A trader must have quantified entry signals that tell them when to enter where the probabilities of success are in their favor of being profitable. A trader must build a robust trading system with a positive expectation model of a high winning percent of trades or one that will have bigger wins than losses… Read More »
In all my years of trading and talking to fellow traders, I have noticed that newbie traders are susceptible to four main psychological pitfalls. Let’s take a look at each one and examine them carefully. Hopefully, after reading this, you will be able to see them coming and stop them before they destroy your account.… Read More »
In 1968, a self-described “gun-slinging nitwit,” fresh out of Harvard Business School, Grantham played the go-go market at its peak. By 1970, he had lost all of his money. “I like to say I got wiped out before anyone else knew the bear market started,” Grantham recalled years later. Think about that. The man who… Read More »
1. “Money is made by sitting, not trading.” 2. “It takes time to make money.” 3. “It was never my thinking that made the big money for me, it always was sitting.” 4. “Nobody can catch all the fluctuations.” 5. “The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall… Read More »
Traders jump from trading strategy to trading strategy. Traders must find specific methodologies and systems and focus on trading them with discipline. Position sizing is too big. New traders tend to trade so big that it engages their emotions to interfere with the trade and creates big losses that destroy their capital. They… Read More »
Attitude Attitude is hugely important but useless on its own. It’s no good having the best attitude in the world if you’re not “out there” trading the stock market. So what is attitude apart from how one feels about oneself and others? It is how you see things, how you let events, situations and circumstances… Read More »
What is the overall direction the market is moving with in your time frame and the larger time frame? What time frame will you be trading with your next trade? What is your entry signal and what is its historical performance as a winning set up? How much money will you risk… Read More »
In this cutthroat world we live in, we often follow the motto, “The ends justify the means.” Blind ambition, self-sacrifice, and extreme self-control are valued. If you can work tirelessly, wait long enough, and quickly recover from endless setbacks, you’ll be one of the select few who survive and reap the rewards. It’s true in… Read More »
LET THE MARKET BE YOUR BOSS. Hold your opinions loosely and your discipline tightly. Trade in the direction of the trend for your time frame. Be quick to admit when you are wrong but hold your winners for as long as they keep going in your favor. You stop trading your plan and start… Read More »
“I think successful trading, or poker playing for that matter, involves speculating rather than gambling. Successful speculation implies taking risks when the odds are in your favor. Just like in poker, where you have to know which hands to bet on, in trading you have to know when the odds are in your favor.” –… Read More »