For 2010, I will trade CL , will have a look at ZS and glance over TF. I've SIM CL and the result is better than TF ( at least for now).
CL is also better than QM. CL has smoother movement - smooth operator - lubrication oil.....HAHA !
Thursday, 31 December 2009
A New Year and A New Hope
For 2010, I will trade CL , will have a look at ZS and glance over TF. I've SIM CL and the result is better than TF ( at least for now).
CL is also better than QM. CL has smoother movement - smooth operator - lubrication oil.....HAHA !
Tuesday, 15 December 2009
I believe in numbers
OK I have changed my mind... CL is a bigger beast than TF eventhough the margin req is smaller...
I'm new to CL so I need statistic of my CL trading.
I will get this from SIM without losing my arms......
I will SIM CL 20 times,only then I will know the stats..and once I know my CL stats (like I know TF only move 7 times permonth), I will take a real CL trading...
I already knew that Wednesday morning is a danger-zone for CL trading as this is the time a major weekly report released.
I'm new to CL so I need statistic of my CL trading.
I will get this from SIM without losing my arms......
I will SIM CL 20 times,only then I will know the stats..and once I know my CL stats (like I know TF only move 7 times permonth), I will take a real CL trading...
I already knew that Wednesday morning is a danger-zone for CL trading as this is the time a major weekly report released.
Monday, 14 December 2009
Another Orang Minyak
Before this I focus solely to TF chart.
My experience grew but TF move is stagnated.
With TF I know exactly when NOT to trade, so mostly I'm at sideline. When I'm bored I just jump in to the 'red sea'..
So I need something more active to trade, I need to find my match at my current level. "the chemistry" they said...
I heard many bad news from CL, the scary stories...
So I ask my broker the margin requirement of CL....
The asnwer came back : Its lower than TF !
Oh my !
Now I will add CL to my screen.
Yes TF too, at the left side, farrrr.... from my red-button.
Will SIM CL at the moment.. 2 days SIM and then real trades.
(Only real trades teach me something, the SIM just to optimize my indicators of choice for CL)
My experience grew but TF move is stagnated.
With TF I know exactly when NOT to trade, so mostly I'm at sideline. When I'm bored I just jump in to the 'red sea'..
So I need something more active to trade, I need to find my match at my current level. "the chemistry" they said...
I heard many bad news from CL, the scary stories...
So I ask my broker the margin requirement of CL....
The asnwer came back : Its lower than TF !
Oh my !
Now I will add CL to my screen.
Yes TF too, at the left side, farrrr.... from my red-button.
Will SIM CL at the moment.. 2 days SIM and then real trades.
(Only real trades teach me something, the SIM just to optimize my indicators of choice for CL)
Saturday, 5 December 2009
Thursday, 3 December 2009
Spreader, Scalper, Arbitrage
http://fat88trader.blogspot.com/2009/12/us4500000-profit-in-one-minute.html
The concept of spread between cash and future expiration is interesting, and I will reserve it for future study.
Now back to position trading.
The concept of spread between cash and future expiration is interesting, and I will reserve it for future study.
Now back to position trading.
Monday, 30 November 2009
30 Nov 2009 +ve
Small gain, market open with big bang then goes sideways.
my 1 hour adventure today. Wanna sleep......zzzz
Friday, 20 November 2009
Wednesday, 18 November 2009
Saturday, 14 November 2009
Active Session
Seems the active session is during and after lunch, may be it has something to do with no DST ? (Daylight saving time)
Thursday, 12 November 2009
The most important post by Dr Brett :-)
"Managing Your Energy as a Trader"
http://traderfeed.blogspot.com/2009/11/managing-your-energy-as-trader.html
If you lived in a cold climate, you'd never think of leaving your windows open in winter. If your walls had cracks in them, you'd have them sealed; if insulation were missing, you'd have it installed. Why spend money heating your home if the heat is simply going to be dissipated into the cold outdoors? From an energy vantage point, it is inefficient--and expensive.
At a psychological level, energy is one of four components of emotional well-being. The other three are happiness (or joy); contentment (or satisfaction); and affection. (See this post for a more detailed description of well-being; the entire Chapter 3 of The Daily Trading Coach is devoted to well-being and strategies for enhancing well-being).
Without energy, it is difficult to sustain positive emotion. Because much of positive feeling is based upon what we do with our lives, we constrict our potential positive experience when low energy levels rob us of initiative.
Psychologically, we can be like the drafty house with cracks in the windows. We leak energy and lose efficiency. Negative thinking and catastrophizing? A huge energy leak. Lack of physical fitness? Poor diet? More energy out the window. Perfectionism, beating up on ourselves, pressuring ourselves: still more energy lost.
Take a moment to review the post on the laws of psychological energy. People are productive when they are immersed in activities--including ways of thinking and behaving--that *give* energy. When we spend significant time in activities that rob us of energy, we pay a price every bit as dear as that leaky house in winter.
Think about how you coach yourself: how you approach markets, how you reflect on your own trading? Do you energize yourself? Do you sap yourself of energy? Do your life activities outside of markets energize you for your work? Does trading truly energize you?
Or are you a battery that slowly loses its charge, trying to muster the energy to act and wondering why your efforts end unfinished, delayed by procrastination?
So many people live their lives going through the motions, doing the minimum necessary to get by. Their low energy activity doesn't stimulate energy, and so they remain stuck in a low energy state. Others are brimming with initiative: one trader recently told me of grueling days at work, but he was headed for the gym for a brisk workout. He hardly lacked well-being despite a pace that others would find fraught with burnout.
That trader understands one of those psychological laws: expending energy doing the right activities generates energy and sustains well-being.
.
(Dr Brett)
http://traderfeed.blogspot.com/2009/11/managing-your-energy-as-trader.html
If you lived in a cold climate, you'd never think of leaving your windows open in winter. If your walls had cracks in them, you'd have them sealed; if insulation were missing, you'd have it installed. Why spend money heating your home if the heat is simply going to be dissipated into the cold outdoors? From an energy vantage point, it is inefficient--and expensive.
At a psychological level, energy is one of four components of emotional well-being. The other three are happiness (or joy); contentment (or satisfaction); and affection. (See this post for a more detailed description of well-being; the entire Chapter 3 of The Daily Trading Coach is devoted to well-being and strategies for enhancing well-being).
Without energy, it is difficult to sustain positive emotion. Because much of positive feeling is based upon what we do with our lives, we constrict our potential positive experience when low energy levels rob us of initiative.
Psychologically, we can be like the drafty house with cracks in the windows. We leak energy and lose efficiency. Negative thinking and catastrophizing? A huge energy leak. Lack of physical fitness? Poor diet? More energy out the window. Perfectionism, beating up on ourselves, pressuring ourselves: still more energy lost.
Take a moment to review the post on the laws of psychological energy. People are productive when they are immersed in activities--including ways of thinking and behaving--that *give* energy. When we spend significant time in activities that rob us of energy, we pay a price every bit as dear as that leaky house in winter.
Think about how you coach yourself: how you approach markets, how you reflect on your own trading? Do you energize yourself? Do you sap yourself of energy? Do your life activities outside of markets energize you for your work? Does trading truly energize you?
Or are you a battery that slowly loses its charge, trying to muster the energy to act and wondering why your efforts end unfinished, delayed by procrastination?
So many people live their lives going through the motions, doing the minimum necessary to get by. Their low energy activity doesn't stimulate energy, and so they remain stuck in a low energy state. Others are brimming with initiative: one trader recently told me of grueling days at work, but he was headed for the gym for a brisk workout. He hardly lacked well-being despite a pace that others would find fraught with burnout.
That trader understands one of those psychological laws: expending energy doing the right activities generates energy and sustains well-being.
.
(Dr Brett)
Tuesday, 10 November 2009
Pre Veteran Holiday
Friday, 6 November 2009
Sunday, 25 October 2009
Thursday, 15 October 2009
Story - Writing a check before each trade
http://www.traderinterviews.com/content/KindergartenTrading.php
Look Both Ways Before Crossing the Street
I lost a trader today. There's no gentler way to say it. He's gone. This nice man sought my advice many times in the past, sent me regular emails filled with charts and I did my best to give him straight advice. But he emptied his trading account several days ago when the S&P futures ran more than 60 points higher in two trading days. I knew he was probably in trouble: He would regularly send me two or three charts during each trading day, showing me his entries and exits--some winners, some losers.
You see, he had a character flaw and it had been eating at him for several years. He hated being wrong! If the market stopped him out, he'd wait for the smallest indication that it might turn and head back again in the direction he had originally hoped it would head in and then jump back into the fire. There would be days when he would show me three, four, five, six losing trades in a row, all in the same direction. He was certain the market would finally 'get it' and turn around, so he would keep putting his fingers in the fire. And of course, he finally got terribly burnt.
I used to say, 'My momma taught me that trees don't grow to the skies'. But I quit saying that, because I noticed that people that read what I wrote began to say that, and some would say it when they saw large moves. When I used to say it, I meant that it's best to take your profits and get out clean if you find yourself in a 'windfall' profit situation. But suddenly, people were saying it when they were going over charts and looking at a huge run up in a market and were looking for a counter trend entry--which was not the context I had ever applied it in.
I was taught to look both ways when you cross the street and never stop on a rail road crossing; stepping in front of a fast moving car or train can be dangerous to your health! This trader stepped in front of a car, got up, shook his head and then stepped back onto the road and stepped in front of another car. Then he wiped his face on his shirt sleeve, turned around, and without looking, walked onto a train track and got hit square head-on by a fast moving locomotive. And that was the end of his trading capital.
When he gets up in the morning now, he doesn't get to sit in front of his computer and look at the pre-market charts; he eats his breakfast and gets into his car and drives down to the landscaping service he works for. He doesn't get to choose which pitchfork he is going to draw on his S&P chart at 8:45 in the morning; he gets to decide if he wants to use a spade or a pitchfork to dig around the bushes he is caring for that morning. His trading life is over.
The NFA statistics say that more than 90 percent of the retail accounts opened with $10,000 are closed within a year, because the traders that opened them have lost the majority of the money. That's a sobering statistic, but it has been a fairly steady number for years. That tells me that people beginning to trade are not hearing that statistic or they don't believe it applies to them; obviously it applies to all of us. If you don't find a way to control your losses, they will eat you alive!
There are people out there selling course or books that tell you they can teach ANYONE to trade and consistently make money. I'm sorry, it just isn't true. Some people are not built right emotionally to be successful traders, but then, some people are not built right emotionally to be successful writers; and most people are not built right physically to be NBA stars! But many people that try their hands at becoming successful traders are not getting all the help that is available to them.
Always Consider the Consequences of Your Actions
Some people are not built right emotionally to be successful traders, but then, some people are not built right emotionally to be successful writers; and most people are not built right physically to be NBA stars! But many people that try their hands at becoming successful traders are not getting all the help that is available to them.
Public perception is part of the problem: You would amazed to hear how many people think they can read one book or watch one video and then make money trading against the rest of the world, which includes the best traders in the world. Let's face it, there is no 'beginner's league' in trading--we all swim in the same water! I tell people that ask me how difficult it is to become a trader that they should think of it as getting a quality high school and university education.
I don't mean it will take seven or eight years--but they need a solid foundation followed by some deep discovery to find their own trading talents; and then they need to develop their own specialization. Once they have found an area of trading they like and might be good at, they need to master the tools of their trade. And of course, did I mention they need to be adequately funded? I am going to leave the question of the minimum amount in a trading account needed to realistically expect to make a living from your trading for another article, but every person considering trying their hand at trading should realize that the smaller their initial account, the less room for errors they have. And the last thing a new trader needs is the pressure 'not to lose'.
But there are things traders can do to take pressure off themselves, cues they can adopt to help themselves get on a winning run and shorten their losing runs--or at least minimize the effects of their series of losses. In my mentoring sessions, one of the things I teach after getting to know a new student is a set of tools that will force them to limit their losses and equally important, reward themselves when they really have a nice day.
Let me tell you how it works: If you normally risk $150 per contract per trade and you are trading one contract each time you trade, you should be choosing your trades so that they have a risk reward ratio of at least two dollars gained for every dollar risked. This means that on average, if you are risking $150 on every trade, your winning trades should average at least $300 at the end of each month. This is simple bottom line risk reward analysis. If your monthly risk reward is higher than 2:1 and you make winning trades fifty percent of the time, you are well on your way to being a profitable trader--but you're not there yet!
Think Before You Act
Now that we have your risk reward target, we need to talk about maximum sized losses versus maximum sized gains. When I begin to plan out a trade, I use a visual cue that helps me stay within the loss parameters I have set for myself. I view my trading account as a checking account, and when I am planning my trade and filling out my trade sheet [which I always do BEFORE I enter any trade], I literally write a check out in the air, right in front of myself, for the amount, per contract, that the potential trade will cost my trading account IF my stop loss is reached. If the check that I write out is for an amount more than is my maximum acceptable loss on any trade, per contract, I do not take the trade. The act of writing the check out in the air forces me to confront the size of the potential loss before the trade is entered.
And writing this check before each trade is entered has an added benefit: As I write the check, I simply consider that I have just 'spent' that amount, per contract, out of my trading account; I assume that money is gone, even before the trade is entered! Sounds crazy?
By assuming the stop loss money is gone, I have also dealt with any emotions associated with the trade if it turns into a loser: I've already lost that money, right? But if it turns into a winning trade, I not only get the profits I accrue in the trade but I get the initial stop loss money 'check' back as an added bonus! I know it sounds crazy and believe me, when I first started writing out stop loss checks in the air at the proprietary trading room I run in downtown Chicago, the other four traders used to scratch their heads or shrug their shoulders--they thought I was crazy, too.
But after watching me do it for a few weeks, they started doing their own version: One of them literally had checks printed out and he writes out a check while considering a trade; another has a check form built into his trade sheet, so he goes through the same ritual right on his trade sheet. Try it. You might find it helps you limit the size of your losses and also make it easier to deal with your losses.
By assuming the stop loss money is gone, I have also dealt with any emotions associated with the trade if it turns into a loser: I've already lost that money, right? But if it turns into a winning trade, I not only get the profits I accrue in the trade but I get the initial stop loss money 'check' back as an added bonus!
Follow The Rules and You'll Stay Out of Trouble
The next piece I always put in place is simple limits:
1. The maximum amount you are allowed to lose in a day.
2. The maximum amount you are allowed to lose on any trade.
3. The maximum number of losing trades you are allowed in a row in a day before you stop trading.
4. The maximum number of losing trades you are allowed to have in a day before you stop trading.
5. The maximum number of losing trades in the same direction you are allowed to take in a day before you stop trading.
6. If you violate one of your trading rules, you will take XX days off, staying away from the markets entirely.
Sound restrictive to you? It's meant to be restrictive! There should be hard limits on every aspect of your trading. If you start to lose money and it turns into a series of losers, you want hard limits in place so the damage to your account is limited. If you break one of your trading rules, you are either out of control or you are very tired and ragged and badly need an emotional or physical break.
Let's try to fill in those numbers a bit and see how they might look. If you look at your current trading statistics and see that on a good day, you make on average $500, and your maximum loss you take as your initial risk is $150 [per contract and you are currently trading one contract per trade], the numbers might look like this:
1. The maximum amount you are allowed to lose in a day is $900.
2. The maximum amount you are allowed to lose on any single trade is $150.
3. The maximum number of losing trades in a row you are allowed to have in a day before you stop trading is three.
4. The maximum number of losing trades you are allowed to have in a day before you stop trading is five [You may have had a win or two between losses, but there IS a time to stop trading].
5. The maximum number of losing trades in the same direction you are allowed to take in a day before you stop trading is three.
You'll note that the maximum amount you are allowed to lose in a day is considerable larger than if you had three losing trades in a row and lost their maximum amount. This is purposely set higher because there are times when you get unusual slippage OR have a position on and an unusual event occurs, leaving you with a loss much greater than your planned $150. You can adjust these numbers up or down. But the key is to have them in place, written down and in front of you at all times. And NEVER violate them. If you violate them FORCE yourself to take time off from trading.
You'll Be Rewarded For Good Behavior
Now let me add an additionally important piece to this plan: Rewarding yourself! Let's see if we can define some important ways that might underline the positive events in your trading days:
1. If you are up XX on a single trade, you will put a profit floor of XX underneath the current price to protect a portion of those profits.
2. If you are up XX on a single trade, you will take the money and close out the trade.
3. If you are up XX for the day, you will take the rest of the day off, stay away from the trading screens and do something you enjoy doing--other than trading!
4. If you are up XX for the month, you will put a profit floor of XX underneath the month's profits to protect a portion of those profits.
5. If you are up XX for the month, you will take the rest of the month off, stay away from the trading screens and do something you enjoy doing--other than trading! Take a vacation, sleep late and read books, do something fun!
Trading is hard work! When you get it right, it is important to internally recognize that you did something special.
I can't tell you how many traders have experienced this: At the beginning of the day, they take a position in their normal market. Unexpected news comes out and before they know it, they have three times as much in potential profit in this first trade than they have ever made in a single day! They assume the trade will keep running because of the news and watch as it tops out and begins to turn. Because they have never had 'parabolic' profits from news before, they don't realize that sometimes, what goes up fast, comes down just as fast. Before they know it, they find themselves taking 'some' profits out of the trade, but the profit they end up taking is much smaller than their largest profit in a day--this trade becomes the 'big one' got away.
Stop and think about this for a moment. Had they simply taken the stupendous profit and walked away, it would have been marked in their trading memory for life! Instead, the trade will always be remembered by them as 'I almost...' and be a disappointment, even if they made a good deal of money on the trade.
And if they then go on and make more trades that day, they often turn what had been a 'career' type trading day into a flat or losing day. They are so stunned and wrung out from the emotional roller coaster ride of the first trade that they are not capable of trading with their normal discipline. This can be an emotional nightmare for a trader and in many ways, cripple their trading career for life!
Let's see if we can fill in some of those numbers [all assuming you are trading a single contract at a time]:
1. If you are up $1200 on a single trade, you will put a profit floor of $500 underneath the current price to protect a portion of those profits.
2. If you are up $1800 on a single trade, you will take the money and close out the trade.
3. If you are up $2500 for the day, you will take the rest of the day off, stay away from the trading screens and do something you enjoy doing--other than trading!
4. If you are up $15,000 for the month, you will put a profit floor of $5,000 underneath the month's profits to protect a portion of those profits.
5. If you are up $20,000 for the month, you will take the rest of the month off, stay away from the trading screens and do something you enjoy doing--other than trading! Take a vacation, sleep late and read books, do something fun!
I based these numbers on a trader with an average winning trade of $500 per contract, a fifty percent win/loss ratio and again, this trader always only trades one contract at a time. The size of the numbers you come up with may be radically different than what I just wrote down. They are only meant as a starting point for your mental exercise! It should take you several weeks of soul searching before you finalize your first set of 'hard and fast' rules. But you SHOULD have a set of rules written down and on your trading desk where you can see them at all times. You should also always fill out a trade plan BEFORE you enter any trade, and stick to your trade plan without fail! As I noted before, if you violate any of the trading rules, make yourself take a break. If you love trading, having to be away from it should feel terrible! You will avoid being put 'in the penalty box' at all costs!
This trader wasn't in my mentoring program but he conversed with me via email daily--often enough that when a day went by when I didn't get an email from him, I would wonder if he had hit a tough streak or if he had taken a day off. After he had one rough stretch, I emailed him and spelled out the set of rules I suggest to the traders I mentor. He thanked me for them, told me he thought they were a great idea and never mentioned them again.
I lost a trader today. It saddens me to think that I was unable to help him overcome his own internal flaws. I truly did my best to help him, but it wasn't enough. One thing I tell people in my free webcasts, on my websites and in my mentoring programs is this: Your birth certificate does not say 'Trader' on it. If you want to be a consistently successful trader, you have to learn a good deal about the markets and about trading tools; but mostly, you have to learn a great deal about yourself!
To your trading success,
Tim Morge
Look Both Ways Before Crossing the Street
I lost a trader today. There's no gentler way to say it. He's gone. This nice man sought my advice many times in the past, sent me regular emails filled with charts and I did my best to give him straight advice. But he emptied his trading account several days ago when the S&P futures ran more than 60 points higher in two trading days. I knew he was probably in trouble: He would regularly send me two or three charts during each trading day, showing me his entries and exits--some winners, some losers.
You see, he had a character flaw and it had been eating at him for several years. He hated being wrong! If the market stopped him out, he'd wait for the smallest indication that it might turn and head back again in the direction he had originally hoped it would head in and then jump back into the fire. There would be days when he would show me three, four, five, six losing trades in a row, all in the same direction. He was certain the market would finally 'get it' and turn around, so he would keep putting his fingers in the fire. And of course, he finally got terribly burnt.
I used to say, 'My momma taught me that trees don't grow to the skies'. But I quit saying that, because I noticed that people that read what I wrote began to say that, and some would say it when they saw large moves. When I used to say it, I meant that it's best to take your profits and get out clean if you find yourself in a 'windfall' profit situation. But suddenly, people were saying it when they were going over charts and looking at a huge run up in a market and were looking for a counter trend entry--which was not the context I had ever applied it in.
I was taught to look both ways when you cross the street and never stop on a rail road crossing; stepping in front of a fast moving car or train can be dangerous to your health! This trader stepped in front of a car, got up, shook his head and then stepped back onto the road and stepped in front of another car. Then he wiped his face on his shirt sleeve, turned around, and without looking, walked onto a train track and got hit square head-on by a fast moving locomotive. And that was the end of his trading capital.
When he gets up in the morning now, he doesn't get to sit in front of his computer and look at the pre-market charts; he eats his breakfast and gets into his car and drives down to the landscaping service he works for. He doesn't get to choose which pitchfork he is going to draw on his S&P chart at 8:45 in the morning; he gets to decide if he wants to use a spade or a pitchfork to dig around the bushes he is caring for that morning. His trading life is over.
The NFA statistics say that more than 90 percent of the retail accounts opened with $10,000 are closed within a year, because the traders that opened them have lost the majority of the money. That's a sobering statistic, but it has been a fairly steady number for years. That tells me that people beginning to trade are not hearing that statistic or they don't believe it applies to them; obviously it applies to all of us. If you don't find a way to control your losses, they will eat you alive!
There are people out there selling course or books that tell you they can teach ANYONE to trade and consistently make money. I'm sorry, it just isn't true. Some people are not built right emotionally to be successful traders, but then, some people are not built right emotionally to be successful writers; and most people are not built right physically to be NBA stars! But many people that try their hands at becoming successful traders are not getting all the help that is available to them.
Always Consider the Consequences of Your Actions
Some people are not built right emotionally to be successful traders, but then, some people are not built right emotionally to be successful writers; and most people are not built right physically to be NBA stars! But many people that try their hands at becoming successful traders are not getting all the help that is available to them.
Public perception is part of the problem: You would amazed to hear how many people think they can read one book or watch one video and then make money trading against the rest of the world, which includes the best traders in the world. Let's face it, there is no 'beginner's league' in trading--we all swim in the same water! I tell people that ask me how difficult it is to become a trader that they should think of it as getting a quality high school and university education.
I don't mean it will take seven or eight years--but they need a solid foundation followed by some deep discovery to find their own trading talents; and then they need to develop their own specialization. Once they have found an area of trading they like and might be good at, they need to master the tools of their trade. And of course, did I mention they need to be adequately funded? I am going to leave the question of the minimum amount in a trading account needed to realistically expect to make a living from your trading for another article, but every person considering trying their hand at trading should realize that the smaller their initial account, the less room for errors they have. And the last thing a new trader needs is the pressure 'not to lose'.
But there are things traders can do to take pressure off themselves, cues they can adopt to help themselves get on a winning run and shorten their losing runs--or at least minimize the effects of their series of losses. In my mentoring sessions, one of the things I teach after getting to know a new student is a set of tools that will force them to limit their losses and equally important, reward themselves when they really have a nice day.
Let me tell you how it works: If you normally risk $150 per contract per trade and you are trading one contract each time you trade, you should be choosing your trades so that they have a risk reward ratio of at least two dollars gained for every dollar risked. This means that on average, if you are risking $150 on every trade, your winning trades should average at least $300 at the end of each month. This is simple bottom line risk reward analysis. If your monthly risk reward is higher than 2:1 and you make winning trades fifty percent of the time, you are well on your way to being a profitable trader--but you're not there yet!
Think Before You Act
Now that we have your risk reward target, we need to talk about maximum sized losses versus maximum sized gains. When I begin to plan out a trade, I use a visual cue that helps me stay within the loss parameters I have set for myself. I view my trading account as a checking account, and when I am planning my trade and filling out my trade sheet [which I always do BEFORE I enter any trade], I literally write a check out in the air, right in front of myself, for the amount, per contract, that the potential trade will cost my trading account IF my stop loss is reached. If the check that I write out is for an amount more than is my maximum acceptable loss on any trade, per contract, I do not take the trade. The act of writing the check out in the air forces me to confront the size of the potential loss before the trade is entered.
And writing this check before each trade is entered has an added benefit: As I write the check, I simply consider that I have just 'spent' that amount, per contract, out of my trading account; I assume that money is gone, even before the trade is entered! Sounds crazy?
By assuming the stop loss money is gone, I have also dealt with any emotions associated with the trade if it turns into a loser: I've already lost that money, right? But if it turns into a winning trade, I not only get the profits I accrue in the trade but I get the initial stop loss money 'check' back as an added bonus! I know it sounds crazy and believe me, when I first started writing out stop loss checks in the air at the proprietary trading room I run in downtown Chicago, the other four traders used to scratch their heads or shrug their shoulders--they thought I was crazy, too.
But after watching me do it for a few weeks, they started doing their own version: One of them literally had checks printed out and he writes out a check while considering a trade; another has a check form built into his trade sheet, so he goes through the same ritual right on his trade sheet. Try it. You might find it helps you limit the size of your losses and also make it easier to deal with your losses.
By assuming the stop loss money is gone, I have also dealt with any emotions associated with the trade if it turns into a loser: I've already lost that money, right? But if it turns into a winning trade, I not only get the profits I accrue in the trade but I get the initial stop loss money 'check' back as an added bonus!
Follow The Rules and You'll Stay Out of Trouble
The next piece I always put in place is simple limits:
1. The maximum amount you are allowed to lose in a day.
2. The maximum amount you are allowed to lose on any trade.
3. The maximum number of losing trades you are allowed in a row in a day before you stop trading.
4. The maximum number of losing trades you are allowed to have in a day before you stop trading.
5. The maximum number of losing trades in the same direction you are allowed to take in a day before you stop trading.
6. If you violate one of your trading rules, you will take XX days off, staying away from the markets entirely.
Sound restrictive to you? It's meant to be restrictive! There should be hard limits on every aspect of your trading. If you start to lose money and it turns into a series of losers, you want hard limits in place so the damage to your account is limited. If you break one of your trading rules, you are either out of control or you are very tired and ragged and badly need an emotional or physical break.
Let's try to fill in those numbers a bit and see how they might look. If you look at your current trading statistics and see that on a good day, you make on average $500, and your maximum loss you take as your initial risk is $150 [per contract and you are currently trading one contract per trade], the numbers might look like this:
1. The maximum amount you are allowed to lose in a day is $900.
2. The maximum amount you are allowed to lose on any single trade is $150.
3. The maximum number of losing trades in a row you are allowed to have in a day before you stop trading is three.
4. The maximum number of losing trades you are allowed to have in a day before you stop trading is five [You may have had a win or two between losses, but there IS a time to stop trading].
5. The maximum number of losing trades in the same direction you are allowed to take in a day before you stop trading is three.
You'll note that the maximum amount you are allowed to lose in a day is considerable larger than if you had three losing trades in a row and lost their maximum amount. This is purposely set higher because there are times when you get unusual slippage OR have a position on and an unusual event occurs, leaving you with a loss much greater than your planned $150. You can adjust these numbers up or down. But the key is to have them in place, written down and in front of you at all times. And NEVER violate them. If you violate them FORCE yourself to take time off from trading.
You'll Be Rewarded For Good Behavior
Now let me add an additionally important piece to this plan: Rewarding yourself! Let's see if we can define some important ways that might underline the positive events in your trading days:
1. If you are up XX on a single trade, you will put a profit floor of XX underneath the current price to protect a portion of those profits.
2. If you are up XX on a single trade, you will take the money and close out the trade.
3. If you are up XX for the day, you will take the rest of the day off, stay away from the trading screens and do something you enjoy doing--other than trading!
4. If you are up XX for the month, you will put a profit floor of XX underneath the month's profits to protect a portion of those profits.
5. If you are up XX for the month, you will take the rest of the month off, stay away from the trading screens and do something you enjoy doing--other than trading! Take a vacation, sleep late and read books, do something fun!
Trading is hard work! When you get it right, it is important to internally recognize that you did something special.
I can't tell you how many traders have experienced this: At the beginning of the day, they take a position in their normal market. Unexpected news comes out and before they know it, they have three times as much in potential profit in this first trade than they have ever made in a single day! They assume the trade will keep running because of the news and watch as it tops out and begins to turn. Because they have never had 'parabolic' profits from news before, they don't realize that sometimes, what goes up fast, comes down just as fast. Before they know it, they find themselves taking 'some' profits out of the trade, but the profit they end up taking is much smaller than their largest profit in a day--this trade becomes the 'big one' got away.
Stop and think about this for a moment. Had they simply taken the stupendous profit and walked away, it would have been marked in their trading memory for life! Instead, the trade will always be remembered by them as 'I almost...' and be a disappointment, even if they made a good deal of money on the trade.
And if they then go on and make more trades that day, they often turn what had been a 'career' type trading day into a flat or losing day. They are so stunned and wrung out from the emotional roller coaster ride of the first trade that they are not capable of trading with their normal discipline. This can be an emotional nightmare for a trader and in many ways, cripple their trading career for life!
Let's see if we can fill in some of those numbers [all assuming you are trading a single contract at a time]:
1. If you are up $1200 on a single trade, you will put a profit floor of $500 underneath the current price to protect a portion of those profits.
2. If you are up $1800 on a single trade, you will take the money and close out the trade.
3. If you are up $2500 for the day, you will take the rest of the day off, stay away from the trading screens and do something you enjoy doing--other than trading!
4. If you are up $15,000 for the month, you will put a profit floor of $5,000 underneath the month's profits to protect a portion of those profits.
5. If you are up $20,000 for the month, you will take the rest of the month off, stay away from the trading screens and do something you enjoy doing--other than trading! Take a vacation, sleep late and read books, do something fun!
I based these numbers on a trader with an average winning trade of $500 per contract, a fifty percent win/loss ratio and again, this trader always only trades one contract at a time. The size of the numbers you come up with may be radically different than what I just wrote down. They are only meant as a starting point for your mental exercise! It should take you several weeks of soul searching before you finalize your first set of 'hard and fast' rules. But you SHOULD have a set of rules written down and on your trading desk where you can see them at all times. You should also always fill out a trade plan BEFORE you enter any trade, and stick to your trade plan without fail! As I noted before, if you violate any of the trading rules, make yourself take a break. If you love trading, having to be away from it should feel terrible! You will avoid being put 'in the penalty box' at all costs!
This trader wasn't in my mentoring program but he conversed with me via email daily--often enough that when a day went by when I didn't get an email from him, I would wonder if he had hit a tough streak or if he had taken a day off. After he had one rough stretch, I emailed him and spelled out the set of rules I suggest to the traders I mentor. He thanked me for them, told me he thought they were a great idea and never mentioned them again.
I lost a trader today. It saddens me to think that I was unable to help him overcome his own internal flaws. I truly did my best to help him, but it wasn't enough. One thing I tell people in my free webcasts, on my websites and in my mentoring programs is this: Your birth certificate does not say 'Trader' on it. If you want to be a consistently successful trader, you have to learn a good deal about the markets and about trading tools; but mostly, you have to learn a great deal about yourself!
To your trading success,
Tim Morge
Tuesday, 13 October 2009
Friday, 9 October 2009
Story
http://thelonelytrader.wordpress.com/2008/11/22/correlations-trading-philosophy-and-etc/
Was talking to a friend of mine last night who had traded currencies professionally for eleven years and now trades exclusively for a few of his old clients. This guy is a machine, trading in size and regularly pulling in over 3% per month. He doesn’t sleep like the rest of us. He catches cat naps here and there — two hours in the afternoon, a few hours at night, and then sleeps like a log on holidays and weekends. He takes the summers off and recharges. He doesn’t head out to some exotic locale. He putters around his house outside of Asheville, NC, running his dogs and riding horses and hanging out at the BBQ pit with his family. He trades FX spot (majors and their crosses), ES, YM, ZB (T Bonds) and a few interest rate contracts, CL and WTI. I asked him once why he trades the little S&P over the big one — he said he prefers the E-mini S&P because it is traded electronically and he gets better fills. I know most of the people reading this will laugh about his returns – I have read rediculous statements about trading not being worth it if one isn’t making more than 100% per year. Most people reading this don’t make the money this guy does…in fact, it’s safe to say that NOBODY reading this blog makes the money this guy does. And I doubt the knuckleheads who made those statements — on EliteTrader.com, I think — are profitable traders. He isn’t a supermegaultimate trader, but he does make a very comfortable living for his family and probably contributes significantly to his clients’ standard of living.
Anyway, we were talking about correlations last night. I was on one of my usual rants about how correlations are not so important when trading on lower time frames. I have seen quite a few people commenting on blogs about the dangers of taking correlated trades. I have observed that most of the bloggers taking these trades are operating on very short time frames. I don’t see a problem on 5min, 3min, 1min and tick charts, as long as one’s method has been tested and the execution is consistent. He agreed, saying that people get confused about how to manage correlations. He trades highly correlated pairs all the time on intraday charts. He doesn’t try to enter the trades at the same time. He enters only when signals print. Often one will win and the other will lose. And he nets a gain. For example, he would take a short in EURUSD and a long in USDCHF (inversely correlated currency pairs), exiting one for a loss and one for a gain. Occasionally he loses on both. He also wins on both, with one often making an outsized gain. An outsized gain for him would be anything above 2R. (Another peeve of his is when traders harp on the 3:1 rule. His experience has been that if he is too insistent on making 3R, he gives back more profit than if he were to simple take 2R.) “Correlations,” he says, “are important for longer term strategies and portfolio managers. I am not a portfolio manager.” I recall having a similar conversation with him about the Sharpe ratio. He thinks it is useless for most traders.
I was on the East Coast for training a few years ago and had a chance to drive out to his house to see his operation. Very humble. Four screens, two computers, and a laptop in a small office. A cheap but comfortable chair, a foot riser, and a treadmill with a side table (for the laptop). He inspired my own setup, minus the treadmill — I have an elliptical machine in the garage, also with a side table for a laptop. (Have to use that elliptical machine more often! It was pricey!) I asked him why the blinds were closed when he had such a nice view. “Focus,” was his answer. I was there during the summer and he wasn’t trading but he still had charts and data up on the screens. We get along well because we are both critical of dogmatic people — whether they are religious zealots, scientists…or traders! When I ask a question, he always asks what I think. This strategy worked, because I don’t ask questions anymore. We end up discussing ideas, instead of one person imparting knowledge to another. Makes for a much more interesting conversation. We have two completely different styles of trading, but he enjoys talking about markets as much as I do and doesn’t seem to mind the vast difference between us in terms of our success as traders. He is genuinely interested in what people think about the markets, no matter who they are. (Another one of his peeves is when traders say they have no opinion about where the markets will go. “What the hell are they trading for, then? Don’t they have a method? Well that is a f@#%ing opinion! What are they doing? Don’t they know why the method is giving them a signal? Don’t they understand why they are long or short or out?”) He’s not a finance geek — he speaks in big blue arrow terms and in plain English. But he is extremely critical of people who don’t understand the simple math behind what they do and the myriad ways to interpret it. “Even if you use an MA or a stochastic, you gotta understand why you use it, what the damn squigglies are and aren’t telling you and whether any of that even makes sense in the moment according to your view of the market. And if you tell me MAs don’t work, I will tell you that you are a presumptuous, one-dimensional knuckle-dragger and you don’t know what you’re talking about.”
In case you’re wondering, he really did say “presumptuous, one-dimensional knuckle-dragger.” After talking to him, I write down the thoughts that stick. He ridiculed me once for this, but after he got his two or three shots in he muttered, ”I should do that.”
He asks: “Why don’t you trade bonds, Jay? Why don’t you trade crude?”
My reply: “I don’t have the capital or the time.”
His reply: “Well I guess you better get things right then, sonny-boy!”
Dontcha love this guy
(-LT)
Was talking to a friend of mine last night who had traded currencies professionally for eleven years and now trades exclusively for a few of his old clients. This guy is a machine, trading in size and regularly pulling in over 3% per month. He doesn’t sleep like the rest of us. He catches cat naps here and there — two hours in the afternoon, a few hours at night, and then sleeps like a log on holidays and weekends. He takes the summers off and recharges. He doesn’t head out to some exotic locale. He putters around his house outside of Asheville, NC, running his dogs and riding horses and hanging out at the BBQ pit with his family. He trades FX spot (majors and their crosses), ES, YM, ZB (T Bonds) and a few interest rate contracts, CL and WTI. I asked him once why he trades the little S&P over the big one — he said he prefers the E-mini S&P because it is traded electronically and he gets better fills. I know most of the people reading this will laugh about his returns – I have read rediculous statements about trading not being worth it if one isn’t making more than 100% per year. Most people reading this don’t make the money this guy does…in fact, it’s safe to say that NOBODY reading this blog makes the money this guy does. And I doubt the knuckleheads who made those statements — on EliteTrader.com, I think — are profitable traders. He isn’t a supermegaultimate trader, but he does make a very comfortable living for his family and probably contributes significantly to his clients’ standard of living.
Anyway, we were talking about correlations last night. I was on one of my usual rants about how correlations are not so important when trading on lower time frames. I have seen quite a few people commenting on blogs about the dangers of taking correlated trades. I have observed that most of the bloggers taking these trades are operating on very short time frames. I don’t see a problem on 5min, 3min, 1min and tick charts, as long as one’s method has been tested and the execution is consistent. He agreed, saying that people get confused about how to manage correlations. He trades highly correlated pairs all the time on intraday charts. He doesn’t try to enter the trades at the same time. He enters only when signals print. Often one will win and the other will lose. And he nets a gain. For example, he would take a short in EURUSD and a long in USDCHF (inversely correlated currency pairs), exiting one for a loss and one for a gain. Occasionally he loses on both. He also wins on both, with one often making an outsized gain. An outsized gain for him would be anything above 2R. (Another peeve of his is when traders harp on the 3:1 rule. His experience has been that if he is too insistent on making 3R, he gives back more profit than if he were to simple take 2R.) “Correlations,” he says, “are important for longer term strategies and portfolio managers. I am not a portfolio manager.” I recall having a similar conversation with him about the Sharpe ratio. He thinks it is useless for most traders.
I was on the East Coast for training a few years ago and had a chance to drive out to his house to see his operation. Very humble. Four screens, two computers, and a laptop in a small office. A cheap but comfortable chair, a foot riser, and a treadmill with a side table (for the laptop). He inspired my own setup, minus the treadmill — I have an elliptical machine in the garage, also with a side table for a laptop. (Have to use that elliptical machine more often! It was pricey!) I asked him why the blinds were closed when he had such a nice view. “Focus,” was his answer. I was there during the summer and he wasn’t trading but he still had charts and data up on the screens. We get along well because we are both critical of dogmatic people — whether they are religious zealots, scientists…or traders! When I ask a question, he always asks what I think. This strategy worked, because I don’t ask questions anymore. We end up discussing ideas, instead of one person imparting knowledge to another. Makes for a much more interesting conversation. We have two completely different styles of trading, but he enjoys talking about markets as much as I do and doesn’t seem to mind the vast difference between us in terms of our success as traders. He is genuinely interested in what people think about the markets, no matter who they are. (Another one of his peeves is when traders say they have no opinion about where the markets will go. “What the hell are they trading for, then? Don’t they have a method? Well that is a f@#%ing opinion! What are they doing? Don’t they know why the method is giving them a signal? Don’t they understand why they are long or short or out?”) He’s not a finance geek — he speaks in big blue arrow terms and in plain English. But he is extremely critical of people who don’t understand the simple math behind what they do and the myriad ways to interpret it. “Even if you use an MA or a stochastic, you gotta understand why you use it, what the damn squigglies are and aren’t telling you and whether any of that even makes sense in the moment according to your view of the market. And if you tell me MAs don’t work, I will tell you that you are a presumptuous, one-dimensional knuckle-dragger and you don’t know what you’re talking about.”
In case you’re wondering, he really did say “presumptuous, one-dimensional knuckle-dragger.” After talking to him, I write down the thoughts that stick. He ridiculed me once for this, but after he got his two or three shots in he muttered, ”I should do that.”
He asks: “Why don’t you trade bonds, Jay? Why don’t you trade crude?”
My reply: “I don’t have the capital or the time.”
His reply: “Well I guess you better get things right then, sonny-boy!”
Dontcha love this guy
(-LT)
Thursday, 8 October 2009
If you're going to work on a weakness, never choose more than one.
http://blogs.harvardbusiness.org/bregman/2009/10/i-lost-18-pounds-in.html
I lost 18 pounds in the past month and a half.To Change Effectively, Change Just One Thing
2:42 PM Tuesday October 6, 2009
I didn't exercise harder or longer than usual. I didn't read a new diet book supported by evidence and filled with rules and recipes. I didn't eat prepared meals from a diet organization.
I've done all those things in the past and some of them worked but none of them lasted. They were too complicated or too expensive or too cumbersome to continue.
So I made a different decision this time. A much simpler one.
First a little background on losing weight. Every new diet book explains why it's better than all the previous ones. This new plan, the author claims with enthusiasm, holds the key to losing weight and keeping it off forever. It will succeed where the others have failed.
So we decrease our fat consumption. Or increase it. We eat more protein. Or less. We raise our intake of carbohydrates. Or reduce it. And the question lingers: which is the best diet to lose weight?
Well, we now have the answer. A study published in the New England Journal of Medicine earlier this year put 811 overweight adults through four different diets, each one a different proportion of fat, carbohydrates and protein.
The result? On average participants lost 12 pounds after six months and kept nine pounds off after two years. No matter which diet they followed. Certainly some diets are healthier than others. But in terms of losing weight? No diet was better than any other. Because all diets work through a single mechanism — they restrict your calorie intake. People lose weight when they eat less.
If that's true, then the best diet is the simplest one. So I asked myself: what's the one thing I can change that will make the biggest difference in my calorie consumption? Everyone has one thing.
Mine was sugar. Sometimes I would eat three bowls of ice cream in a day. If I changed that, everything else would work itself out. Cutting out sugar was the one thing that would give me the highest return.
So I stopped eating it. No more cookies, candy, cake, ice cream. That's the only change I consciously made. I sidestepped millions of complex little decisions most diets require — counting, weighing, choosing, deciding. No phases, no recipes, no thinking.
Each person's one thing could be different. For some it might be fried foods. For others, meat. For others still, soft drinks. What's important is to keep it simple.
The implications of this are huge, not just for diets but for all behavior change (after all, what else is a diet but behavior change?).
Typically, people overwhelm themselves with tasks in their eagerness to make a change successfully. But that's a mistake. Instead, they should take the time up front to figure out the one and only thing that will have the highest impact and then focus 100% of their effort on that one thing.
A few years ago a Fortune 100 client asked me to design a new leadership training program. They already had one and had spent several years training people in it, but now they wanted a new one. Why? Because the current one wasn't having the impact they wanted.
I asked to see the old one. Honestly? While I'd love to say my leadership ideas are far superior, I thought the ones they were using were equally good. Leadership models are no different than diets — most of them are just fine. The brilliance is rarely in the model, it's in the implementation.
Don't start from scratch, I pleaded with them. You've already spent years spreading the word, inculcating the language, and socializing the concepts of the old leadership methodology. People are familiar with it. Don't get rid of it.
Just simplify it. Reduce it to its essence. What's the one thing that will have the greatest impact on their leadership?
After some thought they concluded that if managers communicated more with their employees it would solve the majority of their issues. Great, I suggested, focus all your efforts on that. Let everything else go.
Sam, an entrepreneur friend of mine, called me disheartened after his business didn't work out. He's taking a few months off before starting his next venture, and we discussed how he should spend his time. It turns out that Sam's dyslexic and has always had difficulty reading.
We agreed he should do one thing in his time off: read every day. That's unusual advice from me. Usually I tell people to forget about their weaknesses and focus on their strengths. But in Sam's case the dividend will be huge. If he can tackle reading, not only will it open doors for him, he'll conquer the one thing he thought he couldn't do. That confidence will change everything else in his life.
If you're going to work on a weakness, never choose more than one.
A large retail organization with stores all over the world — we'll call it Marla's Clothing — developed ten "Gold" behaviors they wanted all sales associates to exhibit. Things like greet each customer, ask customers if they want an accessory at the point of sale, measure customers for a good fit, and thank each customer for shopping at the store. Stores in which sales associates exhibited all ten behaviors saw a substantial increase in sales.
After some time, Marla's Clothing sent in mystery shoppers to see how the sales associates were doing. Management was pleased: on average the associates were displaying nine of the ten behaviors.
I asked the project lead if they had seen a change in sales as a result of this 90% success rate. After a short inspection of the data it turned out they hadn't.
So we looked to see if the associates were each missing different behaviors or if they were avoiding a specific one of the ten. As we suspected, they were all skipping the same behavior: measuring customers for a good fit.
"You don't have ten Gold behaviors," I told the project lead, "You have one. Measuring customers for a good fit is your one thing." We instructed the sales associates to focus solely on doing that one thing. Marla's Clothing sales shot up.
"18 pounds!" a friend of mine exclaimed. "You should write a book about it."
I considered it for a second but quickly realized I'd only have one thing to say.
"Not a book," I responded, "but maybe a blog post."
Friday, 2 October 2009
Thursday, 1 October 2009
Wednesday, 30 September 2009
Trading is a game of probabilities
6. Fear of Trading, Hesitation to Pull the Trigger.
* Trading is a game of probabilities. I don’t have to be right every time. I just have to follow my rules. I know my system works. Every trade is either a profit or a stop. Any given trade is not of significance. The results over a certain time period are what matter. Trading within my proven system puts the odds on my side. I have to play to allow opportunities to materialize. I know I can trade by my rules. All I do is react to signals, a signal to enter and signal to exit, that are generated by my system. They take me in and out with no hesitation. I can observe the market and emotionally detach from it. Any stock movement is simply numbers that change following certain patterns. I know how to read those patters. I am totally focused on what the market is telling me. I can hear it and react to it.
* Trading is a game of probabilities. I don’t have to be right every time. I just have to follow my rules. I know my system works. Every trade is either a profit or a stop. Any given trade is not of significance. The results over a certain time period are what matter. Trading within my proven system puts the odds on my side. I have to play to allow opportunities to materialize. I know I can trade by my rules. All I do is react to signals, a signal to enter and signal to exit, that are generated by my system. They take me in and out with no hesitation. I can observe the market and emotionally detach from it. Any stock movement is simply numbers that change following certain patterns. I know how to read those patters. I am totally focused on what the market is telling me. I can hear it and react to it.
Thursday, 17 September 2009
Steps to Successful Commodities Futures Trading
Steps to Successful Commodities Futures Trading
as published in Commodity Futures Trading Club News
and in Traders Organization's Real Success Daytrading Course
as published in Commodity Futures Trading Club News
and in Traders Organization's Real Success Daytrading Course
- We accumulate trading information - buying books, going to seminars and researching.
- We begin to trade with our 'new' knowledge.
- We consistently 'donate' and then realize we may need more knowledge or information.
- We accumulate more information.
- We switch the commodities we are currently following.
- We go back into the market and trade with our 'updated' knowledge.
- We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
- We start to listen to 'outside news' & other traders.
- We go back into the market and continue to donate.
- We switch commodities again.
- We search for more trading information.
- We go back into the market and continue to donate.
- We get 'overconfident' & market humbles us.
- We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.
--------------------------------------------
Many Traders Will Give up at this Point as they Realize Work is Involved
- We get serious and start concentrating on learning a 'real' methodology.
- We trade our methodology with some success, but realize that something is missing.
- We begin to understand the need for having rules to apply our methodology.
- We take a sabbatical from trading to develop and research our trading rules.
- We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
- We add, subtract and modify rules as we see a need to be more proficient with our rules.
- We go back into the market and continue to donate. We go back into the market and continue to donate.
- We start to take responsibility for our trading results as we understand that our success is in us, not the trade methodology.
- We continue to trade and become more proficient with our methodology and our rules.
- As we trade we still have a tendency to violate our rules and our results are erratic.
- We know we are close.
- We go back and research our rules.
- We build the confidence in our rules and go back into the market and trade.
- Our trading results are getting better, but we are still hesitating in executing our rules.
- We now see the importance of following our rules as we see the results of our trades when we don't follow them.
- We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
- We continue to trade and the market teaches us more and more about ourselves.
- We master our methodology and trading rules.
- We begin to consistently make money. We begin to consistently make money.
- We get a little overconfident and the market humbles us.
- We continue to learn our lessons.
- We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
- We are making more money then we ever dreamed to be possible.
- We go on with our lives and accomplish many of the goals we had always dreamed of.
Tuesday, 15 September 2009
Eagles
(Copy paste)
Eagles are the most long-lived bird in the world. By the time they reach 40 years old, their claws will start to age, losing their effectiveness and making it hard for them to catch preys. The life span of an eagle is up to 70 years old.
But, in order to live this long, it must make the toughest decision at 40. At 40, it's beak is too long and curvy that it reaches it's chest. It's wings, full of long, thickened feathers, are too heavy for easy flying. The eagle is left with 2 choices - do nothing and await it's death or go through a painful period of transformation and renewal.
For 150 days, it first trains itself to fly beyond the high mountains, build and live in it's nest and cease all flying activities. It then begins to knock it's beak against granite rocks till the beak is completely removed.
When the new beak is grown, the eagle will use it to remove all it's old claws and await quietly for new ones to be fully grown. When the new claws are fully grown, the eagle will use them to remove all it's feathers, one by one. Five months later, when it's feathers are fully grown, it will soar in the sky again with renewed strength and is able to live for the next 30 years.
In life, we have to make difficult decisions so as to make room for changes. Changes bring about renewal. And the only way for us to soar again, is to let go old ways, old habits and old lives.
For as long as we are prepared to put aside our old baggage - past glory or shame, past success or failure - be willing to become zero, with an empty cup mentality, we will be able to discover our potential and head towards a renewed perspective in any aspect of our lives
Wednesday, 2 September 2009
Fear - The Attachment to Time
by Peter Shepherd
http://www.smartrecovery.org/resources/library/Articles_and_Essays/Rational_Thinking/fear.htm
All fear is, in essence, fear of the future. We are afraid of the things that have not yet happened, but which if they did might bring us pain, suffering or some other discomfort - or stand in the way of some future contentment. And we are afraid that circumstances that are already causing us displeasure may continue in the future.
We may fear losing our jobs and the resulting drop in living standards. We may fear failure for the disapproval it might bring. We may fear having nothing to do because we might get bored. We may fear telling the truth because others may not like us for it. We fear the unknown for the dangers it may bring. We fear uncertainty, not knowing whether or not we will find what we are after. Here lies a sad irony. We want to be happy and at peace with ourselves. Yet the very nature of fear makes us anxious in the present and not at peace. Many of our fears are not so strong that we would label them as fears. They may be just concerns, little niggles we have about how things may turn out. They may not even be conscious concerns - in many cases they surface only in our dreams, in conversation with a friend, or after a couple of drinks. Nevertheless they fill our minds with thoughts.
This is the voice within our heads that comments, often critically, on everything we do. It thinks, "I did that well, people will approve of me", or "If only I had said it differently she would not have got upset". It is the voice that speculates on the future, "Should I make that telephone call...what if...?" It wonders what other people are thinking and how they will react. It is the voice of fear, the voice of the ego-mind - the part of us that believes that only through what happens to us in the world around can we be at peace within. But filling our minds with worry over what people might or might not think is not the most constructive use we can make of our imagination.
This internal dialogue keeps us trapped in time - it dwells on the past or the future. As long as our attention is in the past or future, we are not experiencing things as they are, we are seeing them through the judgements of the past and our fears for the future. At times we can be so caught up in our self-talk that we do not even notice the present. We ignore what is going on around us, do not really hear what people are saying, do not appreciate how we really feel. So engrossed are we in our concerns that we never seem to pause to let things be. We have lost the present moment - lost the NOW.
This moment is all that exists. This fleeting instant is the only reality. The past is gone forever. The future is not yet born.
Your body is in the NOW. But if you're like most people, your mind is in the past or in the future. You grieve or glory over events of long ago. You harbour resentments and guilt and shame - hangovers from the past. You think of what you should have said or might have been. You fear and fantasise over the future, you worry about every moment of wasted time. You worry about death, not having enough time to achieve your ambitions, the end of your ego. All of which cuts you off from the present like a dark screen.
If you bring the mind from miles away to the activity of the moment, if you abate the clatter in your head to focus on the physical reality surrounding your body, and the sensations from within it, you'll gradually experience a surprising sense of well-being. Indeed, tuning in to the NOW is one gateway to perceiving eternity. The philosopher Wittgenstein observed: "If we take eternity to mean not infinite temporal duration but timelessness, the eternal life belongs to those who live in the present". By experiencing a moment for itself, you stop time. Time is defined as the interval between two events. When you are in the NOW there is no interval, only the event alone.
The concept of the NOW has great validity when dealing with emotions and the senses. NOW is a point at which you are in touch with the ongoing process. Past and future take their bearings continuously from the present and must be related to it. Without reference to the present they become meaningless.
http://www.smartrecovery.org/resources/library/Articles_and_Essays/Rational_Thinking/fear.htm
All fear is, in essence, fear of the future. We are afraid of the things that have not yet happened, but which if they did might bring us pain, suffering or some other discomfort - or stand in the way of some future contentment. And we are afraid that circumstances that are already causing us displeasure may continue in the future.
We may fear losing our jobs and the resulting drop in living standards. We may fear failure for the disapproval it might bring. We may fear having nothing to do because we might get bored. We may fear telling the truth because others may not like us for it. We fear the unknown for the dangers it may bring. We fear uncertainty, not knowing whether or not we will find what we are after. Here lies a sad irony. We want to be happy and at peace with ourselves. Yet the very nature of fear makes us anxious in the present and not at peace. Many of our fears are not so strong that we would label them as fears. They may be just concerns, little niggles we have about how things may turn out. They may not even be conscious concerns - in many cases they surface only in our dreams, in conversation with a friend, or after a couple of drinks. Nevertheless they fill our minds with thoughts.
This is the voice within our heads that comments, often critically, on everything we do. It thinks, "I did that well, people will approve of me", or "If only I had said it differently she would not have got upset". It is the voice that speculates on the future, "Should I make that telephone call...what if...?" It wonders what other people are thinking and how they will react. It is the voice of fear, the voice of the ego-mind - the part of us that believes that only through what happens to us in the world around can we be at peace within. But filling our minds with worry over what people might or might not think is not the most constructive use we can make of our imagination.
This internal dialogue keeps us trapped in time - it dwells on the past or the future. As long as our attention is in the past or future, we are not experiencing things as they are, we are seeing them through the judgements of the past and our fears for the future. At times we can be so caught up in our self-talk that we do not even notice the present. We ignore what is going on around us, do not really hear what people are saying, do not appreciate how we really feel. So engrossed are we in our concerns that we never seem to pause to let things be. We have lost the present moment - lost the NOW.
This moment is all that exists. This fleeting instant is the only reality. The past is gone forever. The future is not yet born.
Your body is in the NOW. But if you're like most people, your mind is in the past or in the future. You grieve or glory over events of long ago. You harbour resentments and guilt and shame - hangovers from the past. You think of what you should have said or might have been. You fear and fantasise over the future, you worry about every moment of wasted time. You worry about death, not having enough time to achieve your ambitions, the end of your ego. All of which cuts you off from the present like a dark screen.
If you bring the mind from miles away to the activity of the moment, if you abate the clatter in your head to focus on the physical reality surrounding your body, and the sensations from within it, you'll gradually experience a surprising sense of well-being. Indeed, tuning in to the NOW is one gateway to perceiving eternity. The philosopher Wittgenstein observed: "If we take eternity to mean not infinite temporal duration but timelessness, the eternal life belongs to those who live in the present". By experiencing a moment for itself, you stop time. Time is defined as the interval between two events. When you are in the NOW there is no interval, only the event alone.
The concept of the NOW has great validity when dealing with emotions and the senses. NOW is a point at which you are in touch with the ongoing process. Past and future take their bearings continuously from the present and must be related to it. Without reference to the present they become meaningless.
Now Is How
(Taken from the book "A Rich Man's Secret" by Ken Roberts. This is the secret that was found.)
I call you "Dear Friend" for we are of the same cast. If face-to-face, we would sense this special kinship between us. You are unique, for you took most unusual steps in an attempt to find what you hold here. Not knowing what you would discover - if anything at all - you journeyed into the unknown. No one told you to make this journey; you made it of your own accord, listening to the still voice within.
What you seek is here: the elusive Secret men and women through the ages long to discover. It is the secret your heart yearns for. It is the secret your mind cannot grasp.
I know nothing about your particular circumstances, whether you are young or old, male or female, married or single, religious or not. I do know, however, that you are in search of a better life. How do I know? Because I have known the same personal dissatisfaction and internal conflict you know. Once I moved fretfully and fearfully from job to job, from city to city, always thinking that the next place would be the "right" place, forever worrying that others would gain the reward before I did. That life was no life. It was, instead, a nightmare of elusive, unfulfilled desires. But I began to realize, with the help of many mentors - who appeared to me, just as I am now appearing to you, in writing - that there was another way to live.
To enter this new life, however, you must take the first step. Cease worrying about who you were, and who you may someday become. Bury the dead past, and trust not the future. Stay here. Rarely will you meet a person who is here. Most are sadly lost to regrets about the past and fears of the future, lost to the ordinary, anxious thoughts that imperil our existence.
Only by staying here can you ever change. When you ask "How?" realize that Now is always the answer to How.
Like you, I sought success; for many years I floundered. Life was a raging battle. I would advance one pace only to retreat two. I frantically contrived for wealth and security. But what I managed to gain became the object of my fears of losing it, and so was soon lost to my ignorance and greed. Mine was the hellish existence that most never escape. But I too, was given the key, the secret key I now pass to you that opens the Door of Doors. Behind this door is all you can imagine; yet much more than you are capable of imagining. Even to try is to sully it.
Your discovery of this Secret places you on the threshold you were born to cross. From this day forward, your life is changed. Discovering this letter you will forever know that the Door exists. I assure you it does. Entering this Door is what the still, small voice in you thirsts for and ceaselessly nudges you toward. It knows that all your deeds, dreams and desires have fallen short. The world may even elevate and envy you, yet the still, small Voice reminds you there is something more you need to find. But here lies the mystery, that timeless paradox: to enter the Door, you must lose yourself. On the other side, you will live from a new perspective, a higher vantage point. From that invisible plateau you will receive perfect instruction by which you will conduct all your affairs.
No longer will doubt, confusion, and fear darken your spirits. Your actions will no longer be mere reactions; you will be purposeful and live from true confidence. You will become invisible to events. The day's headlines will have no affect on your choices. Indeed, when you receive instruction issued from behind the Door, there is but one right choice to make in every instance, and you will make it without effort, without thinking.
What I am about to reveal to you has been known by only a fortunate few. It obviously is not known by the masses, by educators, or by the so-called learned amongst us. Precious few have ever heard this revelation, although some who have been blessed with this wisdom have rejected it. They resisted and refused to listen, just as you may be so inclined. So this is your chance. I am ennobled to be the one who brings this to you.
Your mind is not the friend you now believe it to be. It is a mere machine that tosses out thoughts incessantly, mechanically. But you are neither your mind nor its myriad of thoughts and emotions. They cannot open the door. If they could, they would have done so. To cross the threshold to a new life, you must remove yourself from your own thoughts. This can be done. Permit me to explain what only seems unexplainable.
At any moment, you can be in only one of two places mentally: you are either immersed in your thoughts, or you are separate from them. Incredible an instrument as your mind is, it cannot lift you above what it knows. And you have a divine instruction within you to transcend 'what you know, but the mind simply cannot perform this miracle, you must take the step of faith: Leave your thoughts behind.
You, as most do, live from your mind - from thoughts and emotions. This is living on the billiard table or in the rushing river. As active and violent as these places are, they are mesmerizing and hypnotic. Living from thoughts as most do is a form of sleep. To remove yourself from this slumber, simply awaken.
Where are your hands now? Are they relaxed or tense? Do you know the expression on your face? Is your brow furrowed and tight? What is the temperature of the air surrounding you? What is the position of your feet? What supports your body this moment, and how is your weight distributed? This awareness of yourself and of your surroundings is Now. In this attentive state you are separate, watching yourself read the words on this paper, witnessing the thoughts and sensations coursing through you.
Becoming awake lifts you out of the tumultuous waters of doubt, anxiety, worry, fear and anger. Your attention places you on a bridge over the tumbling river. You still see the chaos below, but now you are not part of it. You are transformed into an impartial observer. It is in this attentive state that something higher can communicate with you.
It is impossible to sense its directions while in the cascading waters. Although it is always present, always reaching out to you, your work is to clear a path to receive its direction. Do this by becoming awake and attentive. Return to Now.
Rarely will you meet a person who is in the Now state. Most are forever lost in thought. The secret of Now places you at the Door. It is from the Now state that perfect direction can reach you. You cannot hear the voice's direction while asleep, just as you cannot touch a beam of light; they are of two distinct and different natures. Your inner ears can "hear" only when you are standing upon the doorstep of 'Now.
My purpose is not to elaborate, but only to reveal this secret of taking this first step - leaving thought and returning to Now.
Can you do it - can you actually take this step of faith? Your mind is producing doubtful thoughts now, but yes, you can. Think back on your search for this letter: you had to take a step of faith to locate it. This I intended for the very purpose of proving to you the existence of the Door. It also vividly demonstrates how you cannot - must not - trust of or believe what your mind "advises." It did not know the location of this letter. Indeed, thoughts shouted at you to give up the search.
To locate this hidden letter, you had to leave the certainty of your mind and its thoughts. Now you will work at doing so in greater and greater measure consciously, from the attentive, awakened state. You will work from Now.
Be as vigilant as you are able; observe yourself as often as you can remember. Observe the numerous states you enter and exit from each day. Inquire of yourself, "who is this that is angry? Doubtful? Fearful? Excited? Depressed?' It is not you; it is only thoughts in your mind using you!
When you do this long enough, an entirely new understanding will emerge and you will begin to think in a manner differently than you do presently.
What will happen? You will become a new person! You will see, hear, and sense as never before. The demon fear will retreat and fall away more and more. You will receive directions to proceed that seem impossible. Take that first step - no more, no less - and the next will be revealed. In this way, you will pass through what formally appeared to be solid brick walls that you avoided. Your way out is through the illusory brick walls! Now you seek "the impossible," knowing it is the very doorway out!
Always remember that what appears, as a solid brick wall is a mere illusion created by the rushing river of thought. It is no more significant than an ant - disguised as a brick wall! The only way to banish this illusion is to proceed through it, watching your fear and trepidation all the while. In this one way, you will know from yourself that it is all an illusion.
While you are conducting business, seated at the dining table, enjoying a walk, conversing with another even as you doze at night, come back to Now. (Where are you at this moment?) Come back to yourself. Come back to yourself. A thousand times a day. Work at this. Keep coming back to yourself, to Now.
As thoughts and feelings attempt to confuse and frustrate you, awaken. Watch these demons, and they will pass. You are viewing from a higher place. Do not jump back into the river, simply observe from above.
Notice others from your watchful state. They live immersed in thought, just as you have done to this point in your life. They are tugged and tousled - at one moment elated, then sullen, teary, depressed, frightened, and angry at the next. As you begin to observe all these states your mind pulls you through, you will be amazed. Return from these thoughts to Now; Now cannot be bandied about. Your attentive state is solid ground; it is of a level overlooking the billiard table and rushing river.
Do not struggle to understand the thoughts you observe; be only watchful of them. Treat them as the outsiders and intruders they are. Say to yourself, "Oh, look at that angry thought." etc. Become the uninvolved bystander. An indescribable new life awaits you as you do this.
You are not on as high a level in your employment or business as you secretly know you are capable. Until now, if you desired to rise from 'this level, you knew only to delve into your thoughts, to refer' to your cerebral library for answers. But your library is of the same level as the questions you pose. Seeking the higher, you must leave the level you presently occupy. To do so, return to Now. In the past, you knew only to delve into your thoughts for the answers you seek. This process uprooted stored information that is lifeless. You found no answers there and your mind then conjured up projections based on these past dead thoughts. This created fantasies and dreams that only perplexed and agitated you more - a vicious, deceitful cycle. This is all your own mind can provide, however. It does not know the answer you require, Now knows. From Now comes the intelligence that knows you and your every need.
When you know not what to do, return to Now. Now knows. Wait there, and what you need will come to you. What you need is not self-produced.
Of course, there are those who gain the world's esteem and manage to gather its riches, but you will find out that it sooner or later destroys them. They gained it out of persistence and the law of Accident. Most everyone who persists does acquire, but of what value is it if it destroys? There is nothing wrong in gaining worldly treasures if you have first the higher wisdom. See for yourself; observe the world's business and political leaders. They are like an infant happening upon a shimmering object; the glow and glisten entices the child to handle it, to play with it. Little does the infant know the bright shining plaything is a finely polished knife. But with understanding, the knife is a keen tool, very practical and productive in wise, skilled hands.
Turn instead to your only true friend - Now. As a child turns to a parent, simply ask for direction. Have no ideas, schemes, or plans. Simply ask - knowing that you do not know - and then await the answer.
Have no preconceived notions; do not attempt to identify or describe any outcome. What a relief to know you are not responsible for (nor capable of) generating right answers! That is the same as instructing a tree how to form and develop. The seed does not require directions from you; it already contains a Divine Instruction - just as you do. You do not know the outcome, you do not know how. But Now knows; Now is how.
Intelligence knows you completely; it is your one true friend. It knows what is highest and best for you. Your mind - intellect - does not know. So cease your continual turning to your thoughts for answers; they have none above the level you are on. If they did, would you still be on your search? If thought held the answers you require, you would not be questioning.
I can relate countless stories of true revelations that came to me through the Door. They were grander than I could have imagined or dared to request! Merely take the first step - honestly and innocently ask. Then confidently await the Right Answer that has been attempting to contact you all along!
Notice - right now - how your mind is clamoring. It is telling you, "This is wrong," "How could this be so?" "What nonsense!" Your mind does not favour being the target of this bright light you are shining upon it. If you believe what your mind shouts, you will continue on as you have; you will be just one more of the mass of lemmings - running blindly; asleep to their impending doom.
But you are different; you sense that the still, small Voice attempts to lead you to something greater than yourself, and thus the solution to every problem and limitation. Give Now this chance and see for yourself. Whatever question you have, put it to Now. Now is the way.
My essential directions contained in this letter place you at the gateway to your own revelations; however, you must experience it for yourself. Every question you have, or ever will have, is answered by Now. I shall prepare you and reveal some experiences you are about to undergo as you begin this, the one true journey:
You will find yourself speaking less as you observe more and more. Most believe that activity evidences productivity, yet you will begin to see through this fallacy. When idle, your thoughts will protest: "You are wasting time!," "Get to work," "Idleness means missed opportunities!," "Activity is productivity!" and so on and so on. These are mere tricks of your mind. Watch them as you wait for true answers to come through the Door. You cannot hear them amid chaos and confusion - the "normal" state of mind.
I smile in anticipation of your revelations, of your coming awake, truly alive. Revelations await you. Some will unnerve you; others will stupefy your senses. These miraculous events will be evidence that you are transcending this notional world and living from the Higher.
Take the first step; come back to Now. The next step will be revealed. All that you need to know - and precisely when - is in Now. Nothing is coincidental from Now where chance does not exist. What sleeping people call coincidences and miracles are understood - and commonplace! - From Now.
Be attentive; come back to Now. All - everything - is there. All true answers come from Now. Now knows. Take the first step - no more, no less - and the next will be revealed.
DO THIS NOW!
Tuesday, 1 September 2009
My nick
Welcome Sweet September !
Today I decide that the meaning of TST is tactical strategic trader.
Don't laugh.
Ha ha ha.
Still in vacation...
********
Tactics and Strategy - The Correlation (source: Internet)
Tactics are the substance of strategy. They comprise what is done pursuant to strategic planning. The strategic phase of business planning has thinkers (you- the small business owner) determining ways to achieve stated goals. Simply stated, they plan how people need to act in order to attain the objectives for which the strategy is to be used.
Tactics, on the other hand, are the very actions that are necessary to carry out the strategy. Strategies can be a combination of a number of tactics with the involvement of several different people, all working toward reaching a common goal.
Today I decide that the meaning of TST is tactical strategic trader.
Don't laugh.
Ha ha ha.
Still in vacation...
********
Tactics and Strategy - The Correlation (source: Internet)
Tactics are the substance of strategy. They comprise what is done pursuant to strategic planning. The strategic phase of business planning has thinkers (you- the small business owner) determining ways to achieve stated goals. Simply stated, they plan how people need to act in order to attain the objectives for which the strategy is to be used.
Tactics, on the other hand, are the very actions that are necessary to carry out the strategy. Strategies can be a combination of a number of tactics with the involvement of several different people, all working toward reaching a common goal.
Tuesday, 25 August 2009
Trading Mantras
Trading Mantras Taken from “Techniques of Tape Reading“
~Vadym Graifer, Christopher Schumacher
3. Morning Tune-up after a Losing Day
* Today is a separate day, which has nothing in common with yesterday. Today’s performance is fresh. It is I who has the power to do the right things. The stock market has no power over me. It’s not after me. It has no memory of yesterday, and neither do I. I remember how I feel when I win. I am going to remember this feeling of victory. I can identify and execute winning trades.
4. Recovery after a Losing Streak or a Heavy Loss
* I am starting fresh. I know what to do to win. I am doing the right things right now, and not trying to get back my money. I am not taking revenge; there is no one to fight with. I am taking it slowly until I get a good feeling. I am not complaining about my loss. I paid money for the lesson. Now I am applying my new knowledge to my trading. I am taking only trades that match my set of rules. There is no memory of money lost; my trading account is not money. It’s a tool for making money. I am rebuilding my confidence with many small wins. They let me feel the taste of winning. I don’t let events control me. I am in control of myself. I am going to remember the feeling of every win.
6. Fear of Trading, Hesitation to Pull the Trigger.
* Trading is a game of probabilities. I don’t have to be right every time. I just have to follow my rules. I know my system works. Every trade is either a profit or a stop. Any given trade is not of significance. The results over a certain time period are what matter. Trading within my proven system puts the odds on my side. I have to play to allow opportunities to materialize. I know I can trade by my rules. All I do is react to signals, a signal to enter and signal to exit, that are generated by my system. They take me in and out with no hesitation. I can observe the market and emotionally detach from it. Any stock movement is simply numbers that change following certain patterns. I know how to read those patters. I am totally focused on what the market is telling me. I can hear it and react to it.
How I personally use these mantras is I take a few minutes before the market opens to read it to myself a few times. Allow the words to sink in, almost at a subconscious level, so when you’re presented with an opportunity, you’re able to take it without thinking. That’s where you’re best trading will be done.
********
Article B:
You’ve Got a Great Trading System… So Why Are You Losing?
---------------------------------------------------
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?!!
The above scenario plays out in every trader from time to time... newbie 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”.
He/she reads a chapter in his/her 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 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 these systems have lost. Why? They were not in control of their emotions. Are you?
Source: http://sefindotrader.blogspot.com/2008/09/youve-got-great-trading-system-so-why.html
*************
One of my favourite general affirmations is:
"Fear of pulling the trigger is warranted when you don't have an edge...fear of NOT pulling the trigger is necessary when you have one"
These are examples of the crazy things I've been telling myself any time I consider deviating from the plan. They are tailor-made for my particular difficulties.
It's had an enormous affect on my results
source: http://onlythemomo.blogspot.com/
~Vadym Graifer, Christopher Schumacher
1. General State of Mind
* Responsibility for your Own Trading. No one has control over me. I am controlling myself. I cause any changes in my account. I am looking into my actions to find the reasons for any changes that occur. I have the power to make positive changes in my account. No one can hurt me, since I am protected by my rules and discipline. The market is not a hostile environment; it’s just a sea of opportunities. I am giving myself money or taking it from myself. I am not hiding in the comfort of blaming someone else. I want the result-profit or loss-to come from my choices.
* Opinion less State of Mind. The market has no firm link between reason and outcome. I don’t have to figure out the future. I don’t need the weight of opinion on my shoulders. I am free to react to what happens by relying on my reading of stock action. I keep a flexible state of mind. Nothing prevents me from changing my tactic if the market doesn’t act as I expect it to.
* Confidence. I don’t know what the market will do next. I don’t have to know how I will react to anything the market does. I am confident in my ability to react correctly. I have a strategy that works and the discipline to carry it out. I am independent-minded. I don’t trade to please others. I am self-reliant. I question any trade I take, but I don’t question my ability to make the right decisions. I trade effortlessly and automatically. I manage risk and assume losses. I trust myself.
* Living in Reality. I do not convince myself that I am right. I just watch stock movement and make my conclusions. When market behavior changes, so does my strategy. Market movement is the ultimate truth. I am not trying to outsmart or outguess it. I live in the here and now. My mind is open to possibilities.
* Motionlessness. I am objective and calm. I am a detached observer. I don’t get angry about stocks not doing what I expected. I know they do what they do and that the market is what it is. I don’t get frustrated with stop losses; they are part of the game. I don’t get overexcited with winning trades; they are just one more confirmation of my correct approach. I feel good about my trading and about myself. My performance as a trader doesn’t reflect on my self-worth.
2. Morning Tune-up after a Wining Day
* I am relaxed and confident. I have an optimistic, winning attitude from yesterday. I remember the feeling of doing the right things, and I am going to repeat those things today. I am focused. I can see everything that happens. I evaluate events quickly and precisely. I see myself in control.
3. Morning Tune-up after a Losing Day
* Today is a separate day, which has nothing in common with yesterday. Today’s performance is fresh. It is I who has the power to do the right things. The stock market has no power over me. It’s not after me. It has no memory of yesterday, and neither do I. I remember how I feel when I win. I am going to remember this feeling of victory. I can identify and execute winning trades.
4. Recovery after a Losing Streak or a Heavy Loss
* I am starting fresh. I know what to do to win. I am doing the right things right now, and not trying to get back my money. I am not taking revenge; there is no one to fight with. I am taking it slowly until I get a good feeling. I am not complaining about my loss. I paid money for the lesson. Now I am applying my new knowledge to my trading. I am taking only trades that match my set of rules. There is no memory of money lost; my trading account is not money. It’s a tool for making money. I am rebuilding my confidence with many small wins. They let me feel the taste of winning. I don’t let events control me. I am in control of myself. I am going to remember the feeling of every win.
5. Stop Loss
* Stopping out prevents losses. It’s not losing; it’s preventing a loss. Ia m not trying to control the market. I admit to its independence. I am willing to act in tune with it. If I find myself in the wrong place at the wrong time, it’s in m power to get out. I have the responsibility to keep my trading account in good shape, and stop loss is my way to achieve this. There is a nothing wrong in being stopped out. A stop does not make me a loser. It makes me a winner, serving as a line of defense for my account. This is my way to control events. This is my salvation. I want to be in control and be happy. A stop is not a loss. A stop prevents a loss from growing. The market is in endless motion. No trade is so significant that it’s worth holding onto if it doesn’t’ work. The next opportunity comes right away. I switch easily from the trade that doesn’t work to another that will. I enter any trade accepting in advance that it can stop me out. If the trade doesn’t work out, it won’t come as a surprise to me. My trading strategy has the inevitability of losses built into it. But no single loss can get out of my hand.
6. Fear of Trading, Hesitation to Pull the Trigger.
* Trading is a game of probabilities. I don’t have to be right every time. I just have to follow my rules. I know my system works. Every trade is either a profit or a stop. Any given trade is not of significance. The results over a certain time period are what matter. Trading within my proven system puts the odds on my side. I have to play to allow opportunities to materialize. I know I can trade by my rules. All I do is react to signals, a signal to enter and signal to exit, that are generated by my system. They take me in and out with no hesitation. I can observe the market and emotionally detach from it. Any stock movement is simply numbers that change following certain patterns. I know how to read those patters. I am totally focused on what the market is telling me. I can hear it and react to it.
7. Letting Winners Run.
* I don’t have to be right all the time. I don’t have to take a profit as soon as my position shows one. I have to sell when my system generates a sell signal, not when I have a profit. My goal is to play within a set of rules, not to make money. Things once set in motion tend to remain in motion. I want to ride them while they move. I just trail my stop until the stock proves that it has reversed or until a sell signal is generated. My system is profit-oriented. I am going to let it generate profits.
8. Overtrading
* I have only one reason to put on a trade. This reason is a valid setup in terms of my system. There are no external influences that can make me trade. Boredom is not a reason to trade. Being down for the day is not a reason to trade. The market doesn’t care about my being up or down. It generates profitable opportunities regardless of what I want. I wait for the market to create a situation I can recognize. I am not eager to find the trade. I will know when it comes along. I don’t have to be in the market all the time. I sit and wait for the right opportunity. My money works when it’s in a trade that exploits a profitable opportunity. My money works when it’s sitting on the sidelines being ready for the right moment.
There is a time and a place that every single one of these mantras are relevant in one’s trading. Whether you’ve had a rough day and you’re nervous about the upcoming trading session, or you’re on a roll and you feel like money is pouring into your account at light-speed, always be aware of how emotions can effect your trading. A great defense always trumps a great offense.
How I personally use these mantras is I take a few minutes before the market opens to read it to myself a few times. Allow the words to sink in, almost at a subconscious level, so when you’re presented with an opportunity, you’re able to take it without thinking. That’s where you’re best trading will be done.
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Article B:
You’ve Got a Great Trading System… So Why Are You Losing?
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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... newbie 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”.
He/she reads a chapter in his/her 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 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 these systems have lost. Why? They were not in control of their emotions. Are you?
Source: http://sefindotrader.blogspot.com/2008/09/youve-got-great-trading-system-so-why.html
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One of my favourite general affirmations is:
"Fear of pulling the trigger is warranted when you don't have an edge...fear of NOT pulling the trigger is necessary when you have one"
These are examples of the crazy things I've been telling myself any time I consider deviating from the plan. They are tailor-made for my particular difficulties.
It's had an enormous affect on my results
source: http://onlythemomo.blogspot.com/
A story to begin
http://www.startribune.com/business/35288814.html?page=5&c=y
When Wolke started trading, he had just $4,500, a sum that could be wiped out in a single morning. He had spent two years at the exchange as a floor clerk, making $48 a session marking down buy and sell orders. But he was good at games, particularly chess and poker, considered litmus tests at the hyper-competitive exchange.
His goals were modest: To make at least as much money as he did serving drinks, and to gradually earn enough to move into a nicer apartment. His Uptown rental had leaky pipes, mold growing in the kitchen, and a hole in the ceiling "as big as two watermelons," he said. "I remember thinking, if I lose $250, then get out, because that's what I'd make bartending a night or two."
His new career almost came to an abrupt halt about nine months after he started. One morning, convinced that the market would rally, Wolke bought 10 wheat contracts -- equivalent to 50,000 bushels. It was a huge position for a novice trader. As the market fell, he refused to accept that he made a bad trade, and then panicked and sold when it bottomed. He faced a $8,000 margin call.
Suddenly, trading no longer seemed like a game. If he didn't pay, a collections guy would be calling, and his new career over. For three hours, Wolke stared at his apartment wall, unable to move. "Trading was one of the few things I ever truly loved doing, and I felt like I had failed."
Wolke maxed out two credit cards and the next morning, he was back on the floor, in an octagon-shaped area known as "the pit," yelling buy and sell orders with the whole force of his lungs. If he missed again, he would probably have to file for bankruptcy.
He heeded the lesson of his loss, refusing to hold firm opinions about where the market was headed. Within three weeks, Wolke recovered the money. Two months after that, he was up $20,000. And within a year, he had pocketed $1 million, largely by riding the upswing in commodities prices. He made about one-third of that sum in February, when many commodities were setting record highs.
"Opinions are dangerous," he said, after a Monday session in which he lost more than $10,000. "A lot of people think they know what the wheat market looks like if they look at a crop report. But if some big hedge fund is coming in and buying a billion dollars worth of wheat, wheat is going to go up."
A pit bull
Wolke typically arrives at the pit at 9:15 a.m. He mills about, often ignoring the flurry of reports on weekly crop conditions that might give a window into harvest yields -- the reports that help define the moves of more veteran traders.
At the 9:30 opening bell, he charges to the center of the pit. A former hockey player at Ohio State, Wolke isn't afraid to get physical, sometimes tugging at shirts to make sure brokers hear his trades.
Within his first six months, he was hit with a $500 fine for elbowing a floor broker in the stomach. Wolke claims the broker refused to acknowledge his order. Soon after, Wolke was fined again for swearing at the same broker. (The exchange allows foul language, except when directed at someone.)
"My general attitude was, 'I don't have any idea what's going on and I shouldn't pretend that I do,'" he said. "That may have helped me see things more clearly."
Indeed, Wolke's lack of trading experience may have been an asset. It freed him from preconceived notions about how commodities markets should work -- at a time when they were being turned upside down by the flow of new money.
Instead, he followed the money. He watches electronic trading markets and news wires closely from a handheld computer that he wears around his neck -- the first trader to do so. When he sees a fund buying or selling a large block of futures, he often assumes others will follow. In the buying orgy of earlier this year, he was usually right.
On a day in late February, he made more than $100,000 in a single four-hour session. He spent $2,000 of it that night, buying food and drinks at downtown Minneapolis restaurants for fellow traders.
"When the market was first getting hot, there was a lot of celebrating," he said. "You'd double your net worth in a day and say, 'OK, let's go out and have a good tine.'"
But since the commodities bubble burst, there's little to celebrate. He recently lost money on four consecutive sessions, prompting him to take a day off to relax and think things over. "If you're in a hole, stop digging," he said. On the day of his $16,000, 20-minute loss, he pondered why he was so quick to sell.
"There are some days I'm just bulletproof, and I'll stand in there and take $30,000, $40,000 and $60,000 hits because I'm so convinced that I'm right," he said, scarfing down a plateful of spaghetti at a restaurant in the skyway. "But the confidence just wasn't there today. I sweat a lot when I've got a bad position on, and today I sweated like a pig."
Overall, Wolke, a native of St. Cloud, has survived the downturn better than he had expected. He finally moved out of his dingy apartment and bought a modern $350,000 condo in downtown Minneapolis with a balcony overlooking the Mississippi. Another splurge: new front teeth. (His old ones were chipped and had been knocked out six times in hockey games.)
Most of his trading profits he's socked away in municipal bonds, giving him a cushion as the Grain Exchange goes all electronic in a few weeks. While he plans to try electronic trading, there's always bartending, he said.
These days, he's an active short seller, betting that prices will fall. He's still up more than $1 million for the year, but his $100,000-plus days appear over.
"People think it's easy being a speculator," said Wolke. "But if it's easy, then by all means, come right on in. It's not easy. It just isn't."
Chris Serres • 612-673-4308
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