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Sitting still.

I see dead zombies :-)

3 Keys to Flawless Execution

By Steve Ward | TradingMarkets.com | October 18, 2010 09:05 AM

“The proper execution of your trades is one of the most fundamental components of becoming a successful trader and probably the most difficult to learn. Most traders find it is much easier to identify something in the market that represents an opportunity, than it is to act upon it.” — Mark Douglas
The Two Keys To Successful Trading


If we consider that the two key variables to achieving trading profitability are having a trading strategy with edge and positive expectancy combined with the ability to consistently execute that strategy, then assuming a trader has the first one (and developing this is a primary concern) then it is the consistency of execution that becomes the key focus; and indeed the main challenge for many traders.

It is useful at this stage to reflect on where you are at with your trading in relation to these two variables. Take a look at the diagram below and see which quadrant you are in. If you are in 3 or 4 then your primary goal is the development of a trading system/strategy with an edge in the market. If you are in 1 then you should theoretically be returning profits over time and the challenge for you is sustaining this level of performance. If you are in quadrant 2 then the primary challenge is execution. Identifying where you are, is stage one; stage two is then setting some appropriate goals and targets to move you towards quadrant one.

Flawless Execution
In my work with traders I have seen many of them find this consistent execution challenging. One of the key aspects that seems to distract traders is excessive focus on P&L and the outcome and results of the trade. That is the trader is so distracted by thoughts around outcome and money to be made/lost that they do not have sufficient focus on the key components of executing their trade to achieve the best outcome. Likewise traders who are low in confidence fail to execute their trades and take opportunities when they arise losing valuable potential profits.
To help with the above two challenges I encourage the traders that I work with to focus on the flawless execution of their trading strategy as opposed to overly focusing on P&L and results.
In the trading process we have 5 core components:

1. Monitor – watching the markets
2. Spot – spotting a trading opportunity
3. Enter – enter the market, place the trade
4. Manage – management of the position
5. Exit – close the position out

In flawless execution the trader focuses on the process of each of the 5 steps and aims to do each one as well as they possibly can. They evaluate their trading performance against the quality of their execution of the trade alongside it’s profitability.
Three key factors enable flawless execution – confidence, focus and discipline. Many traders inconsistent execution of their strategies can be linked back to factors that are encompassed under these three headings

By developing these three areas and shifting your mindset to that of ‘flawless execution’ you may find that the quality of your trading improves and you experience less high negative emotional states such as fear and anxiety. A focus on flawless execution is actually a preventative approach to many of the common challenges and barriers faced by the majority of traders.

Nine Practical Strategies To Enhance Flawless Execution
Below are the three areas of confidence, focus and discipline with some bullet point practical tips that you can take away and implement within your own trading to improve the execution of your trading strategy.
Confidence

• Profitable Trading Strategy With Edge In The Market (Positive Expectancy)

• Trade In Line With Your Current Ability Level – recognize where you are (beginner, novice, competent, expert, master) and trade an approach that is appropriate for your level of skill, knowledge and understanding. Anxiety and fear increase and confidence decreases when we are exposed to challenges that are too great for our perceived capabilities (See table below). The development of competence through ongoing education, coaching, mentoring and self-learning is absolutely critical in underpinning your confidence levels. Confidence is greatly underpinned by your competence!

• Trading In Line With Your Strengths, Interests and Best Potential For Profitability

Matching challenge and capability enables you to enter the flow state and trade at a higher level of performance. Where challenge exceeds capability anxiety, panic and worry are natural. Where challenge is too low for capability then boredom and apathy are usual.
Focus

• Process – focus on quality execution of each of the five stages of the trade model – what states and what actions

• Controllables – only aim to control what you can control!

• In The Present Moment – thoughts about the past and the future are not helpful in the moments of execution. Keep your attention in the now. Try this – get a ball or similar; throw it in the air; catch it. When the ball was in the air what were you focused on? Catching the ball hopefully! Not dropping it, or the shopping, or what you will be wearing tomorrow – your attention was in the moment.

Discipline

• Take Appropriate Risk (Low Risk for most people!) – high risk (outside of your psychological and financial thresholds) creates high emotion and specifically fear and anxiety – it stops many traders from entering trades, and it stops others from executing their stop losses and also encourages the taking of profits early. Low risk trading in line with your own personal threshold and trading capital and personal wealth makes for a less emotional more confident trading experience. A large majority of beginner traders who come to me regarding experiencing anxiety and fear in trading are simply taking too much risk!

• Trade In Positive States – tiredness, anger, frustration, stress are all states that are limiting to you trading to your full potential. High negative states impact on your ability to think rationally, to make objective decisions and to apply your strategy as blood flow to the ‘smart brain’ is reduced during these ‘negative’ emotional responses and your ‘emotional’ brain starts to run the show! Aim to trade when you are at your best, or close too! Think about a 1-10 scale where 10 is your Ideal Trading State and 1 is ‘get me away from a trading screen now!’ – notice the levels at which you feel confident to trade at and also those scores which are a definite no trade zone.

• Reward good trading and not P&L. Many traders feel good when they make money, and this feeling is often greater than the feeling of executing well but losing money. The focus here is on the monetary reward and not on the execution. This may sound OK to you right? If our goal is to condition flawless execution then we need to reward flawless execution. It is possible to make money through poor execution, through random gambles in the market – should these be rewarded? We need to associate ‘pain’ to poor trading behaviors and ‘pleasure’ to positive trading behaviors regardless of financial outcome. This is a challenging concept for many people and requires a change of thinking and mindset – however consider this… the difference between the best traders and the rest is that the best traders think differently! (Mark Douglas, Disciplined Trader).

Below is a table of the nine practical strategies. Take some time to reflect on which ones you have in place (perhaps mark this on the table) and then have a look at where there are areas for improvement. Select one that you feel will have an impact on your trading in the short term and set the implementation of that as a short term trading goal. When you are happy that is ingrained into your trading process come back to the table and select another one. Your goal is to cover all nine areas – be focused on flawless execution and see your performance improve.

Conclusion
Flawless execution is an approach to trading – a philosophy. It is all about setting yourself up to be successful and to focusing on execution and not on P&L. This approach may not be for everyone, however from the work I have done in training and coaching traders I know that for the vast majority of people the impact on your trading is likely to be extremely positive!
Focus on ‘Flawless Execution’ and feel the difference.
Steve Ward is a trader performance and psychology coach at Trade With Precision. He has over 15 years of teaching, training and coaching experience and has worked with home, proprietary and institutional traders and groups across Europe, USA and Asia including consulting on trader recruitment, selection, assessment, training and development. He is an active FX trader and a regular trainer at the London Stock Exchange

RECAP

3 scenarios:

a. trend (nowdays 10%) - breakout ....change of momentum.....trade 1st opportunity...no target, trails
b. mixed (nowdays 30%) - pullback.....stay of momentum....trade 2nd opportunity....has target
c. chopped (60%) - fade...... out of momentum.....extreme contra candles...has target

Candle types:
Doji....range market...undecided
Body....directional market...decided
Body plus leg...mixed...to be confirmed by next candle or ema

Mind state:
Zen Clear   :)

Bonus Pattern:
SU1

Set up
Price, EMA (previously WMA), standard Bollinger, micro line, MACD modified

Previous objective:
SU1 (USD 1000 move).... ha ha ha....silly me...

Current objective:
USD 70 per entry.....2 times per day: USD 140
Monthly target: 20 days x USD 140 : USD 2800

Against all odds

I have no option but to stick to the current provider as other ISP can't accomodate my request. Up to 7 days off.

So I have all the time to look back what I have been doing so far.Despite all  odds, the good thing is I still have the motivation to trade!

I also found that I done a lot of thinking while trading : "What if "- a symptom of nervousness.
To be succesful in trading, I need a VERY CALM MIND

Stop loss

Due to regular hiccups of my broadband, I decided to call their CS and told them I want to terminate the line.
I want to stop my further losses of opportunity.
I want to focus on my trading, not fixing line....I'm sure that I'm a super duper online trader if I'm in Middle East, Europe , Japan or USA.

Looking back the missed session...yeah, still a masterpiece

Masterpiece

Previous posting mentioned that I will trade between the lines...so I just drew all lines possible in my chart....: peak to peak, valley to valley.....nearly 20 lines criss-crossing previous day chart..and current chart.....I will let the lines projected towards the next day

Looks like a masterpiece to me  so I will not erase these lines as I did before.....

BTW, I found that MACD behave like TSI and vice versa..and some traders agreed..coincidence?

So I put in MACD modified with DMI ADX...but these indicators are not my primary tools... the masterpiece lines are neither my primary tool....my primary tool is my confidence..I need to build my tool..erp..build my confidence. Yes I know..cliche...but its true


CCC
Consistency in taking trades according to trading plan
Confirmation of market signals to get better chance
Confidence build-up
************************

Article by Pamela Wheatly

We are always looking for the perfect trading strategy – the one that will present clear
signals and deliver winning trades time after time. We know it doesn’t really exist, but we
are always hopeful! There are many strategies used by successful traders, so is it
perhaps the trader who is the winner, rather than the strategy? There is also the problem
of changing market conditions. Sometimes a strategy which has worked well for a period
of time suddenly seems to fail, or there are no signals, so flexibility is also important.
This morning I was watching a video clip that promised to reveal to me a ‘new’ scalping
strategy........... and I found it was exactly the same as one I already use, so there is
nothing new. There are just variations and refinements of strategies created using sound
technical analysis principles. If you understand these principles you will be able to
construct your own strategies. These will be the ones best suited to your particular trading
style and risk tolerance.

Once you have a well-constructed strategy which has been thoroughly back-tested, and
forward-tested in simulation mode, there are three more important things to consider that
go a long way to making winning traders. They are consistency, confirmation and
confidence (and I wasn’t looking for three words beginning with “C” – it just happened!)


Consistency
It is important to have faith in your strategy and to be consistent in your approach, because
you will have times (at least until you become experienced) when you have runs of losing
trades. A few losing trades are not an indication that you should change your strategy or
give up. Chopping and changing your strategy will never give you consistent results, but if
you stick you your rules and keep taking trades when the signals appear you will start to
achieve consistency. Successful traders keep taking trades, whenever a signal appears
that matches their criteria.

Confirmation
Confirmation of signals is critical! The more confirmation you have that a market is going
in the direction you want, the more likelihood there is of success. On the other hand, if
you always wait for all your ducks to be lined up perfectly, you will miss a lot of good
trades! A simple trading plan is easier to execute than one which requires a large number
of things to fall perfectly into place. So, always wait for confirmation before entering a
market.

Confidence
Once a market has given you an entry signal, and you have some confirmation, proceed
with confidence. It is often difficult to push that button, and quite often you will have a
losing trade; but if you persevere, follow your trading rules, and push through the pain
barrier, you will find your confidence grows; and as confidence grows your trading will
improve. This will in turn generate more confidence.

Trader's Oath

http://www.learntotradethemarket.com/forex-articles/a-successful-forex-traders-constitution-part-2/
by Nial Fuller
 
I am a proficient, disciplined and profitable trader. I enjoy trading to make a profit. I honour the responsibility I have to myself and to those who are watching and depending on me to be such a trader. I continue to educate myself on how the markets work and I also continue to educate myself on how the mind works so that I incur the necessary discipline to execute the right actions for my success. I know how to determine market direction and I have a simple trading methodology that has an entry and two exit strategies, one for profit, one for loss. My trading methodology feels comfortable to me, is easy to understand, obey and execute. I have a set of trading rules that make sense to me and I obey those trading rules. I always trade with a protective stop. When i find a trade, I create that trade and trade my plan. If my currency of choice does not fit my trading methodology, I look for another trade in another currency. If I cannot find a trade, I am patient until the market meets my criteria. Each trade either wins me pips or experience.

Trading between the Lines 2

After a long time....I scraped wma.....some said moving average is the most useful tool for most traders but I found that I could be distracted by it....It will be be replaced by pivot... I'm going into 'trading between the lines' concept...Going to learn about pivot....

So my lines of defence are:

1) Pivot (Learning stage)
2) Day OHLC
3) S & R

Pressure/Momentum  Indicators:

1) Modified MACD
2) TSI

Candle Patterns

1) Long Legs
2) Engulfing
3) Long Body (yeah...easy to remember...Longggg again )
4) SU1( this pattern is very good)

To make my chart pretty:
1) Bolingger Bands

Still, the ultimate tool is:
My eyes and brain :-)

Trading between the Lines

While trading breakout in essence is trend play, range trading can be used between OHLC lines but I need more screen time to do that. My account is small thus I need to begin with trading breakout 1st.

Missed the Rocket.....(Opportunity in CL pt 2)

Again, my youngest son decided to play my pc during CL opening , therefore I missed the rocket to the moon....I think I need to wait DST ended.....

 I tossed out that Stochastic..So my setup:

1) 1 wma (50)
2) 1 modified indicator - I named it 'worldbank'
3) Average volume 15 wma.
4) Counter check  indicator with HL,VL, MA. Range play >< 0, Trend play =0

Simple to see, simple to play.