trades that go against them. (This is called the Destroyer acting with good awareness). They are doing this because their assumptions are built to create a win to loss ration of 2:1 to 3:1 --thus playing the edge they have in probability. They know probability is on their side, and that there will be losses -- so they are managing the probability that actually does go against them. This sets up stops as more of a standard practice mentality (probably boring for you) than a creative endeavor. My position is that the Destoyer (cut losses quickly) has more dominion that the Creator (what does my intuition or impulse say). If you are producing "scared", this would make it difficult to separate intuition from impulse under trying conditions. "Scared" indicates you are trading with the Orphan being in charge of the trading committee in the mind. The other point is "sitting on hands" as a way to manage impulse. Fear of missing out has already grabbed the brain/mind when this is happening. The important thing here is to trace the impulse back to its arousal phase before the motivation is urging you to act or worse -- acting. It is immensely important to be in a calm, detached, confident state of mind as you move through the process of watching set ups to evaluating set up to committing capital and risk by pulling the trigger. If impulse is there, the biology (at least) needs to be cooled down and a bouncer needs to be at the door of your trading committee that stops any part of the self from corrupting the mindset of calm, detached, confident. Destoyer, Creator, and Bouncer are part of the inner life of this trader based on Jungian archetypes. is learning how use these different parts of th self effectively that defines success in trading. Rande Howell
  5. I get a number of questions from traders. Here is a trader who is discovering a disabling money narrative that has held his trading hostage. Let's take a look. Here is the trader's observation: Attached is the script that we discussed on Wednesday. When I finished writing this I realized that this does not happen every time, just most of the time. There are times that I calmly enter and manage the trade without feeling anything close to this level of uncertainty / fear. Let me know what you think. I am really looking forward to interrupting this dis-empowering script. Writing this made me somewhat frustrated that this was happening. I feel hostage by all this. This looks like inconsistency to me! The good news is that I now know what I am dealing with. Now, listen to the script that has been driving much of his trading. Before, this money conversation about uncertainty was outside his threshold of awareness. I want you to see what opens up to the trader as he starts observing and confronting this aspect of his mind. Script up to the point of seeing the flash: Generally from the review I am open to several setups as I am monitoring 5 symbols for trade possibilities. To help with this I set price alerts. To this point I am experiencing very little fear or anxiety. When a price alert goes off I begin closely monitoring the symbol for possible entry. Generally four questions follow: 1) Am I still interested in the setup given the price action that has already occurred? 2) What do I want to see, if anything, from the lower time period? 3) What price to enter? 4) What is my must? In other words, what will I see if my hypothesis is not currently playing out. I begin to feel uncertainty particularly with questions 2 and 3. I often hear things like the following: 1) Do I want to see an L1 failure first for additional trade confirmation? If I want to see the failure and it doesn’t happen then I won’t be in the trade. 2) What price should I take? 3) If I’m wrong how big will the loss be? What will I allow to hold to stay in the trade? Asking these question I begin to feel uncertainty / fear about the trade. I also hear “what if I’m wrong, what if this is a big loser”? With this the uncertainty / fear builds even more. If I decide to take the trade anyway, and with my hand on the mouse, I see the FLASH. This can lead to hesitation, etc….. This flash that he "sees" in his mind is actually the firing of an automatic fear response to uncertainty. From the flash there is an emotional cascade that hijacks his mind and his thinking becomes corrupted with fear of loss. Up to this point, this automatic response to uncertainty had been out of his awareness. Now, it is in his awareness, and he can begin to disrupt it and change it. Notice the build up to the flash. This is what has to be disrupted. This is a powerful moment in getting control of his psychology for trading. Based on this trader's AHA moment about the disruption to his good trading practices, what can you learn about your relationship to uncertainty and trading? Rande Howell
  6. Adrienne Toghraie's "Trading on Target" Complete Home Study Course - $650 value. Selling for $149 - Check out eBay auction here: http://www.ebay.com/itm/140732600961?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649
  7. I recently started a series on my blog about the evolution of my trading, beginning with my trading using the eminiwatch method which consists of sine wave cycles on multiple timeframes. When I got rid of all that my results improved quite a bit but there was still one problem - the psychological issues! I would do anything to avoid a loss. And that had to change. So I set out to change my thinking and my beliefs so that I can accept small losses and keep them small. It's not easy to do and I had a small relapse yesterday but overall I'm making a lot of progress. I've been writing about all this and I'd love to get some feedback on it. I've been journaling it as I go and my results are improving daily. So I hope you will find it useful. The series starts here: A look back on my journey - Part 1
  8. The biggest leap forward in my trading came when I began to think like a trader. This important realization was a result of training my brain to think in terms of probabilities. The best book hands down (for me at least) that helped me think this way was Trading in the Zone by Mark Douglas. Thinking in probabilities did a lot more for me than just help analyze my trades. It allowed me to trade with more confidence because I knew the likely statistical outcome of a series of trades. (As a side note you can see what I do each night as part of my nightly homework here). I’d like to pull from some of Mark Douglas’s work in this post to help you better understand how to think like a trader. Think in Sample Sizes Looking at the markets in terms of probabilities is extremely important, both to help you understand your edge and to calm your emotions from trade to trade. I like to think in sample sizes of 20 trades. I am not looking at my profit/loss for the day or week; rather I am monitoring my p/l for the last 20 trades. Each trade you make is simply one of thousands of trades that you will make over the course of your trading. If you keep this in mind and limit your risk on every trade then mentally there is no need to fret over one or two losing trades, or even a string of losing trades. Monitor your last 20 trades. What is your worst string of 20 trades? What is your best string of 20 trades? The numbers may surprise you. Eliminate the Emotional Risk Thinking in terms of probabilities also helps remove the emotional risk of trading. Mark Douglas talks about the 5 Fundamental Truths, they are as follows… 1. Anything can happen 2. You don’t need to know what is going to happen next in order to make money 3. There is a random distribution between wins and losses for any given set of variables that define an edge 4. An edge is nothing more than an indication of a higher probability of one thing happening over another 5. Every moment in the market is unique When you train your mind to think in this way, the emotional stress and fear of pulling the trigger diminish. You become less concerned with the outcome of each individual trade and more concerned with how it fits into the larger statistical set. Become an Observer Think about how objective we are when observing the markets with no money on the line. This is the state of mind we are looking to create throughout the entire trade. Win, lose, or scratch. One exercise I find useful is to visualize yourself standing just behind yourself, watching over your shoulder as you trade. Does this trade meet your entry criteria? Is this a trade taken out of boredom? Are you sure you want to break your rules? These are some questions the observing self would ask your conscious self. Once you’ve identified your edge, practice executing your trades the same way, each and every time. Use this observer exercise to help keep you in check and remain disciplined. The 7 Principles of Consistency Mark Douglas talks about 7 principles which help beginning traders develop into consistent winners over time. The following are his list of guiding principles… 1. I objectively identify my edges 2. I predefine the risk of every trade 3. I completely accept the risk or I am willing to let go of the trade 4. I act on my edges without reservation or hesitation 5. I pay myself as the market makes money available to me 6. I continually monitor my susceptibility for making errors 7. I understand the absolute necessity of these principles. I never violate them. So to think like a trader means to think in terms of probabilities, identify your edge, execute your trades the same way each and every time taking every setup that first your criteria and then analyze your trades not individually, but in sample sizes. Doing these things (over time), can help develop a level of consistency trading the markets.
  9. Emotional Intelligence and the Trader’s Mind An Emotional Braking System Failure “I left money on the table yesterday, and I’m not going to leave money on the table this time!” Harry silently declared, “I’ve missed out to many times – I’m going to ride this one and clean up.” Harry could feel the excitement pulsing in his veins – he could hardly contain himself. He pushed beyond his exit point, knowing that this one was going up. What a rush! Harry could feel the surge of energy. He almost became giddy as he saw the numbers climb even higher. That triggered even more excitement as he thought, “I’ve hooked a big one – I’ll show them who’s a trader!” In the blink of an eye, without explanation, the numbers began to drop. Harry kept waiting for the downward spiral to right itself. It didn’t. Harry moved the stop because he knew in his gut that it would go back up again. It didn’t. Finally Harry pulled the trigger and accepted that he had another draw down on his trading account. He felt frustrated because, in his irrational exuberance (some would call it greed), and he let a perfectly good trade go bad. He had sabotaged himself yet again. Now Harry felt shame and wondered, “What made me think that I could trade for a living?” You Trade Your Psychology What happened to Harry? How did he get suckered into bad trading practices? From the sidelines, it is easy to say that Harry neglected to trade his plan. This assertion misses one big point about humans (and particularly the ones who trade) – emotions rule mind. Out of your emotional states comes the kind and quality of the thinking of which you are capable. In Harry’s case the state of mind that he needed to trade effectively was swept away by a fear of missing out. Once this fear triggered and accelerated, his thinking became clouded and his rational evaluation process was blown out of the water. Like many traders, Harry did not have the skill sets to keep his emotions regulated as he entered the trade. Consequently, a guy who had diligently done his charting and was ready for the trading day got ambushed by unseen forces. His trading plan did not also include a psychological plan for managing emotions. This was a big mistake for Harry and for many traders. And until he learns how to make visible the unseen forces that hijacked his rational mind, his trading will suffer. The problem is age old. Since the rise of Descartes’ rationalism, people (traders included) have attempted to separate body (emotions) and mind. Today, even Western medical science is concluding that this separation is impossible. The mind and the body (emotions) are woven together life a garment. They are inseparable. Maintaining awareness of your emotional nature as a trader is, in fact, the first step to developing a peak performance state of mind specifically for trading. Before this is explored, let’s take a look at what just happened to Harry. The Anatomy of a State of Mind Hijacking Harry experienced the trap of an undisciplined trader’s mind. As he moved into the trade, he was not attuned to what his hardwired and primitive emotional brain was biased to sense – nor how to manage the impulse. He did not notice the excitement of emotional arousal of the hunt that evolution had programmed into him. The thrill of the hunt (and its companion – the fear of missing out) was mobilizing Harry to pursue the prey before it could get away. From a resting place where a calm, observant state of mind prevailed, Harry began to pursue the “hunt”, not noticing that his thinking was being compromised. (Remember, thinking is emotional state dependent.) The arousal of conquest or greed came to dominate his mind. He could no longer think rationally. Then he pursued his “prey”, consumed by the passion of taking no prisoners. In this emotional stupor, Harry overtraded and lost. This trait of Harry’s (a single minded pursuit of winning big and being the best) had served Harry well in many areas of his life. It had helped him achieve many goals in his life, particularly in his career before trading. What he was beginning to recognize was that it did not serve him well as a trader though. What is different about trading? Peak Performance and States of Arousal In this discussion we are focusing on the component of an emotion called arousal. Arousal is preparation for action that happens in your body as an emotion prepares us for action. Powerful levels of adrenaline and cortisol are pumped into Harry’s body as he becomes excited by the trade. That excitement, as the arousal increases, becomes fixated on the object of pursuit – bringing down the home run trade. This is called a high arousal and is a great component to some peak performance states of mind – particularly ones that more physical exertion and less cognitive functioning. Foot ball would be a good example of where peak performance demands high levels of arousal and reliance on instinct that has been trained into the athlete. A peak performance trading state of mind requires low arousal. Impartiality, discernment, dispassion, and calm states of mind are the emotional components sought after for trading success. This is because cognitive functioning is what is necessary for trading peak performance, rather than physical exertion. The moment that high arousal states become apparent in trading, the trading has lost his capacity to take a step back emotionally and think impartially. You can be passionate about trading, but you cannot be passionate while trading. Managing Arousal Until a trader learns how to manage their emotional arousal levels, trying to use the mind to manage emotions often creates more (not less) stress and fixation. As an example imagine a chocoholic attempting to talk themselves out of wanting the warm fudge just coming out of the aromatic oven. The more you try to talk yourself out of the fixation, the more you want the chocolate. The arousal has already kicked started the desire to acquire. Fortunately our breathing is both automatic and volitional – this is key to emotional regulation. If let on automatic, your breathing style will accelerate the arousal of an emotion as it triggers. In Harry’s case, his fear of missing out lead to the arousal of pursuit based on greed. He both held his breath and he then would breathe rapidly and shallowly. This excited breathing style accelerated his heart to beat faster adding to the excitement. The emotion greed and its motivation to grab all the profit he could, then took over Harry’s capacity to think impartially. And out of this emotional state, his thinking became compromised which lead to his over trading. It did not have to be this way. Breathing is both automatic and volitional. With training, Harry has learned how to stay in a calm, impartial state of mind, in part, by managing the kind of breathing he does throughout a trading day. Once he understood that peak performance trading requires low arousal state of mind, he began using diaphragmatic breathing to manage his emotions while trading. He has much better control of his overtrading. He does not wait to feel arousal kick in. Instead, Harry using diaphragmatic breathing to help kept his emotions in check. The moment he senses the triggering of arousal, he volitionally uses his breathing to cut off the gasoline supply to the fire of the aroused emotion. Rather than fear of missing out, greed, or a desire to pursue hijacking his mental faculties, he now is consciously able to calm the excitatory process of the emotional brain. Having learned how to manage the levels of adrenaline and cortisol in his body by managing breathing style, he is much less reactive in the management of his trading days. Harry now maintains a calm, impartial, and disciplined state of mind from which to trade. In the process, Harry has learned how to change himself. His focus is on developing the skills and tools that allow him to trade at peak performance levels. And to let go of habitual historical practices that hinder his progress. His first step was becoming aware of the power that breathing has over emotional nature to influence states of mind. Other steps to lead to peak performance states of mind will be explained in the coming posts. Stay tuned. Rande Howell MEd, LPC
  10. This is often discussed question. For me the answer is proper trader's mindset is more important than particular trading method. The reason for that is that during my trading career I met many successful people as well as those who tried and failed. I also myself failed many times before became more or less consistent. All consistently winning traders I know have their own style. Some use pure price action, some add volume to that, some extremely successful people use stochastic indicator, others use CCI... There are those who use all together as well. They only have one thing in common: they know their style like their own hand and they are very disciplined in following it correctly, so they can be called true professionals. From the other side, most of consistent losers have the habit of trying new methods again, again and again. I was not an exclusion from the rule. I tried nearly every trading method I could find on the Net, read about in the book or buy from some vendor. Some I tried more than once, some more than 5 times... I was running in circles so to say, looking for Holy Grail. Until realized that it must be not the method issue and Einstein was right when said, "Insanity: doing the same thing over and over again and expecting different results." I was trying different methods, but basically did the same thing over and over again by trying a trading method, getting a loss or a couple, dropping it and trying to find another... What changed it, was a little of self-analysis, which made it clearly obvious: the problem is my wrong mindset. It is plain wrong to look for a miracle, which would make you huge profits, would preferably not make big losses and be mechanical enough to follow it easily right from the start. Sounds like a trader's dream, huh? Well, yes. So when I realized that all I need is take ANY forex trading method I more or less like and practice it with DISCIPLINE, situation suddenly started to improve. And funny, but the more I practice one single method, the better results become. Percent of losses really decreases, winners really become bigger and it becomes easier and easier to follow rules... The moral of the story: if you want your dream to come true, do not look for a grail somewhere outside you, better put all efforts into becoming the true ace professional yourself... The only way to make your career easy is follow the seemingly hard way of deliberate practice and training... But I must tell you, it is much less painful than consistent losing for years. Believe me, I've been there...
  11. Most recently purchased 20,000 shares of General Electric (GE) at $17.44. Got caught holding overnight, and the next day was their day to report quarterly earnings. Coupled with the foreclosure debacle, GE Q3 earnings coming in under and the DOW misbehaving that day, the GE stock tumbled well below $16.00 now leaving me somewhere in the negative $28,000 area. The question I now ask myself... Should I sell at a loss and move forward? How long will it take for GE to bounce back to around $17.44 from around $16 and change? Also, half the stock was purchased on Margin from TD Ameritrade. So there is about $35 per day in interest adding up. Any ideas from anyone? what would you do? Chris/NJ
  12. . If you really are interested in getting enlightened, one way would be to go off to Tibet, crawl in a cave, and sit there meditating for thirty years. Another equally good way – but much, much faster – is to trade the S&P. (Bill Williams) Motivated by Frank's excellent MIP thread, I'm initiating this thread to explore Larry Phillips' Zen and the Art of Poker. A lot of smart stuff has been posted on message boards, and much of it has been lost, not because it has literally been deleted (though that is sometimes the case), but because it has been forgotten. People move on, they quit, they die, and it's important to pass the good stuff on so that those who read it when it was posted aren't the only ones who benefit. Years ago, a guy named William posted the rules from Phillips' book one by one in order to encourage reflection and discussion, and this is my purpose as well. I'm not going to post all the rules because, as I said to William at the time, not all of them are as clearly applicable to trading as others. But you will see how very applicable to trading many of these rules are. There's been quite a lot of editing here. William edited the rules himself, and I've edited William's elaborations to some degree. Keeping that in mind, the bold entries are from Phillips' book and the rest, unless otherwise attributed, are William's. I'll post the rules one at a time, and I encourage those who are interested to read each one, think about it, and post those thoughts here. This thread may then become a means by which traders may grow.
  13. This is mostly based around stocks and trading breakouts, but I think it can carry over to the YM and ES. Anyways, I figured I'd share my thoughts. Yesterday was basically a kick in the ass for my bottom line. Fortunately for me, I've been through those days and I know how crazy a FOMC announcement can be. Unlike a lot of people, I kept my cool and did what I do best - look for potential opportunities. I knew the FOMC announcement would cause volatility, and I knew newbies would be getting killed left and right. My job? Jump in when they think all is over, and steal some more of their money. I quickly reviewed my weekly support and resistance levels for the ES, and watched them closely after the FOMC announcement. In typical FOMC fashion, the ES rallied, followed by a sell off - then another rally. Fortunately, my weekly level of 1330-1335 held it's ground. With the inverted hammer on the 5 min, I opened up my put position. I bought several July $132s & $2.32 a piece. They are now trading over $4 a piece - you do the math. Here is a chart for you savvy traders... Why do I post this? Well from time to time I like to read responses to several blogs I find entertaining. One of those blogs happens to http://www.optionaddict.net I like his style - which is very similar to mine - and his tone is entertaining to read. I never read the responses because, well frankly I don't care. I know it's full of newbies asking stupid shit that I've heard a million times on other boards. But today was different, his blog was about keeping to your plan and blablabla. As you've already figured out I didn't do anything yesterday but keep my cool and do what I would do any other day. Positions that no longer worked, I got out. Positions that still worked, I stayed in and weathered the storm, that's part of the job. My job is to manage losing money. Can you do that and stay calm? Here are some of the responses I have read that were interesting. They go running to this guy to hold their hand. If they just looked over their plan, and had a solid risk management system in place, then they wouldn't need someone to hold their hand. I'm willing to bet these people have too much invested in this particular position, and don't have any sort of risk parameters outlined. I would even go as far as to say they don't know why they are in the position... Like this guy... He got stopped out of positions with small gains.. but others with large losses. How does that work? Obviously he doesn't have his risk properly outlined. You should never even consider risking more than you can make. Think that through first. Sometimes things change and you need to exit early, but if you find that you get stopped out with small gains and big losses, something is wrong. It's not the markets fault, it's yours, pal. Been there, done that. I've done more than just turn off my computer and walk away. Sometimes that works, but after over a year and a half of trading I've started to realize that doesn't do anything but clear your head. When you turn off the computer and walk away when the going gets rough, you miss out on some of the best opportunities available to you. For example my ES short from yesterday, if I walked away because I hated seeing the big red number in bold I would have missed that entry. So if you're new, that's fine. Just make sure you exit everything then walk away. Just realize what you could be missing out on. When I first started, I could really relate to that. Except that the pain wouldn't leave the next day, I'd usually be down another grand because I did something stupid trying to rescue all of my positions. This is a continuation of the post above... He pretty much hit the nail on the head. When it feels like everything sucks, don't walk away. Instead, review your charts, go over your weekly or daily plan, and figure out what needs to be done. Just like you would any other day. Look for new opportunities. If you walk away you rob yourself from invaluable learning experiences called screen time. The more you see, the more experience you get, the better you will become. You can't make a living out of this if you can't handle the occasional fuck up. Everyone sees charts differently, and everyone has a different style of trading. That's why in the long run, running to someone to hold your hand won't work. You have to trade the way you see it, not the way someone else see's it. Of course you can ask them their opinions, but at the end of the day it's what you see that matters. Don't even let me tell you how much money I've lost because of what someone else saw. If you don't see the pattern, or it doesn't fit your style, move on. There are countless opportunities every single day, look for the ones that suite you, not some random guy you've never met. Lesson of the day? Stick to your plan. If you can't handle the stress of your current style of trading, then move onto the next style. There is nothing wrong with that, no loss in dignity.
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