A Strong Trading Mind

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The Downside of Trading in Isolation

http://eminimind.com/trading-isolation-downside/

Working from home and being your own boss can be great, but it can also suck.

Here are some important things to keep in mind if you decide to make the switch from a traditional office to a working at home environment.
The #1 most important thing, stay involved!

For us introverts (I’m and INTJ), it’s easy to put our heads down and not be seen for days, or even weeks at a time. This can be great, because we get a lot accomplished, but it also removes you from the human interaction element, a place where lots of great conversation and idea evolution occurs.

Late at night before you fall asleep may be where some of your bet ideas come from, but it’s this collaboration where great ideas evolve.

The best way to avoid the isolation trap is to find ways to stay involved with the community. This can be through trader meet up groups, getting together with a trading buddy on a regular basis, or using Skype to chat throughout the day or after market close.

It doesn’t have to be just trading related either. The more books I read, podcasts I listen to, and people I interact with that are NOT a part of the trading realm, the more useful and interesting viewpoints I pickup that I can then apply to my own trading.
How to know if you’re cut out for working at home?

The work from home atmosphere is great for some people and horrible for others. Co-working spaces are becoming more popular these days, but the determining factor is, are you capable of managing your time and being productive without a boss?

Most people say yes, but that’s often not the case.

If you’re the type of person who is self motivated, good at efficiently managing your time, and can pull back every now and again to make sure you’re still on course you can do well in this type of work environment.

A routine and work plan is crucial. Here’s an example of my trading routine from a few years back. I don’t wake up for the Euro open anymore as it became too stressful on my sleep schedule, but the general concept is the same.
The risks of trading in isolation

• No socialization, distanced from society
• Getting stuck in a rut, lack of career development
• No new challenges or collaboration

Working from my home office during trading hours is where I feel the most comfortable, but outside of market hours I like to get out, go for walks and spend time talking with other people (both traders and non-traders).

To read more about setting up your own home office you can checkout my post: How to Create a Home trading Office for Under $1000
What to do if you get stuck in a rut

Mix it up, grab your laptop and head to a new part of town, new coffee shop, library, or any place you don’t usually frequent. Go online and search for coffee shops or co-working spaces a few towns over. Even if you’re only doing your nightly analysis there it can serve to be a great benefit.

I enjoy working from coffee shops or public places on Saturday mornings or days when the markets are closed. I’ll typically use this opportunity to meet up with a friend and talk shop or work on other projects that I have going.

So don’t be afraid to put yourself out there, join a club or organization, or introduce yourself to someone new. You just never know the lasting effect one person can have on your business — or your life.

 

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The reason for starting this thread.All of us need a boost with Trading Psychology sometime in our trading careers.

 

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5 Uncommon Rules of Wealthy Traders

http://www.tradingmarkets.com/recent/5_uncommon_rules_of_wealthy_traders-677801.html

Some of the traders make hundreds of thousands – even millions – of dollars each trading their own account. These aren’t your typical “always use a hard stop loss” type of rules . These are actual guidelines successful traders follow religiously.

1. They plan every single trade. EVERY SINGLE ONE.

Every trader I’ve talked with that makes money consistently knows the following about every single trade they take before they even begin entering a limit order into their trading platform:

a) the highest price they are willing to pay (if they are going long) or the lowest price at which they are willing to sell (if they are going short)
b) their profit target where they will exit if they are “right”
c) their stop loss where they will exit if they are “wrong”
d) the risk/reward ratio of the trade
e) the exact percentage of their account they are risking

Lots of traders do one or two of these things. Few do all of them. In simple terms they know exactly what they want to pay, how much money they anticipate making (or losing) and a very clear idea on the probability of the trade working out.

2. They stopped trying to pick tops and bottoms years ago

The funny thing is that only a very few successful traders I have ever talked to trade that way. Simply put, 95% of the traders out there that make money are buying higher highs and selling lower lows. They do the exact opposite of nearly everyone out there because they found out long ago that picking tops and bottoms is a sucker’s bet. One trader described it to me by saying that it’s much easier to just participate in what a market is already doing than trying to guess when that behavior will change. Flip-flop your strategy to agree with what the market is doing rather than guessing on when it will change its mind, and you’ll be in a much better position to make money trading.

3. They are patient with winners – and ridiculously impatient with losers.

Dennis Gartman is famous for boiling down great trading to one thing: “Do more of what is working and less of what isn’t.” Sure makes a lot of sense to me.

Most traders have a great deal of patience with their losers but get nervous about locking in gains and sell them to quickly – the exact opposite of what wealthy traders do. Wealthy traders realize that they may actually have more losing trades than winning trades so they quickly get out when they are wrong. It is the only way to ensure that they can give their winners the attention they deserve.

4. They trade one market. ONE

The vast majority of successful traders concentrate on one market and become so comfortable with it that they begin to “know” the behavior of that market just watching price and volume. Test yourself – if you aren’t able to get rid of all your charts and simply look at price and volume to trade, you’re probably not concentrating enough on one market in order to know its moods. What we’re really talking about here, of course, is not the mood of the market itself but the moods of the market participants!

Focus on trading one market exceptionally well rather than try to trade whatever’s hot – that’s how wealthy traders do it.

5. Their benchmark for success is anything but money

Money changes everything. It sure does. We’re all in this to make money. The trouble is, when traders use the amount of money they make to judge their own success, something happens to them – to all of us, really – that clouds our decision-making ability.

Wealthy traders have realized this and instead focus on other things to determine if they’ve had a successful day. Whether it be how well they were able to execute on their trading plan (see rule #1), or their overall ability to predict short-term movements in whatever they are trading, they know that if they do those things correctly, the money will follow.

Yes of course the money is important. Any trader who says otherwise is a fool. Why else would we put ourselves through this daily ride. But there is something about making it a secondary focus that allows the best traders to make better decisions. The growing trading account simply becomes a nice result – a side benefit if you will – of making good decisions and reading the market well

 

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Trader Intuition: How to Know When You’ve Got it and When to Trust it

http://eminimind.com/trader-intuition-trust/

As traders, we look at the world differently than most people. We’ve trained our brains to think in terms of risk, and we assess new opportunities from many different angles (at least I do).

When I first started out as a trader I read and listened to a lot of interviews of top traders.
“You and only you are responsible for your trades.”

Over and over again I would hear them talk about how trading is a direct reflection on yourself. The style you choose and the way you trade must fit with who you are.

What is Trader Intuition?

Great traders have the ability to sense the rhythm and pace, and can pick up on the nuances of the market.

The traders I know down in the pits at the CBOT use this “feel” everyday to make trading decisions. So how then, do we develop this intuition ourselves and know when to trust it?

The answer lies in differentiating our intuition from our emotions. New traders execute trades based on how they feel or what they want to happen at the time of the trade, they don’t have a calculated edge, they’re just shooting from the hip.

Experienced traders execute trades based on calculated risks and a predetermined edge. For those of us who consider ourselves experienced, we’ve learned to let go of the emotional attachment to a trade or idea. This opens up the door for objective observation.

Think of Yourself as an Observer

When you place a trade based on an emotional response you will most often lose. In the long run it’s certain to lead to ruin. Instead of approaching the markets with the attitude of “myself versus the market,” I prefer to take a more passive approach as observer; only jumping in when I can identify a clear edge.

The most objective role we can pay is the role of the observer. Over time, I found that I’m just as calm and level headed while in a trade as I am on the sidelines, this is a big step in the path to progressing as a trader.

When to Disregard Your Intuition

Realize that the tendencies and biases you bring to trading will 99 times out of 100 be wrong. Your initial feelings and instincts are simply human in nature, thus new traders act just as others do. Make a note of these initial feelings and learn to set them aside, do not act on them.

After a few years of studying the markets, focusing in on one method and a few select markets I began to develop a “feel” for the markets I was trading. This is the intuition you want to listen to.

Understanding Your State of Mind

There are things we pickup on in the markets without us even consciously realize it. When I feel good, I trade well. When I’m in a “groove” or “rhythm” I come into each day looking at the markets in an objective manor, I can clearly assess the risks, and determine where the best opportunities lie.

It’s only when you can accept the risks and trade without fear that you will be in a state of mind to become completely “in tune” with the markets.

How to Get into a Trading Groove

Mark Douglas (and more commonly great athletes) call this feeling being “In the Zone.”

Being in the zone doesn’t necessarily mean that you are currently in a position. You could be sitting on the sidelines waiting for a setup when you notice something different about the markets, a small change. Maybe you can’t pin point it exactly, it’s usually a combination of factors you pick up on subconsciously. This is the time when I trust my intuition.

I know what it’s like to think the market should do one thing and have it do another. Things don’t always make sense. The more you observe your thoughts and reactions the better prepared you will be to react on the right side of the market.

Notebooks, Journals, and Post.

I’m a big fan of post it notes. I keep them all over my desk. I record little things that I want to revisit later. Key levels, bigger picture items, a stock that caught my attention that I’d like to look at later in the week. These act as great reminders.

The notebooks are great too. When I created my trading journal I leave plenty of room for notes. I am constantly reviewing my old notebooks and observations.

You’ll know when you’re in the zone, that groove, that rhythm, listen to your intuition when you’re in this state of mind. Just make sure not to get too cocky and think you’re invincible. It’s when we fall back on our emotions that the rug gets pulled out from under us.

The Bottom Line

It’s only when we are in a rhythm that we should be listening to our intuition. When you have developed a rhythm and are in a clear state of mind and thinking objectively our intuition can be of great value.

 

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Our actions ,habits and characters are all greatly influenced by the type of words we use in our day to day conversations.

It is very useful to use those words which reflect positivity.Check your vocabulary,does it contain more positive or more negative words?

Try and change the words you use.Surely will change your attitude and consequently your habits and eventually your character.

As an example see a list of very positive words.

Start using these words from TODAY.

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