A Strong Trading Mind
- Thread starter amitrandive
- Start date
Test of Opening Range S/R
http://yourtradingcoach.com/trading-process-and-strategy/test-of-opening-range-sr/
As with all levels of support and resistance…
(a) Remember that it’s an area, not a level.
(b) There are no guarantees! Remember… all S/R should be considered “potential” S/R.
(c) Every test of S/R is unique. You still need to conduct your strength / weakness analysis. Don’t just blindly enter and hope for a win.
(d) The level should be removed from your chart if price has moved back and forth through the opening range with no (or minimal) impact.
And for a very wide opening range… consider the opening range high and the opening range low as two separate areas of S/R.
http://yourtradingcoach.com/trading-process-and-strategy/test-of-opening-range-sr/
As with all levels of support and resistance…
(a) Remember that it’s an area, not a level.
(b) There are no guarantees! Remember… all S/R should be considered “potential” S/R.
(c) Every test of S/R is unique. You still need to conduct your strength / weakness analysis. Don’t just blindly enter and hope for a win.
(d) The level should be removed from your chart if price has moved back and forth through the opening range with no (or minimal) impact.
And for a very wide opening range… consider the opening range high and the opening range low as two separate areas of S/R.
A Trading Psychology Lesson From a Nine Year Old
From Blog of Lance Beggs
I was driving in my car the other night with my twin daughters when the conversation somehow turned to what they wanted to do when they grow up.
Naturally, being only nine years old, they had many ideas. There were those that I was very happy with - an astronomer, a veterinarian, a professional soccer player, or a guitarist in a rock band. And there were some suggestions that I just didn't like at all. Not that it's my decision! I'll naturally support them in whichever path they chose for their life; however let's just say a nine year old should not know what a Forensic Scientist does.
I asked if either were interested in trading, to which Caitlin replied, "But isn't trading just guessing?"
That was unexpected! I was a little taken aback and frankly quite annoyed that she thought that all I did was 'guessing'. I replied by explaining that there was a lot more to trading than just guessing which way the market went. But the conversation quickly moved on to other areas, as appears normal when speaking with nine year olds.
That night I put a little more thought to our discussion, not so much out of concern about my daughter's perception of my career, but rather my emotional reaction to her statement. Why should I allow myself to feel a little insulted by claims that all I do is 'guess' market direction?
What do I actually do in the markets?
I assume risk in the markets, with an expectation of profits. But surely it's not just guessing, or gambling, or taking a punt. I take positions on my terms only. It's a calculated business decision. Through skillful analysis of past and current price action and an assessment of likely future price action I am able to identify opportunities to profit from market trends. And I combine this with action designed to reduce or eliminate any risk while seeking to maximize that profit. This is no different to any other business.
I've been lucky enough to be involved in a number of other 'cool' careers, but nothing has satisfied that need within my soul for a meaningful existence like being a trader does.
And I certainly believe that the career of a trader does provide significant benefits for society (a subject for another future article perhaps).
But when you really get down to the nuts and bolts, is what I do any different from guessing?
The definition of guessing according to the American Heritage Dictionary is: (* EDIT: In response to feedback...ok... I accept this dictionary is not the most authoritative source, but it was the first one at hand and will be sufficient for the purposes of this discussion)
a. To predict (a result or an event) without sufficient information.
b. To assume, presume, or assert (a fact) without sufficient information.
The common point here is 'without sufficient information', a phrase which certainly applies to the world of market analysis.
A novice trader expects that certainty can be found through better analysis or better indicators or indicator parameters. And so they get stuck for several years on this search for the Holy Grail solution. It's only when all attempts at this have failed and they're willing to accept it as a misguided attempt to hide from their fear of uncertainty, and are willing to embrace that uncertainty, can they take the next step on the path towards professional trading.
The fact is that market analysis cannot predict the future. All future events cannot be known. And even if they could be known, then we still don't know how these events will be perceived by the market participants and will therefore influence price.
A trader operates in an uncertain world. And all trading decisions are made without sufficient information, based on an assessment of the probabilities and a minimization of risk to protect your capital when you get it wrong.
Essentially, my daughter was correct - I 'guess' market direction.
The difference is that some traders guess market direction without any real plan or guidelines for formulating that decision, with an inadequate appreciation of both risk and opportunity and with an undisciplined, unprofessional and emotionally influenced execution of their trade. And their losses feed the account of those who guess market direction based on a documented, tested and proven plan which is designed to contain risk when they're wrong and maximize opportunity when they're right, combined with consistency in execution of their plan.
I guess market direction, but I do so within a framework provided by my business plan and an understanding of the probabilistic nature of the markets.
I had assumed I was at a stage where I was comfortable with who I was and what I did. It appears now that this assumption was false and I have more work to do on myself. It makes sense - personal growth shouldn't be expected to ever end.
Why was my ego bruised at claims that I'm just a 'guesser'? There are many possible reasons that I need to address in more detail:
• At a deep level I really want my daughters to be proud of me. Perhaps for a moment I suspected they weren't?
• Maybe my own self-importance was inflating at too rapid a rate (finally reaching an overhead resistance for a great shorting opportunity)
• Maybe at some level I still have concerns that being a trader is a Way of life that adds limited value to society?
• Maybe I still have some doubts about my long-term survivability in this industry, and so feel that by 'guessing' I am gambling my family's future?
Who knows? I've got more work to do in understanding this.
Your beliefs about what trading is and why you do it are fundamental to the success of your trading business. You cannot expect to operate in a consistently profitable manner if you have conflicting beliefs about the value of yourself, of your chosen career or of your ability to succeed at it.
So when your ego takes a little hit from someone's comments about trading, take the time out to examine your own beliefs. It doesn't matter what the comment is:
• Suggestions that it's impossible to profit from the market.
• Claims that you'll never be able to make it.
• Cutting comments about how those losses could really have been better used elsewhere.
If it produces an emotional response in you, take some time out to ask why? What does your emotional response mean in terms of your beliefs about yourself and your chosen career as a trader?
That self-examination may reveal the breakthrough you were seeking, to take you to the next stage of your career or personal development.
From Blog of Lance Beggs
I was driving in my car the other night with my twin daughters when the conversation somehow turned to what they wanted to do when they grow up.
Naturally, being only nine years old, they had many ideas. There were those that I was very happy with - an astronomer, a veterinarian, a professional soccer player, or a guitarist in a rock band. And there were some suggestions that I just didn't like at all. Not that it's my decision! I'll naturally support them in whichever path they chose for their life; however let's just say a nine year old should not know what a Forensic Scientist does.
I asked if either were interested in trading, to which Caitlin replied, "But isn't trading just guessing?"
That was unexpected! I was a little taken aback and frankly quite annoyed that she thought that all I did was 'guessing'. I replied by explaining that there was a lot more to trading than just guessing which way the market went. But the conversation quickly moved on to other areas, as appears normal when speaking with nine year olds.
That night I put a little more thought to our discussion, not so much out of concern about my daughter's perception of my career, but rather my emotional reaction to her statement. Why should I allow myself to feel a little insulted by claims that all I do is 'guess' market direction?
What do I actually do in the markets?
I assume risk in the markets, with an expectation of profits. But surely it's not just guessing, or gambling, or taking a punt. I take positions on my terms only. It's a calculated business decision. Through skillful analysis of past and current price action and an assessment of likely future price action I am able to identify opportunities to profit from market trends. And I combine this with action designed to reduce or eliminate any risk while seeking to maximize that profit. This is no different to any other business.
I've been lucky enough to be involved in a number of other 'cool' careers, but nothing has satisfied that need within my soul for a meaningful existence like being a trader does.
And I certainly believe that the career of a trader does provide significant benefits for society (a subject for another future article perhaps).
But when you really get down to the nuts and bolts, is what I do any different from guessing?
The definition of guessing according to the American Heritage Dictionary is: (* EDIT: In response to feedback...ok... I accept this dictionary is not the most authoritative source, but it was the first one at hand and will be sufficient for the purposes of this discussion)
a. To predict (a result or an event) without sufficient information.
b. To assume, presume, or assert (a fact) without sufficient information.
The common point here is 'without sufficient information', a phrase which certainly applies to the world of market analysis.
A novice trader expects that certainty can be found through better analysis or better indicators or indicator parameters. And so they get stuck for several years on this search for the Holy Grail solution. It's only when all attempts at this have failed and they're willing to accept it as a misguided attempt to hide from their fear of uncertainty, and are willing to embrace that uncertainty, can they take the next step on the path towards professional trading.
The fact is that market analysis cannot predict the future. All future events cannot be known. And even if they could be known, then we still don't know how these events will be perceived by the market participants and will therefore influence price.
A trader operates in an uncertain world. And all trading decisions are made without sufficient information, based on an assessment of the probabilities and a minimization of risk to protect your capital when you get it wrong.
Essentially, my daughter was correct - I 'guess' market direction.
The difference is that some traders guess market direction without any real plan or guidelines for formulating that decision, with an inadequate appreciation of both risk and opportunity and with an undisciplined, unprofessional and emotionally influenced execution of their trade. And their losses feed the account of those who guess market direction based on a documented, tested and proven plan which is designed to contain risk when they're wrong and maximize opportunity when they're right, combined with consistency in execution of their plan.
I guess market direction, but I do so within a framework provided by my business plan and an understanding of the probabilistic nature of the markets.
I had assumed I was at a stage where I was comfortable with who I was and what I did. It appears now that this assumption was false and I have more work to do on myself. It makes sense - personal growth shouldn't be expected to ever end.
Why was my ego bruised at claims that I'm just a 'guesser'? There are many possible reasons that I need to address in more detail:
• At a deep level I really want my daughters to be proud of me. Perhaps for a moment I suspected they weren't?
• Maybe my own self-importance was inflating at too rapid a rate (finally reaching an overhead resistance for a great shorting opportunity)
• Maybe at some level I still have concerns that being a trader is a Way of life that adds limited value to society?
• Maybe I still have some doubts about my long-term survivability in this industry, and so feel that by 'guessing' I am gambling my family's future?
Who knows? I've got more work to do in understanding this.
Your beliefs about what trading is and why you do it are fundamental to the success of your trading business. You cannot expect to operate in a consistently profitable manner if you have conflicting beliefs about the value of yourself, of your chosen career or of your ability to succeed at it.
So when your ego takes a little hit from someone's comments about trading, take the time out to examine your own beliefs. It doesn't matter what the comment is:
• Suggestions that it's impossible to profit from the market.
• Claims that you'll never be able to make it.
• Cutting comments about how those losses could really have been better used elsewhere.
If it produces an emotional response in you, take some time out to ask why? What does your emotional response mean in terms of your beliefs about yourself and your chosen career as a trader?
That self-examination may reveal the breakthrough you were seeking, to take you to the next stage of your career or personal development.
11 Strategies for Managing Stress
http://success.com/article/11-strategies-for-managing-stress
Evaluate your stressors to better cope.
The root of stress management is realizing stress is information that we can examine and use, and the first step in understanding that data is becoming mindful of our stress and its impact upon us, says Kathleen Hall, founder of The Stress Institute in Atlanta.
1. If you can’t avoid a stressful situation, try to alter it.
Often, this involves changing the way you communicate and operate in your daily life. Express your feelings instead of bottling them up. Be willing to compromise but be more assertive. Manage your time better. (Helpguide.org)
2. If you can’t change the stressor, change yourself.
Reframe problems. Try to view stressful situations from a more positive perspective. Look at the big picture. Take perspective of the stressful situation. Focus on the positive; this simple strategy can help you keep things in perspective. (Helpguide.org)
3. Take a break from a stressor.
It may seem difficult to get away from a big work project, a crying baby, or a growing credit card bill, but when you give yourself permission to step away from it you can gain a new perspective and feel less overwhelmed. It’s important to not avoid your stress (those bills have to be paid sometime), but even 20 minutes of self-care is helpful. (American Psychological Association)
4. Breathing is the foundation to de-stress and heal.
Our normal shallow breathing starves the body and brain of oxygen, which affects the immune and cardiopulmonary systems. Develop the practice of taking several deep diaphragmatic breaths in a tense moment; it clears the mind, body, and soul. (The Stress Institute)
5. Scientific research supports the practice that quieting the mind, body, and soul offers great health benefits.
Find a quiet place, get comfortable, focus on a one- to five-word phrase you fancy and repeat it over and over. Take deep diaphragmatic breaths, in and out, in and out. You may want to set a timer in the beginning for 10 minutes so you won’t worry about time. The practice sends healing hormones into your body for relaxation and health. (The Stress Institute)
6. Be aware of your unhealthy coping methods to dealing with stress.
Turning to food, alcohol or drugs often just turns one set of problems into another that can balloon out of control. It’s better to avoid those unhealthy coping mechanisms from the start, and find good ways to keep your stress under control. (Psych Central)
7. The practice of journaling has health benefits.
Journaling reduces stress by removing the worry and thoughts racing over and over in your mind. You move these worries, concerns, hopes or dreams out of your body onto the paper. (The Stress Institute)
8. Affirmations can affect our health.
Research indicates every thought and emotion creates a chemical release into our bodies, which affect our mental, physical and spiritual health and well-being. Negative self-talk can be damaging; giving positive messages wards this damage off. (The Stress Institute)
9. Friendships are strong indicators of mental, physical and spiritual health. Friendship is not a luxury, but is essential to work-life balance and your health. Studies show that isolation decreases immune functioning and increases mortality risk. (The Stress Institute)
10. Exercise regularly, sleep, and eat a healthy diet.
Physical activity plays a key role in reducing and preventing the effects of stress. Make time for at least 30 minutes of exercise, three times per week. Aerobic exercise does wonders for releasing pent-up stress and tension. Well-nourished bodies are better prepared to cope with stress. Start your day right with breakfast, and keep your energy up and your mind clear with balanced, nutritious meals throughout the day. Reduce caffeine and sugar. Get enough sleep. Adequate sleep fuels your mind, as well as your body. Feeling tired will increase your stress because it may cause you to think irrationally. (Centers for Disease Control and Prevention)
11. Heighten your awareness of the moment by focusing intently on an object.
Notice a pencil’s shape, color, weight and feel. Or slowly savor a raisin or a piece of chocolate. Mindfulness leads to relaxation. Realize that managing stress is not a one-size-fits-all proposition. Everyone is different, and reacts to stress differently. (Multiple Sources)
http://success.com/article/11-strategies-for-managing-stress
Evaluate your stressors to better cope.
The root of stress management is realizing stress is information that we can examine and use, and the first step in understanding that data is becoming mindful of our stress and its impact upon us, says Kathleen Hall, founder of The Stress Institute in Atlanta.
1. If you can’t avoid a stressful situation, try to alter it.
Often, this involves changing the way you communicate and operate in your daily life. Express your feelings instead of bottling them up. Be willing to compromise but be more assertive. Manage your time better. (Helpguide.org)
2. If you can’t change the stressor, change yourself.
Reframe problems. Try to view stressful situations from a more positive perspective. Look at the big picture. Take perspective of the stressful situation. Focus on the positive; this simple strategy can help you keep things in perspective. (Helpguide.org)
3. Take a break from a stressor.
It may seem difficult to get away from a big work project, a crying baby, or a growing credit card bill, but when you give yourself permission to step away from it you can gain a new perspective and feel less overwhelmed. It’s important to not avoid your stress (those bills have to be paid sometime), but even 20 minutes of self-care is helpful. (American Psychological Association)
4. Breathing is the foundation to de-stress and heal.
Our normal shallow breathing starves the body and brain of oxygen, which affects the immune and cardiopulmonary systems. Develop the practice of taking several deep diaphragmatic breaths in a tense moment; it clears the mind, body, and soul. (The Stress Institute)
5. Scientific research supports the practice that quieting the mind, body, and soul offers great health benefits.
Find a quiet place, get comfortable, focus on a one- to five-word phrase you fancy and repeat it over and over. Take deep diaphragmatic breaths, in and out, in and out. You may want to set a timer in the beginning for 10 minutes so you won’t worry about time. The practice sends healing hormones into your body for relaxation and health. (The Stress Institute)
6. Be aware of your unhealthy coping methods to dealing with stress.
Turning to food, alcohol or drugs often just turns one set of problems into another that can balloon out of control. It’s better to avoid those unhealthy coping mechanisms from the start, and find good ways to keep your stress under control. (Psych Central)
7. The practice of journaling has health benefits.
Journaling reduces stress by removing the worry and thoughts racing over and over in your mind. You move these worries, concerns, hopes or dreams out of your body onto the paper. (The Stress Institute)
8. Affirmations can affect our health.
Research indicates every thought and emotion creates a chemical release into our bodies, which affect our mental, physical and spiritual health and well-being. Negative self-talk can be damaging; giving positive messages wards this damage off. (The Stress Institute)
9. Friendships are strong indicators of mental, physical and spiritual health. Friendship is not a luxury, but is essential to work-life balance and your health. Studies show that isolation decreases immune functioning and increases mortality risk. (The Stress Institute)
10. Exercise regularly, sleep, and eat a healthy diet.
Physical activity plays a key role in reducing and preventing the effects of stress. Make time for at least 30 minutes of exercise, three times per week. Aerobic exercise does wonders for releasing pent-up stress and tension. Well-nourished bodies are better prepared to cope with stress. Start your day right with breakfast, and keep your energy up and your mind clear with balanced, nutritious meals throughout the day. Reduce caffeine and sugar. Get enough sleep. Adequate sleep fuels your mind, as well as your body. Feeling tired will increase your stress because it may cause you to think irrationally. (Centers for Disease Control and Prevention)
11. Heighten your awareness of the moment by focusing intently on an object.
Notice a pencil’s shape, color, weight and feel. Or slowly savor a raisin or a piece of chocolate. Mindfulness leads to relaxation. Realize that managing stress is not a one-size-fits-all proposition. Everyone is different, and reacts to stress differently. (Multiple Sources)
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