What Kind Of Trader Are You?

Most traders confuse themselves. They sit down at their desk with an idea. An idea that they hardly understand. You have to define what your trading goals are before you press buy or sell. Break down your strategy and figure out exactly what you are exploiting. Why does your strategy work? That is the question you must answer before you really begin to make money in the markets.

You can blow off this message as I did for the longest time. You will look at the MACD or maybe your trendlines and think that your trading strategy is bulletproof. How can you say something like that unless you have dug deep into the surface of your ideas and truly understand what you are doing when you push buy and sell.

Or you can embrace this message and take a step back. Go over your strategy and figure out the core concepts behind what you do. This will not only greatly enhance your faith in what you do (this is especially important when one experiences a string of losses), but it may also point out massive holes in your strategy that could have eventually cost you a lot of money.

Do yourself a favor and ponder these questions:

What kind of trader am I? Why do I make money in the market? Where is the logic in what I do?

If you can not answer those questions you are not ready to trade. I would say 98% of people trade without first being able to obtain the answers to the above quesitons… Which is an oddly familiar statistic…

I’m Back!

Hello Traders,

It has been quite some time since I have posted on this blog. My methods have drastically changed. But I still stand by 99% of everything I have posted on this site thus far. Learning to trade is a journey and everything I did led me to where I am today.

I urge those who are finding trading to be a less than profitable experience to continue learning and pushing toward success. It takes some people as long as 10 years to achieve such a goal, but all would agree that it is worth the hardships they faced. The very hardships you are currently facing.

 

Market Sense

When a methodology or system you are using to trade sends out a signal that there is an opportunity present, sometimes you need to have enough “market sense” and discipline to ignore it. The system itself can only be used as a guide, if you purely trade the system it will eventually fail. For example,  a system that relies on a moving average has to have inputted parameters. Those parameters do not change with the market. Markets are an ever changing entity. There is constantly an increase and decrease in volume/activity, and parameters are not built to adjust to such changing conditions, and therefore you need a countermeasure to make sure your method stays robust. That is where logic and market principals come into play. Trading is multi-dimensional, most traders fail to see this. Ask an average trader why their system works, and he wont be able to tell you, he doesn’t understand the logic behind his method, and is in turn doomed to failure.

The Road To Riches: Giving Up

How do you minimize your losses?

Give up.

The reason most traders “blow up” their accounts is by letting their losses get out of control. You have been trained and conditioned your whole life to think positively and never to give up or back down. That sort of thinking will reek havoc on an equity curve.

The trick is to enter every trade with the mindset that you are wrong. Being able to admit defeat is probably the most admirable trait a trader can have.

The Only Thing You Should Try and Pick is Your Nose

Trying to consistenly pick tops, and in this case bottoms, is a dangerous game. Leave this up to the professionals, the professionals who want to lose their jobs and client’s money.

Wait until a clear cut uptrend has formed before going long in anything. Don’t get caught with your finger up your nose.

Remember, a trend only reverses once. Think about that statement for a while, its a testamate of how easy trading can be.

Trading, What You Think You Know

Always be skeptical about what you think “works” in trading. Even if you have seen it work with your own eyes countless times. You need to fully understand why something happens, not just see something happen.

I recently disproved a lot of theories I had regarding trading and the market. It is sort of discouraging to have all that work just go to waste, but as Thomas Jefferson once said “I have not failed, I have found 10,000 ways that do not work”.

Stepping Up My Game

Covered In The Pre-Market Hours

As soon as 8AM hit I was awake and excited to cash out of my Apple short holdings. Before the bell Apple had dropped another 2 points, and I entered my orders accordingly and took my profits for one of the best trades of my career.

The only thing you can learn from this is that the market can do anything, you just have to be ready for it. Have a plan for every contingency!

AAPL, A Revel In My Victory

“Apple said its current-quarter earnings would be well below Wall Street targets, sending shares in the maker of Macintosh computers and iPod music players down nearly 9 percent in after-hours trading.

While Apple has a reputation for giving conservative financial forecasts, its view for the fiscal fourth quarter undercut analyst expectations to a deeper degree than in past quarters, prompting investors to seek more details.”

-CNBC

I am short AAPL (currently AAPL is down 16.59 points, and it is 1AM, we will have to see what the morning brings)

Sorry, But The Market Has Been Good To Me

I apologize to any of my readers, or any visitors who have came to my site recently. I have not been updating as regularly as I should, and for that I am sorry. I have been trading very well, and this blog has taken a back seat to my success. I did not just create this blog for me, it is for any trader who is lost in the markets, losing money, and has no place to go. So, I will continue to post, and update my entries, for if I can help just one person become successful, learn to trade, and make a living doing what they love to do, then I will feel like I have made a real difference in this world.

I have learned a lot since the last time I made a post, and will be sharing this information shortly, so stay tuned and visit often