Archive for January, 2009
Trading Attitude Goes a Long Way
January 27, 2009 at 12:39 pm
Recently I spoke with a trader who was really struggling. Not only were his results not up to his standards, but more importantly, his attitude was pitiful.
One comment he made really stood out to me about how he was approaching his trading – and how he could alter it for better results. After taking a couple of small hits in failed trades, he remarked:
Accuracy is important to me. It means everything to how i look at the market the next day and how i look at myself in the mirror at night.
I think we all deal with that to a degree as traders, and especially us guys tend to equate recent trading results with how we think of ourselves. Not deep down inside – I don’t mean that, because many of us have values rooted elsewhere – but our day-to-day mood is often impacted by our trading results.
That’s common across many professions, but full-time traders probably have it even worse since we can keep score every second of the day and know where we are and where we want to be, and often times there’s that discrepancy which causes some frustration.
That’s where huge mistakes can creep in if we let them, as we increase size or trade frequency based on our desire for quick gains rather than when the charts necessitate it.
Two Solutions
I think zooming out on the timeframe of self-evaluation is key. Instead of responding to every tick with an “I’m a genius” or “I’m an idiot” mentality (which can be so exhausting), why not look at your results from a week to week or month to month basis? The daily swings, particularly in this market, can just be too much of a roller coaster sometimes – both in an account and emotionally.
Another way to keep your attitude in check is to accept that you’ll be wrong, sometimes often. That’s not to say that you need to expect failure at all. However, as a trader, your job is to manage risk effectively first and foremost, and that means when you find yourself on the wrong side of a trade, it’s often wise to return to the sidelines to reevaluate it. Getting back in is fast and inexpensive – if you deem it necessary. Taking a string of small losses might reduce your accuracy percentage, yes, but the goal of trading is to be profitable. Too many traders tend to quickly forget that.
Check It
The aforementioned trader has already come a very long way from when we first met, ridding himself of his former style of operating primarily on hunches. Moving toward a more methodical approach has already shown him a huge improvement in his results, and it’s been fun to watch. But as with most Type-A personalities, he’s in a hurry to reach lofty goals – and I can’t blame him. He’ll get there if he will stay on track.
What’s most important at this juncture for him is that he checks his attitude on a regular basis. Just as he defers to the charts when making decisions and periodically monitors his P&L, he’s got to get into the habit of objectively gauging his mentality. When he’s patient and prepared, he’ll be far less-likely to allow his short-term results to dictate his mood. But if he falls back into the mindset of living and dying by every trade he makes, the road will get a lot longer and much more difficult.
As with so many other things, in trading it’s your attitude which can make the biggest difference between success and failure. When your attitude is in the right place is when you’re going to see the most growth – both personally and in your account.
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Know Your Method
January 20, 2009 at 11:29 am
For nearly a year and a half, I’ve been blessed to be a dad. It’s been an awesome experience, and I have really learned a lot (though I still have a long way to go).
During the same time, I’ve been able to observe my wife in her role as a mother, and it’s really amazing how quickly a mother knows what their child needs! I had heard of a mother’s intuition, but witnessing it first hand really puts it into perspective.
I think mothers start out with an innate ability, a talent, to determine their child’s needs. And yet there are still the elements of practice and experience which enhance the natural talent that was there to begin with. It takes work, but the combination of talent and effort produces quite a skill.
Similarities Abound
Trading isn’t any different in that regard.
As traders, each of us start out with some kind of talent. It may be that we take quickly to reading the tape and gauging momentum, or it might be that we realize very quickly just where the boundaries of our comfort zones are when it comes to risk tolerance. Whatever it happens to be, generally it isn’t long before we start to build a method around our needs.
And what’s so nice about trading is that’s entirely possible in the market – since there are so many ways to seek out profits. We truly can custom-build a method which is fully-suited to us.
Once we get to that point, and if we want to trade responsibly, then one of our biggest obligations is to understand our method backwards and forwards. We don’t have to know everything about the market or be able to predict what’s going to happen next. Anyone who tells you otherwise just hasn’t traded much. All we need to do is keep our eye on the ball and continue to monitor and adjust the way we’re trading in order to achieve better results.
Worthwhile Effort
Just like a mother’s watchful eye on her child, our ongoing effort to remain aware of everything that’s taking place can lead to a great understanding of our method. As a result, we quickly learn when to adjust and how to go about modifying our approach whenever necessary.
What would it mean to you if you understood your method well enough that you could make small adjustments on the fly and right away improve your results? It would be huge, wouldn’t it?
As the newness of the year begins to fade and early resolutions fall by the wayside, take a stand for your trading. Make a commitment – a goal – right now to become sharp enough that you pick up on subtle changes in the trading landscape which warrant your attention.
Learn to detect when the environment is not ideal for your trading, so that you will know when to adapt or back down. And then when you see opportunities to do so, make those small adjustments so that you can stay on top rather than falling behind.
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Market View Video – January 19, 2009
January 19, 2009 at 11:35 am
It’s always a good idea to start out the trading week by checking out the big-picture view and a look at the major averages. After all, they do have the biggest influence on how individual stocks move!
So as you start to consider what and how to trade this week, be sure to stop by and check out the Market View video over at TheStockBandit.TV.
And as always, Trade Like A Bandit this week!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
Trading Videos to Make You Better – TheStockBandit.TV
January 14, 2009 at 2:26 pm
For some time now, we’ve been producing a free newsletter over at TheStockBandit.com for those who are on the email list.
What started out as a free written newsletter ultimately morphed into free trading videos – and for good reason! Not only does the video format make the experience much more fun and exciting, but also far more insightful and informative.
There’s simply no comparison when it comes to video vs. the written format, which is why last year the Bandit Broadcast (our premium stock newsletter) also switched to video format.
Through the videos, I’m able to show & tell what I’m talking about. As a result, the feedback has been outstanding.
Introducing TheStockBandit.TV
In recent weeks, we’ve been working on a new way to distribute the free videos, and I think you’re going to love it. The solution is a brand new, stand-alone site set up solely for the purpose of these videos.
TheStockBandit.TV is a location where you can watch trading videos to your heart’s content! It’s a site where each video will be archived and available to you 24/7. Jump from clip to clip, or search for a topic and see if it has been covered. If not, just use the contact form and submit your request for what you’d like to see in a future episode.
These are trading videos, so each one you view is designed to help you become a better trader. Sometimes they’ll cover general trading topics or discuss a concept which is vital to your success. Other times, they’ll introduce helpful tips and tools for streamlining your trading process and narrowing your focus for better trading. Every video is concise, brief, and helpful, so that your time is always well-spent.
You’ll find new videos added regularly, so you will not want to miss what’s coming. Therefore, be absolutely sure to subscribe to the RSS feed, or join our free email list to be notified anytime new episodes are posted.
Here are those links once again:
TheStockBandit.TV (new free Trading Video site)
TheStockBandit.TV RSS Feed
Join the Email List for Updates
See you back here soon with another post, and I look forward to seeing you over at the Trading Videos site as well!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Trading Videos, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Market View Video January 4, 2009
January 4, 2009 at 12:47 pm
Although 2008 brought about one of the worst bear markets in history, it ended on an upbeat note with the indexes climbing higher in the final sessions. That paved the way for some additional upside as 2009 got underway with a solid rally last Friday.
That rally produced an important breakout from multi-week trading ranges which had prevented the major averages from making any meaningful headway. With resistance now broken, on a technical basis this market should be free to continue north for a little while before the next important levels are approached.
The biggest key will be volume, as we’ve seen considerably light trading activity around the holidays (which is typical and expected). This week as traders return to their desks en masse, we should see some marked improvement in participation, which could also shed some light on whether or not this breakout will prove trustworthy.
So as you start to build your trading plan for this week, be sure to stop by and check out this week’s Market View video over at the main site for a close look at the levels to keep an eye on.
(Click image to view video)
Trade well this week!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
