Useful things I've found on the Net.

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Old Feb 29, 2008, 7:17am   #1
 
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Useful things I've found on the Net.

Over the years of gradually getting better I've run into lots of useful stuff on the internet. So I thought I'd start a thread and put some of it in here along with a link to where it came from to avoid offending the original authors:

My best advice:

1. Do not trade all day. Trade the first 90 minutes or so. Many of the best opportunities happen in the morning while price discovery is taking place. If you must trade to the close, come back for the last hour! I personally find that after making a number of good trades in the early part of the am, if I continue to trade its often a case of getting stuck in the chop and giving back the easy money made earlier. Its just not worth it.

2. Limit the number of trades you do. Teresa Lo limits herself to 3 and rarely breaks that rule. She has a ton of discipline. I wish I had inherited her discipline much earlier in my trading career. That one step improved my trading tremendously. If you know you only have three stabs and then you are out, you aren't going to waste them. Trust me on this.

3. Know what you are trading. No one, in real time, can be master of all setups and trading styles. Until you can be consistently profitable day trading, I would pick one or two setups and only trade them. You may go all day without having a single setup appear (unlikely) but if thats the case, don't do it. Even now I have only two primary setups - test

4. Get your mind around why overtrading is happening. If you can quash that "problem" (I believe it to be, been there done that) you will probably succeed in enforcing the discipline required.

Position and swing trading is much easier, in stocks, IMO. You have time to contemplate your moves and are not under the real time gun. You might even question why you want to day trade. Some people I think switch to day trading just to get an adrenaline kick, when in fact they might be far more successful as position traders.

There is something very appealing about getting all that time back. Using only end of day data, orders transmitted at the open, you then get the day to yourself to do something else.

I switched to day trading futures some time ago and do not day trade stocks at all, much to my (stock) brokers disappointment I am sure. I have never looked back - futures allowed me to focus on improving my trading, not trying to find 'the' best stock(s) to trade on a given day.

Just some musings. Oh, a final comment. I believe a person makes it as a trader when the act of trading becomes boring. I tell ya, sitting all day waiting for a setup to happen along is boring!

mw

http://www.dacharts.com/articles/MW_Best_Advice.htm
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Old Feb 29, 2008, 10:18am   #2
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Thanks for bringing that up nine, found two good articles from that site:

Price Action

and

The Myth of Tight Stops

KISS, all you'll ever need.

But then it's not the knowing what to do, it's the actually doing it.
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Old Feb 29, 2008, 1:12pm   #3
 
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Quote:
Originally Posted by BSD View Post

But then it's not the knowing what to do, it's the actually doing it.
Haha, so true!

After last week's huge missed opps (talking about a 600pip profit, from memory), I now think, "F*** it!" and pull the trigger (obviously assuming signals and setup is there).
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Old Feb 29, 2008, 2:11pm   #4
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Ninja, yup.

Don't worry about what was, there'll always be loads and loads of new opportunities.

I closed out a trade way to early with a small profit in the Dax today because I was feeling grumpy, had to go to the dentist, and it's Friday afternoon, lol, none of which is even remotely a good reason to close the trade when I did.

I come back right now, check what happened then, and of course, what do you think, I took my profits way to early, and against ALL my rules, and the Dax just kept on going down down down.

Knowing what to do is easy.

Preventing brain farts from taking over is the hard part.
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Old Feb 29, 2008, 9:29pm   #5
 
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nine started this thread And one from Howard's Trading Tips Newsletter at Ensign Software:



Thoughts about Full Time Trading
by Jay West

If you are serious about trying to become a successful full time trader, I offer these comments. If not, stop reading. It will be a waste of your time.

It takes a special mental intelligence and ability, as well as a burning desire, and personal discipline to become a successful trader. You can have the best trading template, software, and platform in the world and still may not be successful. Why is that? It is almost always the temperament and control of your emotions that determines your destiny. Everyone needs to work on and improve/change this personal situation to eventually become what they want to be in trading. Trading discipline is born from emotional control. Usually traders are their own worst enemy. That, coupled with their trading environment that is. Trading environment is critical to success, but not as critical as the control of ones emotions. You must gain control to be successful. There is no substitute for this control. Nothing you can do to offset this deficiency will help. How do you know if you are out of control? Trading the money is probably the most universal tip off that you are out of emotional control. The lack of ability to stop trading when you are losing is also a good indicator.

How do you control emotions? Simply by trying to develop patience and making your focus the system and not the end results of your trading actions. Stay immersed in the present. In other words, stay immersed in the process of trading. Reading the charts, the indicators, the momentum or lack of it in the market. Thats the way you communicate with the market and overcome emotional urges. Do not try to outguess the market. Stay away from outcomes or as I call it what if thinking because that destroys your objectivity and focus on whats important and creates negative thought processes. If a golfer focuses on whether or not he will make a three foot putt and the consequences of missing it instead of the process involved in making the stroke required to have a successful outcome he will surely miss that putt. He places a huge monkey on his back by worrying about the consequences of making or missing that putt. Especially if there is pressure to make the putt such as a double or nothing bet, carrying his share of the load in a two man team event etc. The same thing happens in trading except that there is usually much more pressure associated with that activity. It can be almost a life and death situation if you allow it to become that. This outcomes or what if thinking causes you to lose your focus on the really important things that will help you be successful. Whats important is the step by step process of trading. It really is as simple as that. At least it was for me. Once I gained that perspective on approaching the market, I had the control I needed and things started to get better. Just remember the only thing you can control in trading the market is how you react to the things you are seeing. Control of your emotions is critical in reacting in the correct manner to what you are seeing.

Lets get personal here. I had a non supportive family (my wife hated me trading), a small account, and a lot of un-success to overcome when I started trading. Sound familiar? The only way I got out of it was to develop a resolve that I would be successful and disprove all the nay Sayers, no matter what. More importantly, I decided that I would gain a patient attitude and slow things down in my trading world. I adopted this concept of slowing things down from statements I saw from highly successful professional athletes and some teaching principles I used in teaching Leadership in Army service schools. When Pro golfers, Pro basketball players, and interestingly enough NASCAR drivers are being highly successful, it is like everything slows down and it becomes easy to see what to do and how to do it. Under the tremendous stress of combat, the same thing occurs when a leader is operating properly. It is like everything is in slow motion. With this concept in mind, I picked the AB to trade because it seemed to move slower than the NQ or ES. I tried to select methods and time frames (R100 and R75) that were slower paced in terms of signals. That would slow things down for me and allow me to gain control of my emotions and decision making processes. I got lucky. I found a great chat room where a man named Woodie showed me the way to remain calm in the face of adversity and that a better trade was surely coming. I also found a great software company called Ensign Software and was able to develop some fairly good templates that supported those goals. The main thing I did however was to make a conscious decision to grab my emotions by the throat and control them. I wanted to be in control of me. Simple as that. I would refuse to let anything or anyone deter me from that basic goal. It has worked, but every day is a new struggle to accomplish it. But once it has been done, the confidence is there that helps you do it over and over again. It never goes away, this quiet panic that most traders live with. You just learn how to control it. Do this one thing and it will be easier to gain the success you crave.


February 2005 Trading Tips Newsletter
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Old Mar 1, 2008, 2:22am   #6
 
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nine started this thread Something you see in a few variations. Worth thinking about where you are and how to move forward a few steps:

38 Steps To Becoming A Trader


The original article was published in 'CTCN' by "Anonymous Trader".

1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence.

Fear starts setting in.

8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

Most people will give up at this point, as they realize work is involved.

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.

26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.
30. 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.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.

34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. 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.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Trading Day by Day: 38 Steps To Becoming A Trader
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Old Mar 1, 2008, 7:35am   #7
 
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Quote:
Originally Posted by nine View Post
And one from Howard's Trading Tips Newsletter at Ensign Software:



Thoughts about Full Time Trading
by Jay West

If you are serious about trying to become a successful full time trader, I offer these comments. If not, stop reading. It will be a waste of your time.

It takes a special mental intelligence and ability, as well as a burning desire, and personal discipline to become a successful trader. You can have the best trading template, software, and platform in the world and still may not be successful. Why is that? It is almost always the temperament and control of your emotions that determines your destiny. Everyone needs to work on and improve/change this personal situation to eventually become what they want to be in trading. Trading discipline is born from emotional control. Usually traders are their own worst enemy. That, coupled with their trading environment that is. Trading environment is critical to success, but not as critical as the control of ones emotions. You must gain control to be successful. There is no substitute for this control. Nothing you can do to offset this deficiency will help. How do you know if you are out of control? Trading the money is probably the most universal tip off that you are out of emotional control. The lack of ability to stop trading when you are losing is also a good indicator.

How do you control emotions? Simply by trying to develop patience and making your focus the system and not the end results of your trading actions. Stay immersed in the present. In other words, stay immersed in the process of trading. Reading the charts, the indicators, the momentum or lack of it in the market. Thats the way you communicate with the market and overcome emotional urges. Do not try to outguess the market. Stay away from outcomes or as I call it what if thinking because that destroys your objectivity and focus on whats important and creates negative thought processes. If a golfer focuses on whether or not he will make a three foot putt and the consequences of missing it instead of the process involved in making the stroke required to have a successful outcome he will surely miss that putt. He places a huge monkey on his back by worrying about the consequences of making or missing that putt. Especially if there is pressure to make the putt such as a double or nothing bet, carrying his share of the load in a two man team event etc. The same thing happens in trading except that there is usually much more pressure associated with that activity. It can be almost a life and death situation if you allow it to become that. This outcomes or what if thinking causes you to lose your focus on the really important things that will help you be successful. Whats important is the step by step process of trading. It really is as simple as that. At least it was for me. Once I gained that perspective on approaching the market, I had the control I needed and things started to get better. Just remember the only thing you can control in trading the market is how you react to the things you are seeing. Control of your emotions is critical in reacting in the correct manner to what you are seeing.

Lets get personal here. I had a non supportive family (my wife hated me trading), a small account, and a lot of un-success to overcome when I started trading. Sound familiar? The only way I got out of it was to develop a resolve that I would be successful and disprove all the nay Sayers, no matter what. More importantly, I decided that I would gain a patient attitude and slow things down in my trading world. I adopted this concept of slowing things down from statements I saw from highly successful professional athletes and some teaching principles I used in teaching Leadership in Army service schools. When Pro golfers, Pro basketball players, and interestingly enough NASCAR drivers are being highly successful, it is like everything slows down and it becomes easy to see what to do and how to do it. Under the tremendous stress of combat, the same thing occurs when a leader is operating properly. It is like everything is in slow motion. With this concept in mind, I picked the AB to trade because it seemed to move slower than the NQ or ES. I tried to select methods and time frames (R100 and R75) that were slower paced in terms of signals. That would slow things down for me and allow me to gain control of my emotions and decision making processes. I got lucky. I found a great chat room where a man named Woodie showed me the way to remain calm in the face of adversity and that a better trade was surely coming. I also found a great software company called Ensign Software and was able to develop some fairly good templates that supported those goals. The main thing I did however was to make a conscious decision to grab my emotions by the throat and control them. I wanted to be in control of me. Simple as that. I would refuse to let anything or anyone deter me from that basic goal. It has worked, but every day is a new struggle to accomplish it. But once it has been done, the confidence is there that helps you do it over and over again. It never goes away, this quiet panic that most traders live with. You just learn how to control it. Do this one thing and it will be easier to gain the success you crave.


February 2005 Trading Tips Newsletter
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Old Mar 1, 2008, 8:54am   #8
Joined Aug 2003
Limit the number of trades you do. Teresa lolimits herself to 3 and rarely breaks that rule. She has a ton of discipline. I wish I had inherited her discipline much earlier in my trading career. That one step improved my trading tremendously. If you know you only have three stabs and then you are out, you aren't going to waste them. Trust me on this.
Who is this Teresa lo?

Last edited by gamma; Mar 1, 2008 at 8:55am. Reason: spelling
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