I am constantly asked about why I wire out my account every month. My first response is always, I'm not comfortable with my money being off shore, but the reality is Suretrader has a bank here in the US that they service their US clients with, so that reason is a little weak. My fear of not having enough money to pay my taxes is another reason but if I lose it all, I wouldn't have to pay taxes on it anyway so that argument is also weak. I also say that I want to protect my gains, which is true. I like the feeling of having my gains safe from the chance of me giving it back. Am I a coward? Do I not have the true mindset of a day trader? These are the questions that I get asked, and I also ask myself at times. The truth is, for some reason I didn't realize until this weekend, I am more comfortable and successful trading with a smaller account. My trading strategy was and is based around growing a small account. What is it about trading with that mindset that makes me comfortable and more focused everyday in the market? I never really had an answer until now. One book I read over this weekend unlocked the mystery of why my strategy works.
You see for a few weeks I tried trading with a larger account well over the PDT rule. I felt this was my time to take off and not look back. It was an epic failure. I only lost about $1500 over a period of 6 weeks because I did have my risk management strategies in tact. It was like I forgot who I was overnight. I couldn't see my setups like I used to. I found myself trying to follow larger traders. I felt I had to trade like them since I was where they were. My whole mindset toward trading was different. I spent too many days watching the market in a daze, not knowing what to do. I was completely lost, just like I was when I first started trading. Toward the end of this trial I began getting some professional help from a retired hedge fund manager. I felt that I needed to get some guidance from someone who was used to trading with larger sums of money. I got good advice, but that wasn't my problem. I had lost my identity as a trader.
After this experience ended, I refunded my Suretrader account and almost immediately regained my identity. I felt that maybe this was as far as I would be able to go. I mean I almost made 100k for the year trading with my smaller account. I truly believe I would have hit my goal if I had not tried to trade larger. But at this point I had accepted the fact that I did not have what it took to trade larger, or that I just wasn't ready yet. I decided to increase my base account size I started every month off with from 5k to 7.5k at the beginning of 2016 to see how I did with it. It has worked out great. At the beginning of the month my share sizes are smaller and I gradually build up my size as the month progresses, providing I am making a profit and my buying power is increasing. Why does this work so well with me? I mean for this month of February, I started with 8k and I am up 13,688.89 for the month. Just by employing the same strategies and increasing position sizing as my buying power grows. I just couldn't understand why I can do it with Suretrader, but when I made the switch I folded up like an envelope.
I mentioned earlier that I read a book over the weekend that unlocked everything for me about how I am able to trade better with a small account versus a larger account. The book is titled, "The Power of Broke", by Daymond John, the creator of the clothing brand FUBU, and more famously known as one of the sharks from the hit TV show "Shark Tank". It talks about when you are broke, how having not a whole lot to lose and everything to gain drives you to dig deeper and work harder to get it. That "sometimes having your back against the wall, leveraging your last dollar, and having no place to go but up; because if you have to succeed to survive, you will."
This is exactly the mentality that had driven me for the past 2 years. I never knew it had a name. It is what kept me up until 2 am studying charts of my trades, other traders trades and trying to identify setups. It is what woke me up at 6 am every morning to get ready for the market before I had to go to work. It is the Power of Broke that still drives me everyday to work harder and smarter than the next guy. That 90% failure rate of new traders may just be a little low. It may be a little higher. I can tell you about 2 traders, one being myself, out of 25 who started this journey into trading together, that are still in the game. We worked harder and longer than everyone else. We were driven to succeed. You see we were older, had small kids, wanted to spend more time with our families, wanted make sure we could provide the educational opportunities our children would need to make it in this world, and were essentially broke. We had tried for years to make it the traditional way. Working a 9 to 5, trying to save $ and provide a comfortable life for our families. To put it simply, we had our backs against the wall. We had no other option other than to do what it took to succeed. This was the mindset that we have. The Power of Broke.
I know everyone has seen the "Rocky" movies but I want to specifically refer to "Rocky 3". When Rocky got his block knocked off by Klubber Lang at the beginning of the movie, he had lost something. The money and fame caused him to lose his hunger. His will and desire to win at all costs. You see, he wasn't broke any more. He wasn't hungry. He wasn't hurting for anything. He didn't have that fire deep down inside that burned because he had to win to survive. All of it was gone the minute he experienced the success of being a champion. Apollo Creed described it best. "You lost your edge...... You didn't look hungry. No, when we fought, you had the eye of the tiger man. The edge. And now you got to get it back. And the way to get it back is to go back to the beginning". He had to find that hunger again to get that edge back.
That is exactly what happened to my mind when I switched to a larger account. When I looked at over 200k buying power after being used to looking at 30k to 60k, I felt I had made it. I felt like I didn't need to be who I was, that I could be that guy that I always saw as a successful trader. Suddenly I didn't feel like my back was against the wall. I'm here to tell you it makes a difference. I needed that hunger to drive me. I needed that hunger to keep me moving forward. That's why the minute I switched back and I was back to square one, where I started, everything fell back in to place. I needed that lesson. I needed to understand how I worked and what I needed to be aware of as I progressed in this industry. I am very thankful that I had this lesson when I did. Now, when the opportunity presents itself again, I will be ready.
I feel that I have finally unlocked the secret of my success as a trader. The Power of Broke only works for you if you tap into it and put it to work. You don't have to be broke financially to use this power. The Power of Broke is a mindset. There is tremendous power in it. The more you need to succeed, the more likely it is that you will succeed. The more you've invested, not a financial investment but an emotional and personal investment, the more you will get back in return. This is the fuel that will power your passion. The fuel that keeps you driving forward when everything around you says quit. Tap into it. It is there for anyone that wants it.
So what have I learned. I need to keep the Power of Broke mindset throughout my career. It is what drives me. It is what drives my trading strategy. It doesn't matter how much I make or how much I keep in my trading account, I will always keep that hunger, that desire to grow, that desire to get better. I will have a goal every day. I will do my homework everyday. I will bring my passion to the market every day. I will remember I am "The Average Joe Trader". And I will always remember the ways of the shark. Even when a shark is sleeping, he is still swimming, still moving forward, still ready to attack when an opportunity presents itself. You see if a shark stops swimming, he will die. In order to succeed in this industry, you have to live the ways of the shark. You can find out more about the SHARK mindset here: "The Power of Broke", by Daymond John and download the shark points. I know this book is written more for entrepreneurs looking to start a business but if you think about it, as traders that's exactly what we are trying to do.
Building Dreams One Trade at a Time!
Sunday, February 21, 2016
Sunday, January 24, 2016
My Thoughts on Suretrader
When I decided to get into day trading I made sure I did my
research. How day trading worked, what
tools I would need, what the minimum investment I would need to get started, as
well as the tax and legal codes I would run in to. I am a big fan of the TV show American Greed,
and it showcased some of the most prolific violators of the SEC laws so I was
more concerned with those laws than most.
Upon reviewing them, I came across the Pattern Day Trader (PDT)
rule. I was crushed. How am I supposed to be able to make it when
I can’t day trade due to the fact that I had less than 25k to put in a
brokerage account? I began searching for
answers. At the time the only conclusion
I came to was to open multiple accounts, but with my limited funds, that wasn’t
feasible.
I don’t remember how but I came across Suretrader. As usual, I did my due diligence and found
some conflicting and concerning results. I knew from experience that you could not
trust everything that you read but I was very concerned about using an off
shore broker. There was something about
not being in closer contact with my money.
Maybe if they offered debit cards or something like that I would have
felt better but, at that point, I did not have any other choice so I decided to
open an account with them. This blog
will share my experiences that I have had with Suretrader from the beginning of
my time with them.
Let me first start by saying that I would not be here right
now without Suretrader. There is no way
I could have started day trading without them.
I am a true “Average Joe” blue collar American who had to work and
struggle for every penny I made so this decision was not made lightly. So thus begins my journey with Suretrader.
I had a pretty easy time opening an account with them. The application process was a little
different but once I had the application completed I received an email a few
days later saying that my account was ready to fund. The only extra form US citizens have to fill
out now is a W9 tax form. They asked for
professional references and bank references but they never contacted them.
I opened a bank account specifically for funding and
withdrawing from Suretrader, again just being careful because of the off shore
deal, and ordered a debit/credit card for that account. I funded my account using my credit card and
the money was available for trading the next business day. I have read many negative posts about people
having issues opening an account with Suretrader but I can honestly say that
everyone I personally know that opened an account did not have any issues
opening and funding their account. There
have been some changes in funding since I opened my account back in 2014 but
everything for the most part is the same.
Funding with a credit/debit card is the fastest, but it costs 3.5% for
it. The only way this fee adds up and
becomes a problem is if you constantly blow up your account and you have to
keep adding back. It’s free to fund via bank
wire transfer but it takes longer for the money to be credited to your account.
The only issue I had with withdrawing any money was the rule
they had that your first withdrawal had to be done by the same method you
funded with, and for no more money than what you originally funded with. After that there were no restrictions. To get your withdrawal through bank wire, you
will pay a $40 fee. You have to go
through a bank verification process that takes about a week to complete. Then there is another process to go through
on the i-boss platform. However, once
you have done it one time it will be a lot easier. I withdraw from my account every month using
bank wire and the process in pretty painless.
The money is in my account within a few days. Actually now the wires are cleared for US
clients through Citibank in New York so that makes the processing quicker for
us.
When I started I was budget minded so I opted to stick with
the Active Web platform. For day trading
that platform is a handicap. It’s only
as reliable as your internet connection and in the 2 years I have been with
them their server has been attacked numerous times. Not that your information or account are
compromised, but your ability to enter and exit trades would be. Also, if you lose money during these crashes,
Suretrader will not refund your money.
They have a risk disclaimer on their website that states that they are
not responsible for losses incurred due to trading malfunctions or system
disruptions. I highly recommend getting
the Suretrader Pro platform. I have not
experience any major problems with it.
All of my issues with the Pro platform have been due to my firewall. I have the Suretrader Pro platform, $49,
Market Depth Data Access $40, Regional Quotes (Basic Level 2) $15, and NASDAQ
Total View (Book Depth) $20 for a total of $124 per month. It is well worth the subscription costs.
Their customer service is good but it can get bad during
crisis times for two reasons. They do
not have a lot of customer service reps and most of their client base are made
up of new traders who do not have a clue what they are doing. You can’t imagine how many people open up
trading accounts who do not even know how to enter a buy or sell order. The chat lines and phone lines are jammed all
day with questions that are similar to that with things traders should learn
through taking courses and paper trading prior to opening an account. So I really don't bash them about their slow
customer service. When these traders lose money, of course they blame
Suretrader. They never blame the
shortcuts they took or the education they didn’t receive prior to trying to
trade live. Is Suretrader completely
innocent? Of course not. If you are not careful and keep up with your
account, you can “accidently” get double charged for commissions or platform
fees. It won’t happen to you often but
it does. They will refund it
though. You just have to stay on top of
that.
Here’s the deal; Suretrader is a necessary evil if you have
less than 25k to open a trading account with.
90% of their clients are brand
new traders so they are a lot more at risk to lose their money in addition to
money they don't have so Suretrader treats us like a high risk client the same
way a bank would treat a high risk customer that doesn't have a good credit
record. Therefore they have a few more
fees and rules than most.
So what advice do I have to those who want to open accounts
with Suretrader? Well first, invest in
your education. Without it you are a
mark and they will take every dime you send them. The plan I recommend is laid out here: http://www.warriortrading.com/getting-started/
Never open any brokerage account and start trading without the proper
education. Make sure you read all of the
rules and understand all of the fee schedules.
They are not outrageous. You just have to make sure you understand how
to not make a mistake and incur these additional fees. Open up a bank account specifically for
funding and withdrawing from Suretrader.
Do not keep any more money than absolutely necessary in there. This should give you peace of mind as it
relates to your protecting your other money.
Do not over trade. Over trading
leads to increased fees and exposed risk in the market. Get the Pro platform. This will save you a lot of headaches and
greatly reduce your risk of losing money due to execution issues. Just because you can open an account with
$500 and day trade doesn’t mean you need to trade. I would not recommend trading with less than
$2500. I know I started with $1500 but I
believe I was lucky to catch some major short squeezes when my account was very
low. Make sure you understand margin and
how to use it correctly. Margin can
destroy an inexperienced trader before he even gets started good.
SureTrader is actually one of the leading
online brokers for day trading. With a multitude of features, advantages, and
benefits, you should definitely giving them a shot. Just make sure you know
their trading rules and regulations thoroughly.
They have good, but sometimes slow customer service but will answer any
of your questions or concerns. If you’re under 25k and looking for a solid
broker to day trade with, SureTrader has everything you need, so it’s worth
checking them out!
Tuesday, September 22, 2015
How I Overcame my Fear of Taking Trades
A fellow trader asked me to do a blog about how I overcame my fear to take trades. I have to admit that it was a long process for me to truly overcome my fear of trading. Once I realized that it is natural to feel the way I do because to be a successful trader you have to react contrary to human nature. This caused me to go out and try to understand what is happening in my brain so that I could figure out how to retrain my way of thinking.
The reason why I believed that I could retrain my brain is because when I was in college I was diagnosed with dyslexia. I had been able to mask the problem up until that point because I learned how to adapt to my disability and function in school just like an average student. My teachers nor my parents ever knew. Then when I started college I had a professor who wanted us to write in pen because she wanted to see our corrections. That wouldn't have been a problem if we did it out of class but we had to write essays in class. So I tried to adapt again and buy erasable ink pens. My professor knew that trick. Needless to say she once she saw all the corrections I had to make she knew I had a problem and referred me to be tested.
What I Learned
Once I began getting help with my dyslexia I began to gain confidence in myself and I was able to take more chances and risks as it related to my scholastic career. All this was made possible because they helped me reprogram my brain as to how it processed the information I was taking in and the information that was coming out of it. So once I made the connection with the fear I had in trading and whether or not I was seeing the patterns or the setups correctly with the same fear I had with my schoolwork, I knew I needed to do some research on the psychological aspect of trading.
So in my research I found something called Neurofinance. This studies the relationship between the brain and money. Studies have shown that trading activates the same primitive centers in the brain that are responsible for self-preservation. These are the primal emotional and defensive layers of the brain that do not respond very well to will power (self talk). In fact, the brain is hardwired to prevent you from turning off its primal circuits, its core defensive and reactive processes.
Why? These processes, such as fight, flight and pursuit have great survival value. When these primal parts of the brain are in control of your trading you are most likely to automatically do the opposite of what you consciously intend. It may feel like self-sabotage, but it is not diabolical… it is biological. It is just your self-preservation instincts taking control. It is difficult to manage an instinct, which is one reason why so many traders under-perform and eventually fail.
Normal human instinctual fear, which may be worsened by your genetic makeup, will interfere with trading success because it will make you more reactive to the randomness in the market. Winning traders are either not afraid or carefully manage their fear.
Most traders who trade scared are also trading scarred. Normal losing trades and periods of drawdown are processed normally, as expectable--if somewhat disappointing--events. When losses are substantial, however, they can be processed as traumatic events. Instead of being processed through normal, explicit, verbal channels, they activate the flight/fight emergency mechanisms of mind and body, leaving their emotional imprint. Later, events similar to the traumatic losses--even normal ones--can trigger the emotional and physical reactions of emergency, including paralyzing anxiety.
Once trading becomes associated with painful experiences, traders come to expect losses and betrayal by the market. Because risk cannot be eliminated from trading, the inability to tolerate risk works against you. It makes you late in pulling the trigger (waiting for confirmation) or makes it impossible to stay in a good trade and let winners run.
To trade successfully, you need to reduce fear to a level where it is healthy, i.e. you respect the reality of risk, but your judgment and behavior are not impaired by fear. To eliminate self-sabotage, you have to reduce your fear to manageable levels. You can’t trade well with a scared brain.
How I Overcame my Fear to Take Trades
Once I realized the problem I had to think of ways to train my brain to have a trader's mentality. The first obstacle I faced was the confidence in my ability to identify a setup, plan, and execute a successful trade. My confidence was shot because of what I explained a little earlier. My emotions kept associating the painful experiences when I wanted to enter a trade. I had suffered some losses and had lost over 1/2 of my account. I started believing that I really didn't know what I was doing, which I didn't. So my first step was to become educated. I picked 1 strategy to learn, which was the ABCD long setup that Nate teaches in his DVD. I learned and I practiced using the On-Demand feature on the TOS platform. I practiced making a trading plan by establishing entry and exits and using position sizing to establish the correct risk/reward. Once my education was complete I was ready to move on to the next step.
I then had to convince myself that losing was OK. That taking losses occasionally was part of the business and there was no way around it. It was even more difficult convincing myself because my account was so small. A few small losses and I would have been done. This is the 2nd largest reason most new traders fail or quit. The ones that are smart enough to get the education often only have a little money left to fund an account so mentally it is very difficult to accept losses. Human nature makes you want to protect the little capital you have
I had to look at it this way. I give myself about $150 a week for gas, food, and personal incidentals. I would play the lottery every week spending $100 to $150 a week. I figured that If I'm willing to throw that money away for a million to 1 chance of making any decent money and I was OK with it, then I should be OK risking $50 in a trade to make $100 on something that I have a better than average of coming out a winner. In the lottery I had no control over whether I won or not outside of picking the numbers or the scratch-off and buying the tickets. On a trade I had a lot more control over the entry and the outcome of the trade. The lottery was a gamble, the trade was an investment.
With that I didn't have much trouble entering trades but then another problem surfaced. When I was in the trade I was a nervous wreck. I would consistently take the trade off as soon as I made over $25 if the price action slowed down. I didn't use the exit strategy I had. I found myself watching my P&L. If I was up $40 or $50 and I saw my unrealized gains dropping I immediately sold. I began to hide my P&L and traded the chart and tried to stick to my plan. Some I did well and some I still got scared when I saw too many red candles print and I took it off early. What helped me get better with letting my trades work was studying the charts of my trades every night and seeing how my plan worked but I didn't trade it correctly. I guess the only good thing that happened during this time was that I was sticking to my stops and not letting losing trades get out of hand.
This is how I programmed my mind to become a trader.
1. I got educated. Even being an educator I sometimes forget the value of education and how important it is to have someone help you organize the information so that it makes sense.
2. I learned and became proficient with 1 setup at a time. This helped my confidence as well.
3. Practice trading. I admit I practiced with my money more than I should have at first but once I learned how to use the on-demand feature on TOS I began practicing trades at nights and on weekends. The more I practiced the more entering and letting trades work become automatic
4. I used small position sizing at first to reduce the effect of my emotions. I was more inclined to let a 100 share position size have the room it needed to work. I was able to stick to my plan and let my winners run. I had to in order to make $ with a 100 share position!
5. I hid my unrealized gains so that I couldn't see whether I was up or down on a trade. This also helped to keep my emotions in check and focus on the trade.
6. I never traded alone. I needed to be a part of a community that trades my setups because when I was new, and even today, I need support throughout the trading day. I could always ask a question to a moderator in chat when I felt lost.
7. I found a mentor to give me in depth individualized instruction and feedback. Again I wanted someone who trades the same setups and has the same trading ideology that I have
8. I stopped watching my TweetDeck and chat trying to catch every move. Just because there are people on Twitter and in chat calling out trades all day doesn't mean I'm not looking at the right stocks. I just stuck to my scans and my setup. Besides, 60% of whats called out is BS anyway.
Once you have your education out the way, the key is staying small until you are ready. There is no shame in making $50 a day to start with on 100 share positions when you are trading the entire move. Slowly increase your share size and risk making sure you are completely comfortable at every step letting the trade work. That is what I did. Stick to your stops. 1 missed stop can destroy months of hard work. Remember, no one is perfect. You will make mistakes. I make mistakes. But if you stay disciplined and trade within yourself, you will make it. You will minimize the effects of your mistakes. Work with a proven guru and community. One that fits your style of trading. Everyone knows I have found mine and how it has improved my trading. I know now what they mean by "this is a marathon, not a sprint".
I hope this helps and that this is what those who asked me about this wanted. As always just shoot me an email if you want to.
The reason why I believed that I could retrain my brain is because when I was in college I was diagnosed with dyslexia. I had been able to mask the problem up until that point because I learned how to adapt to my disability and function in school just like an average student. My teachers nor my parents ever knew. Then when I started college I had a professor who wanted us to write in pen because she wanted to see our corrections. That wouldn't have been a problem if we did it out of class but we had to write essays in class. So I tried to adapt again and buy erasable ink pens. My professor knew that trick. Needless to say she once she saw all the corrections I had to make she knew I had a problem and referred me to be tested.
What I Learned
Once I began getting help with my dyslexia I began to gain confidence in myself and I was able to take more chances and risks as it related to my scholastic career. All this was made possible because they helped me reprogram my brain as to how it processed the information I was taking in and the information that was coming out of it. So once I made the connection with the fear I had in trading and whether or not I was seeing the patterns or the setups correctly with the same fear I had with my schoolwork, I knew I needed to do some research on the psychological aspect of trading.
So in my research I found something called Neurofinance. This studies the relationship between the brain and money. Studies have shown that trading activates the same primitive centers in the brain that are responsible for self-preservation. These are the primal emotional and defensive layers of the brain that do not respond very well to will power (self talk). In fact, the brain is hardwired to prevent you from turning off its primal circuits, its core defensive and reactive processes.
Why? These processes, such as fight, flight and pursuit have great survival value. When these primal parts of the brain are in control of your trading you are most likely to automatically do the opposite of what you consciously intend. It may feel like self-sabotage, but it is not diabolical… it is biological. It is just your self-preservation instincts taking control. It is difficult to manage an instinct, which is one reason why so many traders under-perform and eventually fail.
Normal human instinctual fear, which may be worsened by your genetic makeup, will interfere with trading success because it will make you more reactive to the randomness in the market. Winning traders are either not afraid or carefully manage their fear.
Most traders who trade scared are also trading scarred. Normal losing trades and periods of drawdown are processed normally, as expectable--if somewhat disappointing--events. When losses are substantial, however, they can be processed as traumatic events. Instead of being processed through normal, explicit, verbal channels, they activate the flight/fight emergency mechanisms of mind and body, leaving their emotional imprint. Later, events similar to the traumatic losses--even normal ones--can trigger the emotional and physical reactions of emergency, including paralyzing anxiety.
Once trading becomes associated with painful experiences, traders come to expect losses and betrayal by the market. Because risk cannot be eliminated from trading, the inability to tolerate risk works against you. It makes you late in pulling the trigger (waiting for confirmation) or makes it impossible to stay in a good trade and let winners run.
To trade successfully, you need to reduce fear to a level where it is healthy, i.e. you respect the reality of risk, but your judgment and behavior are not impaired by fear. To eliminate self-sabotage, you have to reduce your fear to manageable levels. You can’t trade well with a scared brain.
How I Overcame my Fear to Take Trades
Once I realized the problem I had to think of ways to train my brain to have a trader's mentality. The first obstacle I faced was the confidence in my ability to identify a setup, plan, and execute a successful trade. My confidence was shot because of what I explained a little earlier. My emotions kept associating the painful experiences when I wanted to enter a trade. I had suffered some losses and had lost over 1/2 of my account. I started believing that I really didn't know what I was doing, which I didn't. So my first step was to become educated. I picked 1 strategy to learn, which was the ABCD long setup that Nate teaches in his DVD. I learned and I practiced using the On-Demand feature on the TOS platform. I practiced making a trading plan by establishing entry and exits and using position sizing to establish the correct risk/reward. Once my education was complete I was ready to move on to the next step.
I then had to convince myself that losing was OK. That taking losses occasionally was part of the business and there was no way around it. It was even more difficult convincing myself because my account was so small. A few small losses and I would have been done. This is the 2nd largest reason most new traders fail or quit. The ones that are smart enough to get the education often only have a little money left to fund an account so mentally it is very difficult to accept losses. Human nature makes you want to protect the little capital you have
I had to look at it this way. I give myself about $150 a week for gas, food, and personal incidentals. I would play the lottery every week spending $100 to $150 a week. I figured that If I'm willing to throw that money away for a million to 1 chance of making any decent money and I was OK with it, then I should be OK risking $50 in a trade to make $100 on something that I have a better than average of coming out a winner. In the lottery I had no control over whether I won or not outside of picking the numbers or the scratch-off and buying the tickets. On a trade I had a lot more control over the entry and the outcome of the trade. The lottery was a gamble, the trade was an investment.
With that I didn't have much trouble entering trades but then another problem surfaced. When I was in the trade I was a nervous wreck. I would consistently take the trade off as soon as I made over $25 if the price action slowed down. I didn't use the exit strategy I had. I found myself watching my P&L. If I was up $40 or $50 and I saw my unrealized gains dropping I immediately sold. I began to hide my P&L and traded the chart and tried to stick to my plan. Some I did well and some I still got scared when I saw too many red candles print and I took it off early. What helped me get better with letting my trades work was studying the charts of my trades every night and seeing how my plan worked but I didn't trade it correctly. I guess the only good thing that happened during this time was that I was sticking to my stops and not letting losing trades get out of hand.
This is how I programmed my mind to become a trader.
1. I got educated. Even being an educator I sometimes forget the value of education and how important it is to have someone help you organize the information so that it makes sense.
2. I learned and became proficient with 1 setup at a time. This helped my confidence as well.
3. Practice trading. I admit I practiced with my money more than I should have at first but once I learned how to use the on-demand feature on TOS I began practicing trades at nights and on weekends. The more I practiced the more entering and letting trades work become automatic
4. I used small position sizing at first to reduce the effect of my emotions. I was more inclined to let a 100 share position size have the room it needed to work. I was able to stick to my plan and let my winners run. I had to in order to make $ with a 100 share position!
5. I hid my unrealized gains so that I couldn't see whether I was up or down on a trade. This also helped to keep my emotions in check and focus on the trade.
6. I never traded alone. I needed to be a part of a community that trades my setups because when I was new, and even today, I need support throughout the trading day. I could always ask a question to a moderator in chat when I felt lost.
7. I found a mentor to give me in depth individualized instruction and feedback. Again I wanted someone who trades the same setups and has the same trading ideology that I have
8. I stopped watching my TweetDeck and chat trying to catch every move. Just because there are people on Twitter and in chat calling out trades all day doesn't mean I'm not looking at the right stocks. I just stuck to my scans and my setup. Besides, 60% of whats called out is BS anyway.
Once you have your education out the way, the key is staying small until you are ready. There is no shame in making $50 a day to start with on 100 share positions when you are trading the entire move. Slowly increase your share size and risk making sure you are completely comfortable at every step letting the trade work. That is what I did. Stick to your stops. 1 missed stop can destroy months of hard work. Remember, no one is perfect. You will make mistakes. I make mistakes. But if you stay disciplined and trade within yourself, you will make it. You will minimize the effects of your mistakes. Work with a proven guru and community. One that fits your style of trading. Everyone knows I have found mine and how it has improved my trading. I know now what they mean by "this is a marathon, not a sprint".
I hope this helps and that this is what those who asked me about this wanted. As always just shoot me an email if you want to.
Friday, September 18, 2015
Which Statistic Do You Want to Be: 90 or 10?
I know this may be a blog that you may not want to read. Maybe by now you are in "education overload" because everyone and their mother is stressing and offering education. I also know that you are tired of hearing that 90% of all people that try day trading fail. I have been hearing that for years as well and I am sick of it too. But I sat back and thought about it this week because our state is in the process of changing the way we evaluate teachers. Now, teachers will be evaluated on the success of their students. I wondered why in the last 5 years there hasn't been an improvement in the 90% failure rate of day traders. We have seen a boom in the last few years in gurus offering "education packages" to help you get started in the right way. And still, we are stuck with the 90% rule. So why can't we get past this. As a professional educator complete with advanced degrees, I can say without a shadow of a doubt that most of the education being offered by these gurus to aspiring day traders is missing the mark.
The largest fatal mistake an aspiring day trader makes has to deal with education. Some believe that they can watch a few free videos and webinars and then they are ready to attack the market. Then you have some that choose a guru and education package that is based on glitz and glamour and the promise of money and freedom that do not produce. Or you have those proud individuals who believe they know what to do and that they do not need anyone to tell them how to trade because it's simply buy low and sell high. How hard is that? But those individuals that really drives me crazy are the ones who are too lazy to want to learn and just wants to pay a guru to provide them with alerts. Since I have started my journey into trading several years ago, I have associated with many aspiring traders and I can count on 1 hand those who are still trading with me.
Here is what I know; education is the key to success in day trading. You cannot expect to master a skill if you skip through a curriculum and not fully educate yourself. This profession requires lifelong learning. Above all of that, you must choose the right educational package and guru. You must make sure that you take it serious and not take any shortcuts. While most gurus and their educational packages out there are horrible and just want your money, there are good people that truly want to help. The hard part as a person brand new to this industry is to know how to navigate though the sea of gurus. I am writing this blog to help those who may be lost at sea in this to find their way home.
Education, experience and knowledge are 3 of the most important factors when it comes to beginning your trading career. You do not need to try and save money on education by ignoring it's importance. This is why you need to invest in your education and knowledge. I would recommend finding a coach or mentor to help you get through this period. Someone who is not trying to sell their own trading education packages but someone who knows and understand what you are going through during this time. I feel that this is the most important time in a new traders career dealing with expectations and emotions.
The next step is to research professional traders and get to know their style of teaching and trading before you purchase any education package. The best traders will have free lessons posted on YouTube or their Web page so that you will be able to "test drive" their style. You want to find someone that actually trades everyday and that trading is their primary source of income. Also you want to find a community with several professional traders with complementing styles. This will give you a good chance for a well rounded education.
I have found a community with excellent and complete trading education packages that are written by traders who actually trade everyday. In fact, I can see their trades, scans, and charts on my screen in real time as I trade throughout the day. I would rather learn from successful trading educators who are willing to apply their knowledge, strategies and education with their own capital rather than just talk about it. The community I have found is Warrior Trading. Ross, Mike, and Jeff are trading and teaching real time throughout the trading day. Unfortunately I found them too late to take advantage of the packages with the simulator. The content is second to none and I have experienced all three of them teaching so I can say beyond a shadow of a doubt they are the real deal. They have occasional free chat days and you can find some great videos on Ross's YouTube channel.
At the time I wrote this I was a subscriber/member of the WT community and not a paid affiliate so my thoughts and feelings were genuine and based on my own personal experiences. I am now a moderator in the chat room and one of the Warrior Pro instructors and my feelings has even grown stronger because I have input in the education we provide.
The Warrior Pro Bundle includes 3 live small group mentor sessions a week. You will hear from Ross, Mike, and myself in these sessions. This is invaluable because we will be trading and teaching the same setups that you just learned about. We can help you analyze your trades and walk you through what you did right and what you did wrong. You will have more confidence when you know you have trading mentors behind you as well as with you all day in chat. Getting a mentor was the smartest thing I have done to date in my trading career. I trade less, get bigger moves, and make more money now. I have to thank Mike for mentoring me and for helping me become a better trader. Remember, to be successful in trading you must be willing to learn throughout your career. Even the gurus have a mentor that helped them get to where they are and stay on their game.
I really feel the biggest reason traders fail is because they do no get the proper education from the beginning. Every new trader I meet and get to talk to I try and get them to understand that getting the right education is priority one. If you have 2k and want to start trading look at investing in your education first and start saving up again because if you take a short cut you will be saving up again to pay for your education. I don't care what anyone says you do not learn how to trade by blowing up your account. The only thing you learn by blowing up your account is that you need to get educated before you trade again. People that say that and say they are just paying tuition to the market to learn are just trying to make themselves feel better about the money they lost. I know because I used to be that person.
Take it from me. Education is the key to your sustained success in trading. Period.
The largest fatal mistake an aspiring day trader makes has to deal with education. Some believe that they can watch a few free videos and webinars and then they are ready to attack the market. Then you have some that choose a guru and education package that is based on glitz and glamour and the promise of money and freedom that do not produce. Or you have those proud individuals who believe they know what to do and that they do not need anyone to tell them how to trade because it's simply buy low and sell high. How hard is that? But those individuals that really drives me crazy are the ones who are too lazy to want to learn and just wants to pay a guru to provide them with alerts. Since I have started my journey into trading several years ago, I have associated with many aspiring traders and I can count on 1 hand those who are still trading with me.
Here is what I know; education is the key to success in day trading. You cannot expect to master a skill if you skip through a curriculum and not fully educate yourself. This profession requires lifelong learning. Above all of that, you must choose the right educational package and guru. You must make sure that you take it serious and not take any shortcuts. While most gurus and their educational packages out there are horrible and just want your money, there are good people that truly want to help. The hard part as a person brand new to this industry is to know how to navigate though the sea of gurus. I am writing this blog to help those who may be lost at sea in this to find their way home.
Education, experience and knowledge are 3 of the most important factors when it comes to beginning your trading career. You do not need to try and save money on education by ignoring it's importance. This is why you need to invest in your education and knowledge. I would recommend finding a coach or mentor to help you get through this period. Someone who is not trying to sell their own trading education packages but someone who knows and understand what you are going through during this time. I feel that this is the most important time in a new traders career dealing with expectations and emotions.
The next step is to research professional traders and get to know their style of teaching and trading before you purchase any education package. The best traders will have free lessons posted on YouTube or their Web page so that you will be able to "test drive" their style. You want to find someone that actually trades everyday and that trading is their primary source of income. Also you want to find a community with several professional traders with complementing styles. This will give you a good chance for a well rounded education.
I have found a community with excellent and complete trading education packages that are written by traders who actually trade everyday. In fact, I can see their trades, scans, and charts on my screen in real time as I trade throughout the day. I would rather learn from successful trading educators who are willing to apply their knowledge, strategies and education with their own capital rather than just talk about it. The community I have found is Warrior Trading. Ross, Mike, and Jeff are trading and teaching real time throughout the trading day. Unfortunately I found them too late to take advantage of the packages with the simulator. The content is second to none and I have experienced all three of them teaching so I can say beyond a shadow of a doubt they are the real deal. They have occasional free chat days and you can find some great videos on Ross's YouTube channel.
At the time I wrote this I was a subscriber/member of the WT community and not a paid affiliate so my thoughts and feelings were genuine and based on my own personal experiences. I am now a moderator in the chat room and one of the Warrior Pro instructors and my feelings has even grown stronger because I have input in the education we provide.
The Warrior Pro Bundle includes 3 live small group mentor sessions a week. You will hear from Ross, Mike, and myself in these sessions. This is invaluable because we will be trading and teaching the same setups that you just learned about. We can help you analyze your trades and walk you through what you did right and what you did wrong. You will have more confidence when you know you have trading mentors behind you as well as with you all day in chat. Getting a mentor was the smartest thing I have done to date in my trading career. I trade less, get bigger moves, and make more money now. I have to thank Mike for mentoring me and for helping me become a better trader. Remember, to be successful in trading you must be willing to learn throughout your career. Even the gurus have a mentor that helped them get to where they are and stay on their game.
I really feel the biggest reason traders fail is because they do no get the proper education from the beginning. Every new trader I meet and get to talk to I try and get them to understand that getting the right education is priority one. If you have 2k and want to start trading look at investing in your education first and start saving up again because if you take a short cut you will be saving up again to pay for your education. I don't care what anyone says you do not learn how to trade by blowing up your account. The only thing you learn by blowing up your account is that you need to get educated before you trade again. People that say that and say they are just paying tuition to the market to learn are just trying to make themselves feel better about the money they lost. I know because I used to be that person.
Take it from me. Education is the key to your sustained success in trading. Period.
Saturday, September 12, 2015
What I Learned This Summer
Now that the summer has pretty much come to an end, I feel that it is time for me to reflect on the things I learned this summer. I started out the summer full of excitement and enthusiasm and I truly believed I was ready to trade full time and make a living at it. However, the very first lesson I learned was that you cannot have these types of emotions in trading. They prevent you from making sound decisions when trading. The first thing I had to do was to get my emotions in check so that I could approach this with my eyes wide open. Once my eyes were open, I saw just how much I didn't know and how unprepared I was to do this full time. You see, being consistently profitable for 6 months is just part of the equation. It is an important part, but understanding how to adapt to the changing markets and managing emotions on a daily basis were skills I lacked and it showed because the day I went live was the beginning of the summer lull in the markets. Now I see that it was the best thing that could have ever happened to me. Some people say blowing up a couple of accounts are the best thing but for me,this summer was it.
The next emotion I had to deal with was disappointment. I fully expected to make twice as much as I was making before since I could give trading my full attention. When things started out slow I started forcing trades and really got frustrated. Once I slowed down and began to define myself as a trader and establish my go-to setups I began to settle in and start trading without emotion. I had to learn to react the same toward a $50 loss as I did toward a $500 gain. I had to approach each trade the same with the same focus and discipline regardless of the results of my previous trade. I think a lot of inexperienced traders never get out of this cycle. I also watched a lot of Clay Trader's videos and they were a big help as well. His motto is "Trade Without Emotion".
I also realized that I needed a true mentor. Even the very successful gurus still have mentors that they talk to and work with every day. Having a mentor really gave me more insight in my trades and kept me focused on the important aspects of my setups and strategies. I learned the true importance of support and resistance levels and how to trade off of them. I also learned how to use the moving averages for my intraday trades. Both helped me be more selective in my trades. There is always something new to learn about my setups and how to trade them in different market conditions. It also helps that my mentor is in Warrior Trading chat everyday teaching. It has made a tremendous difference in my trading.
I was also introduced to another "guru" that had a similar trading setup to what I trade. Kunal from Bulls on Wall Street produced several free webinars, one being 4 days long. His chat seems to be set up similar to Ross's but it is on steroids. He is smart and is all in when it comes to trading and education. I didn't try his chat because I feel the DTW community fits my personality better but I always catch his webinars and videos he posts on YouTube. I learned how to identify and the importance of the daily levels from my mentor Mike in DTW, I learned how to enter early and trade off of support or resistance versus waiting for confirmation candlestick patterns from Kunal's teachings.
I tried my hand at making video journals of my trades and I have shared a few on YouTube. Talking through my trades seems to help me analyze them a little better. It seems like after a few weeks I forget small details from key trades but with the video and the chart it will keep it fresh in my mind. It's also a better way for me to share what I am doing with others and get good feedback on my trades. All of this helps me continue to improve and grow as a trader.
I didn't intend on going back to work but I received an offer that I just couldn't refuse. I can still trade in the morning but just not at home. I only use a laptop and an extra monitor and it helps me focus on only the best setups. Since I went on vacation a month ago I have not used my trading station. I have only used my traveling setup and my trading has been more focused. I think I will stick to this until I get more solid in my trading. I think I went too big too soon. If I can make good money with this setup, I will continue to trade with my laptop and extra screen.
I guess everything that I learned this summer can be summed up in one word; education. It doesn't matter how much capital you have, what tools you have, or what market you trade. Without education, you will not succeed. Period. But, there is so much information out there you have to know how to use it and put it together where it makes sense. That's where choosing the right community to become a part of and having a true mentor comes in to play.
I feel I have turned the corner and I'm ready to start another chapter in my trading life. I've even toyed with the idea of starting a trading coaching service for brand new "average joe" traders like me who are wanting to get started in trading but are overwhelmed with all that is out there. But, I will continue learning and growing as a trader because this is what I want to do the rest of my life.
Profit.ly Stats for the Summer All Trades Long Short
The next emotion I had to deal with was disappointment. I fully expected to make twice as much as I was making before since I could give trading my full attention. When things started out slow I started forcing trades and really got frustrated. Once I slowed down and began to define myself as a trader and establish my go-to setups I began to settle in and start trading without emotion. I had to learn to react the same toward a $50 loss as I did toward a $500 gain. I had to approach each trade the same with the same focus and discipline regardless of the results of my previous trade. I think a lot of inexperienced traders never get out of this cycle. I also watched a lot of Clay Trader's videos and they were a big help as well. His motto is "Trade Without Emotion".
I also realized that I needed a true mentor. Even the very successful gurus still have mentors that they talk to and work with every day. Having a mentor really gave me more insight in my trades and kept me focused on the important aspects of my setups and strategies. I learned the true importance of support and resistance levels and how to trade off of them. I also learned how to use the moving averages for my intraday trades. Both helped me be more selective in my trades. There is always something new to learn about my setups and how to trade them in different market conditions. It also helps that my mentor is in Warrior Trading chat everyday teaching. It has made a tremendous difference in my trading.
I was also introduced to another "guru" that had a similar trading setup to what I trade. Kunal from Bulls on Wall Street produced several free webinars, one being 4 days long. His chat seems to be set up similar to Ross's but it is on steroids. He is smart and is all in when it comes to trading and education. I didn't try his chat because I feel the DTW community fits my personality better but I always catch his webinars and videos he posts on YouTube. I learned how to identify and the importance of the daily levels from my mentor Mike in DTW, I learned how to enter early and trade off of support or resistance versus waiting for confirmation candlestick patterns from Kunal's teachings.
I tried my hand at making video journals of my trades and I have shared a few on YouTube. Talking through my trades seems to help me analyze them a little better. It seems like after a few weeks I forget small details from key trades but with the video and the chart it will keep it fresh in my mind. It's also a better way for me to share what I am doing with others and get good feedback on my trades. All of this helps me continue to improve and grow as a trader.
I didn't intend on going back to work but I received an offer that I just couldn't refuse. I can still trade in the morning but just not at home. I only use a laptop and an extra monitor and it helps me focus on only the best setups. Since I went on vacation a month ago I have not used my trading station. I have only used my traveling setup and my trading has been more focused. I think I will stick to this until I get more solid in my trading. I think I went too big too soon. If I can make good money with this setup, I will continue to trade with my laptop and extra screen.
I guess everything that I learned this summer can be summed up in one word; education. It doesn't matter how much capital you have, what tools you have, or what market you trade. Without education, you will not succeed. Period. But, there is so much information out there you have to know how to use it and put it together where it makes sense. That's where choosing the right community to become a part of and having a true mentor comes in to play.
I feel I have turned the corner and I'm ready to start another chapter in my trading life. I've even toyed with the idea of starting a trading coaching service for brand new "average joe" traders like me who are wanting to get started in trading but are overwhelmed with all that is out there. But, I will continue learning and growing as a trader because this is what I want to do the rest of my life.
Profit.ly Stats for the Summer All Trades Long Short
| Total Net Profit | $27k | $20k | $6,659.49 |
| Gross Profit | $29k | $21k | $7,109.76 |
| Gross Loss | $1,809.72 | $1,359.45 | $450.27 |
| Profit Factor | 15.8 | 15.8 | 15.79 |
| Total Trades | 146 | 110 | 36 |
| Percent Profitable | 79.45% | 80% | 77.78% |
| Winning Trades | 116 | 88 | 28 |
| Losing Trades | 30 | 22 | 8 |
| Avg Trade Net Profit | $183.40 | $182.88 | $184.99 |
| Avg Winning Trade | $246.43 | $244.05 | $253.92 |
| Avg % Gain | 3.54% | 3.49% | 3.7% |
| Avg Losing Trade | $60.32 | $61.79 | $56.28 |
| Avg % Loss | 0.86% | 0.95% | 0.6% |
| Ratio Avg Win to Avg Loss | 4.09 | 3.95 | 4.51 |
| Largest Winning Trade | $2,512.00 | $2,512.00 | $1,362.00 |
| Largest Losing Trade | $196.21 | $196.21 | $119.00 |
| Largest Winner as % Gross Profit | 8.79% | 11.7% | 19.16% |
| Largest Loser as % Gross Loss | 10.84% | 14.43% | 26.43% |
| Max Consec Winning Trades | 13 | 13 | 11 |
| Max Consec Losing Trades | 4 | 3 | 3 |
Sunday, June 14, 2015
My Trading Station/Updated
I have been asked a few questions about how I have my station set up because it is a little different than most traders. Everything is powered by laptops. I think I did a post several months back on my set up at the time but I have substantially upgraded. I started with 2 laptops, then 1 laptop and 3 small monitors, then to 1 laptop and 2 larger monitors, then 2 laptops and 2 large monitors, then to what I have now; 1 laptop powering 5 large monitors for charting and platform and 1 laptop and 3 monitors for chat and social media. I found it easier to be able to watch all of the tickers on my watchlist on individual monitors versus continuously switching screens back in forth to monitor them. As you have read, I have tried different configurations to try and find my comfort zone. I am happy with what I have finally come up with.
So to answer the main question I get; why a laptop? Simply, I want portability. I like to change scenery. Sometimes I like looking out of the front window, sometimes out the back, and sometimes I like sitting on my front porch. I even like to roll my desk out on the patio on a pretty day. I wanted to be able to trade anywhere. So I started out finding a desk that was light, sturdy, and had wheels.
A lot of people have said that I shouldn't use a laptop for a trading station and that I need more power. Now I'm not a computer wizard or a professional anything with computers, but I'm an engineer and I believe that I can understand information and data and make a well educated decision on just about anything technical. I also like to simply everything and look at it as if I were a child so that's is what I did in this case. The reality I came to is this, the trading platforms and charting software don't need anywhere near the power that these PC gaming systems need, but a lot of people seem to connect the two and say you need these high power trading computers to be successful. In a way I set out to prove them wrong, but in the end I just wanted something that I liked and felt comfortable using.
The first thing I ran in to was that a laptop video card is limited, so hooking more than 1 or 2 monitors to the laptop video card can overwork/overheat it which will eventually lead to premature failure. However, most laptops today have at least one USB 3.0 port, which can transfer up to 4800 Mbps or 4.8 Gbps. Contrary to popular belief, they work great for extra monitors. All you will need is a USB 3.0 to VGA or HDMI adapter. These work as "mini" graphics cards. The VGA works pretty good but if you have HD monitors the HDMI adapter allows you to take advantage of the HD capabilities. It is recommended that you hook only 2 monitors up per USB port, but I found that if you get a self powered USB 3.0 hub you can hook up to 6 monitors up to a single 3.0 port on your laptop without losing any data transfer speed to the monitors.
I experienced no lag or video issues with any of the trading platforms I use. My laptop does not get hot and it runs all day. I would't recommend this setup if you are trying to set up a PC gaming system. I didn't design it or research it for that.
Now lets look at my laptop specs. I have 2 Asus - 2-in-1 15.6" 4K UHD Touch-Screen Laptop - Intel Core i7 - 16GB Memory - NVIDIA GeForce GTX 950M - 2TB HDD + 512GB SSD. I found that for live streaming and video recording that a SSD drive is needed.
Like I said earlier, I needed at least a 7 port, 3.0 USB hub. It needed to be self powered because I didn't want it to rob power from the computer. Then I needed 3.0 USB to VGA or HDMI monitors. I started using all VGA adapters because I started out with traditional flat VGA monitors. I did not have any problems when I used that setup but i figure if I have HD capability now why not use it. I use the j5 create brand but I believe this will be a personal preference. Because my charts works so well with these 2.0 VGA adapters initially that further proved to me that I didn't need a $2500 trading or gaming computer to be successful at trading.
I have 3, ASUS VS247H-P Black 23.6" 2ms LED Backlight Widescreen LCD Monitors that I use to chart the tickers I am watching, (6 max) and an ASUS VE278Q - 27" Widescreen Flat-Panel LED-LCD HD Monitor - Black on top that I run my scans from. Since I have started the chat community, I have added 2 Asus VE228H 21.5" Full HD HDMI LED BackLight LCD Monitors. One is powered by the laptop from my main trading station and the other from my social media and chat designated station. I had to use the 21.5 monitors because of the oversized 27" monitor I am using on the top.
This is the monitor stand that I use
This is the two that I added to each arm to support the new monitors
My social media laptop and monitors are on a separate lap top roll cart that I modified to hold 2 extra monitors. The third monitor is part of my main trading station and I will use that for when I have the Morning Show or Sneak Peek Wednesday in the other room. The specs for this computer were given earlier and these are 3 more 21.5" widescreen monitors that I hook up using USB to VGA adapters. (2 monitors on my cart and the other one on my main trading station. Didn't see the need for the added expense of getting the HDMI adapters and cables. Nothing special about it. It has my secondary chatroom/classroom and other social media running all day. This is also my travel trading station now. When I go out of town all I have to do is unhook the laptop and monitors. A couple twists of a knob and the cart is in 2 pieces. The cables stay attached to the cart so it breaks down and assembles in less than 5 minutes. It works great. This is actually the setup I traded when I was out of town for a few days last month. I am very comfortable trading with this setup as well. It forces me to to focus more on tickers that offer the best setups. This is also the one I roll outside on the patio when the weather is nice. I just unhook from the monitor attached to the main station and I am outside enjoying this beautiful SC whether while it lasts!
Well this is my trading station at a glance. Hope it answered all of the questions. Another thing to note is that it took me many months to buy everything, and then I take a % of my profits to invest in the business for upgrades as they are needed. You never know when a computer or a monitor will take a crap and leave you hanging.
Happy Trading!
Sunday, June 7, 2015
Who Are You?
Recently I was asked, "who are you?" by a veteran trader. Not in a derogatory way but in a way for me to look inside myself and try to determine who I am as a trader. It was in response to a post I made earlier in the week concerning my mid-week struggles. Another question he asked is if I had a journal or a blog that I could go back to and figure out who I am. So I mentioned in my last blog that I went back to my blog and found my way back rather quickly. But, the question he asked me first has been eating away at me all weekend. I'm sitting here watching NASCAR, as I usually do all weekend. If there is a Camping Work truck race and an Xfinity race during the weekend, I am there. It's really a good weekend if there is a drag race on TV as well. But I just couldn't get that question out of my mind. So, I decided to put my thoughts together in a blog so that I can have a quick reference guide to go to in case I forget who I am as a trader again.
It's good that I have reminders that guru's have shared posted on my desk but how do I directly relate them to me. What are my thoughts concerning these rules and common mistakes that new traders make and how they relate to me. How do I define myself as a trader?
Well, first and foremost, I am an "Average Joe" hence the screen name I chose. I am a long biased trader. Now that may change over time but this mindset has brought me to this point. My big loss last week was on a short that ran away from me quick and I didn't have a plan for that. Should have had my stop in, went in with a smaller size, plus other things I didn't do right. So if I had a set of "rules" specific to me, what would they be? I figured I should work on some and these should be posted as well so I won't get lost in a stupid trade that doesn't go with my style.
1. Focus only on the best setups that I am familiar and consistently profitable with.
2. I need to make sure I have a plan for each trade before I enter any trade. I have to have a defined entry and exit strategy and a defined stop.
3. Keep my plan simple.
4. Use the price action, volume, RSI, and VWAP to establish my plan for the trade
5. Make sure the trade is definitely a quality setup.
6. Never get emotional in a trade. If I do, I'm in with too much size or I do not have a solid plan that I understand
7. Never follow anyone else into a trade. Never! Always make sure I vet every ticker I trade.
8. Losses are good if I learn from them. Focus more on my losses and failed trades
9. Cut losses quickly. Use position size correctly to establish correct R/R: At least 2:1
10. Be prepared to improvise, adapt, and overcome in the changing markets.
It's good that I have reminders that guru's have shared posted on my desk but how do I directly relate them to me. What are my thoughts concerning these rules and common mistakes that new traders make and how they relate to me. How do I define myself as a trader?
Well, first and foremost, I am an "Average Joe" hence the screen name I chose. I am a long biased trader. Now that may change over time but this mindset has brought me to this point. My big loss last week was on a short that ran away from me quick and I didn't have a plan for that. Should have had my stop in, went in with a smaller size, plus other things I didn't do right. So if I had a set of "rules" specific to me, what would they be? I figured I should work on some and these should be posted as well so I won't get lost in a stupid trade that doesn't go with my style.
Intra-day Trading Rules
1. Focus only on the best setups that I am familiar and consistently profitable with.
2. I need to make sure I have a plan for each trade before I enter any trade. I have to have a defined entry and exit strategy and a defined stop.
3. Keep my plan simple.
4. Use the price action, volume, RSI, and VWAP to establish my plan for the trade
5. Make sure the trade is definitely a quality setup.
6. Never get emotional in a trade. If I do, I'm in with too much size or I do not have a solid plan that I understand
7. Never follow anyone else into a trade. Never! Always make sure I vet every ticker I trade.
8. Losses are good if I learn from them. Focus more on my losses and failed trades
9. Cut losses quickly. Use position size correctly to establish correct R/R: At least 2:1
10. Be prepared to improvise, adapt, and overcome in the changing markets.
Quick Reverence Guide
1. My Setups
- 15 Minute Opening Range Breakout - Pre-market gappers
- 15 Minute Opening Range Breakdown - Pre-market gappers
- Bottom Reversals
- Top Reversals
Sub or Secondary Setups - Patterns I normally look for after I have traded the initial move
-Trades off of the VWAP (above for longs and below for shorts)
- ABCD set-ups for long trades - typically a secondary move for my pre-market gappers.
- Gearing and perking to break key resistance areas, HOD, R/G moves
2. Best time of the day for me to make profits is 9:30 to 12 so that's the time for me to be aggressive. Later in the day will need to make sure the setups I trade are solid and take profits quickly.
3. Make sure I know where the SPY is trading. If it's trading below the VWAP, take caution on long trades. If trading above take caution on trades to the short side.
My setups are simple so I do not need a lot of indicators to help me trade. I like to get in and get out as fast at the trade allows. As I develop as a trader, I will swing more and take trades with plans of holding for longer time frames.
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