1) What is the quality of your self-talk while trading? Is it angry and frustrated; negative and defeated? How much of your self-talk is market strategy focused, and how much is self-focused? Is your self-talk constructive, and would you want others to be talking with you that way while you’re trading?
2) What work do you do on yourself and your trading while the market is closed? Do you actively identify what you’re doing right and wrong in your trading each day—with specific steps to address both—or does your trading business lack quality control? Markets are ever changing; how are you changing with them?
3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control? Do you have and strictly follow risk management parameters?
4) Does the size of your positions reflect the opportunity you see in the market, or do you fail to capitalize on opportunity or try to create opportunities when they’re not there?
5) Are trading losses often followed by further trading losses? Do you end up losing money in “revenge trading” just to regain money lost? Do you finish trading prematurely when you’re up money, failing to exploit a good day?
6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to make large profits? Do you become stubborn in positions, turning small losers into large ones?
7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied? Are you having fun trading even when it’s hard work?
8) Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs—for excitement, self-esteem, recognition, etc.—that are not being met in the rest of your life?
9) Are you seeking trading success as a part-time trader? Would you be seeking success as a surgeon, professional basketball player, or musician by pursuing your work part-time?
10) Can you identify the specific edges you possess over the many other motivated, interested traders that fail to achieve success in the markets? Do you really have an edge, and—if so—what are you doing to maintain it?
For some of you who are not familiar with Brett N. Steenbarger, he is Director of Trader Development for Kingstree Trading, LLC in Chicago and Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY. He is also an active trader and writes occasional feature articles on market psychology for a variety of publications.
2) What work do you do on yourself and your trading while the market is closed? Do you actively identify what you’re doing right and wrong in your trading each day—with specific steps to address both—or does your trading business lack quality control? Markets are ever changing; how are you changing with them?
3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control? Do you have and strictly follow risk management parameters?
4) Does the size of your positions reflect the opportunity you see in the market, or do you fail to capitalize on opportunity or try to create opportunities when they’re not there?
5) Are trading losses often followed by further trading losses? Do you end up losing money in “revenge trading” just to regain money lost? Do you finish trading prematurely when you’re up money, failing to exploit a good day?
6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to make large profits? Do you become stubborn in positions, turning small losers into large ones?
7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied? Are you having fun trading even when it’s hard work?
8) Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs—for excitement, self-esteem, recognition, etc.—that are not being met in the rest of your life?
9) Are you seeking trading success as a part-time trader? Would you be seeking success as a surgeon, professional basketball player, or musician by pursuing your work part-time?
10) Can you identify the specific edges you possess over the many other motivated, interested traders that fail to achieve success in the markets? Do you really have an edge, and—if so—what are you doing to maintain it?
For some of you who are not familiar with Brett N. Steenbarger, he is Director of Trader Development for Kingstree Trading, LLC in Chicago and Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY. He is also an active trader and writes occasional feature articles on market psychology for a variety of publications.
Very nice, m. Tks.:)
ReplyDeletediogenesthefog - be aware that the most liquid stocks are 70% HSTrading by Computers - dynamically adapting to conditions, and slice/dice big blocks into invisibility - don't even try to 'day trade' against these stocks, the traditional technical patterns are valueless excepting as 'sucker-traps' computer designed, to take your money - there hasn't been a 'in-the-wild-native-species' of technical pattern for YEARS, since say 2003
ReplyDeletediogenesthefog - likewise, continuing remarks, Krishna 'mindfulness discipline' is needed, all EGO derived Fear, Hope, and Greed must be banished -
ReplyDeleteyou speak to no-one, so soon as YOU are involved, you lose ! Take no Pride, take 'the other guys money', that is all, not more, in the 'zero sum game' called trading
diogenesthefog - there is no such thing as simple statistical hedging away the risk, you want diversity, use ETF's the few that are actually liquid enough. But it will make little difference, in REDUCING the risk.
ReplyDeleteyou, rather, increase both the risk and the leverage using focus, intensity, and timing - one stock, one event, one shot, one kill.
don't paper-practice, do the real thing, but small small lots, til you get the feel, never 'hurry' no matter what the perceived 'opportunity cost' of being mostly 'out of the market of the moment' seems to be.
You are 'the market', one side of it
The other side, a Solipsism of the moments price/volume event is the other side - an aggregate of True Believers who think you are wrong
seller/buyer at the trading event - are they both 'right'? one side is gonna wait a long long 'long term' to realize his truth, your idea must be right, right now!
do not tell anyone about either your sucess or your failure - which made you a genius or an idiot, not more than your last trade - do not tell yourself you are genius
ReplyDeletefocus, intensity, timing - 'take the other guy's money' that is all, not more
Generally FOREX is deep enough that the Super Traders with their neural net supercomputers located milliseconds, tcp/ip from the exchange computers - don't quite have the total 'pirates edge'
FOREX is simply finding out Government policies, regards supporting National Interests - HERE you trade WITH the Central Banks, WITH the National Policies, you will earn a tidy, modest, constant income, somewhat better than being Shark lunch during the day trade in the 'stock' market
'take what the other guy offers you' that is all there is, no more