All Entries in the "Trading Psychology" Category

Yard Crew Traders – When The Bell Rings 2

April 10, 2012 at 7:35 am

Today, I bring you Episode 2 of When The Bell Rings.

Hopefully you caught Episode 1 last week which lays the groundwork for where this series gets its name. If not, check it out first!

In this episode, we’re talking about something which many traders fall into the habit of doing, but fail to recognize it until it’s too late. Once that happens, they tend to just accept it even though it leaves them at a huge disadvantage.

I hope you get a lot out of this second installment. Keep coming back for more in the days ahead, and of course if you find these helpful, then let me know!

(Direct video link is here for those interested in embedding it elsewhere to share).

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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Jeff White | Comments 3

Think Like a Poker Pro

April 4, 2012 at 7:40 am

I love the movie Rounders, in which Matt Damon is a poker player looking for a big break (and then a way to get out of some serious trouble).

In the movie, his character Mike McDermott makes a comment early on that as a player, “your goal is to win one big bet an hour – that’s it.”

Notice he said “win one big bet” rather than “place one big bet.” There’s a key distinction here and it applies to trading.

Amateur Hour

Amateurs too often think they need to place some big bets in order to win big. They couldn’t be farther from the truth.

Amateurs are also generally too proud to fold. That’s admitting defeat, and rather than seeing the bigger picture of losing some battles in order to win the war, they take a stand when they shouldn’t – and they pay for it.

How the Pro’s Play

Professional traders, on the other hand, realize there’s plenty of quiet time to endure before those payout opportunities occur. They realize it’s a matter of hanging around, staying in the game, in order to be fit to capitalize on the best “hands” they are dealt.

Professionals understand that taking small hit after small hit is easily undone by just a win or two – so long as they’re losing smaller and winning bigger. Be willing to fold repeatedly if necessary – the goal is to be net profitable, but that won’t happen every single time you commit your capital.

Trading is a numbers game, and professionals only play (or play for meaningful stakes) when conditions are most favorable. Very simple, but very difficult for many amateurs to do.

So the question is… are you thinking (and acting) more like an amateur or a pro?
(Hint: your results are likely already reflecting it.)

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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Jeff White | Comments 0

When The Bell Rings – Episode 1

April 2, 2012 at 7:30 am

I’ve been doing free trading videos here for a long time, but they’ve all been in screencast style as I narrate what’s on my charts and share insights with you. Those will continue, because certain things in trading must be illustrated in that manner in order to show you what I’m telling you.

But…

It’s time to put a little different spin on things and I felt that through some on camera face time, I’d be able to connect with you a little better and deliver some ideas and concepts that you absolutely MUST have as a trader.

So today, I bring you something I’ve been excited about lately but haven’t previously revealed with this new video series. I’m calling it When The Bell Rings, and here in Episode 1 I’ll explain why. Subsequent episodes will of course build on what’s delivered here, so by all means stay tuned and share your feedback if you’re finding these helpful.

Enjoy!

(Direct video link is here for those interested in embedding it elsewhere to share).

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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Jeff White | Comments 6

LIVE Chat on Thursday, March 29, 2012

March 27, 2012 at 8:00 am

This Thursday morning for the eTradingExpo, I’ll be chatting live at 11:30am ET. I hope you can make it to my session!

Specifically, I’ll be discussing Adapting to Changing Market Conditions. I have a lot of good stuff planned, and we’ll talk about being equipped with different techniques and having an awareness of what to watch for to indicate the landscape is shifting. I’m excited about giving you some insights for better trading and having the opportunity to answer your questions live.

Make plans to attend virtually by pre-registering today (it’s free)!

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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Jeff White | Comments 0

How Long are Levels Valid?

February 29, 2012 at 9:55 am

A Bandit subscriber recently asked me about levels and how long they should be watched. This was a great question, so I wanted to be sure to share this exchange with you.

Question:
Jeff, I’m new to trading (since Christmas). I’m wondering how important long term resistance levels are. I suppose it depends really on the market conditions. A skittish market probably respects them more. This market seems to be plowing on through them regardless. The NASDAQ now, is free and clear of them with its breaking through the eleven year high, unless it goes down again.

The reason I am asking is that I’m sticking to a 4 1/2 month chart and ignoring any information older than that. It simplifies things and I wonder how far back people really remember. I also am thinking the older the resistance/support level, the less significant it is. Do you think I will be ignoring less recent history at my peril? I also find that the more information I bombard myself with the less clarity I have.
Thanks

Answer:
Great question and this really deserves its own blog post so I’m glad you asked. To answer you though, here’s my take on it.

I’ll begin by saying as long as a level is being respected, it’s worth taking note of. That pertains to an individual stock which keeps knocking on the door over the past few weeks, or to an index chart like the NAZ which has just recently pushed through multi-year resistance.

So, they’re worth taking note of. As far as how important they are, let’s consider the psychology at work here, which is what it really comes down to.

Technical levels are representations of buyers and sellers, which often times base their decisions on emotions. The older the level, the less emotional significance I’d attach to it. More recent levels are fresher in terms of emotion, and therefore tend to get respected to a greater degree.

I’d say anything inside 18 months or so is game, whereas I place lower significance on multi-year levels. They may be noticed by technicians, but anyone who has held for 11yrs in the case of the NAZ isn’t likely to bail out now that they’ve finally gotten their money back – I think they’re the “invested” crowd who never truly intends to sell.

What do you guys think? What would you tell this new trader?

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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Jeff White | Comments 7

5 Takeaways from the NYC Traders Expo

February 23, 2012 at 11:35 am

Last night I returned from my trip to the NYC Traders Expo. It was a great experience. Visiting the city itself with some great February weather and seeing all the famous landmarks was nice, but I really enjoyed spending time with some Bandit subscribers and some other trading friends I’ve made over the years from different parts of the country.

In addition, I was fortunate to speak to groups of traders twice while there, which was both challenging and insightful as I prepared ahead of time then fielded some well-thought-out questions from attendees. It was really fun!

There’s an energy when traders collect which is always motivating. From the trading floor I first participated on back in 2000, to times in Chicago seeing everyone file into the CME ahead of the day’s session, there’s just something that happens when traders gather to compete or exchange ideas – I love the atmosphere.

A few thoughts on what I witnessed, in no particular order…

Hunt for the magic bullet. There are a TON of traders who show up just wanting the latest lure to fish with. They aren’t willing to put in the work, to learn to think for themselves, or to understand what it takes to become successful as a trader. They want the overnight shortcut, and they exit the scene just as quickly as they arrive, disappointed and surprised that trading isn’t red and green infomercial-easy.

Trading is a process. I’ve known this, but was reminded of it through my preparations for speaking and in conversations with other traders. Trading requires adaptation, a willingness to lose regularly. Imperfection is to be expected, and so it all becomes about good management of trades rather than finding the can’t-miss sure thing. What works now may not work in a few weeks, so you have to be willing, able, and prepared to shift your approach. The market evolves, and so must you if you want to stay in the game and keep seeing opportunities.

Expectations. Expect some losing trades (and learn to manage them wisely). Expect periods of frustration and confusion, they’re going to happen. Expect the market to surprise you – it’s just that way, so you’ll have to be ready to respond accordingly. Times will come when you have no clue what’s next, but that’s OK. When they arrive, you can accept them and sideline yourself until clarity comes.

Hard work is rewarded. I saw Expo attendees show up early and stay late, attending multiple sessions, taking notes on the good things they heard, and leave tired but hopeful that some fresh perspectives will influence them to improvement in the days ahead. I saw prop traders from SMB who started their day extremely early, made the commute to lower Manhattan, gave it their best all day (though some admitted it was a tough day), then stuck around after the close to listen to my thoughts. Even after I was done presenting, they showed the discipline and desire to improve by asking questions, just absorbing knowledge even though they were tired and hungry and eager to call it a day. Those who work hard – even when it isn’t comfortable – are the ones who will make it, keep improving, and eventually see the fruits of their labor.

Trading is a battle. What’s interesting – and which few stop to recognize – is that only part of the battle is in the market. The rest usually happens internally. So be ready, you’ll need to bring your best if you want to compete in this game. You need to prepare a plan, and think through the emotions you might face while implementing it. Regardless of style, strategy, market, or timeframe, every great trader has his head on straight. Those who don’t will have it beaten to a pulp by a ruthless market.

If you were there, or if these have resonated with you, feel free to share some thoughts of your own.

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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Jeff White | Comments 3

LIVE from the NY Traders Expo

February 19, 2012 at 10:25 am

On Tuesday morning at the NY Traders Expo, I’ll be teaching live at 8am ET. I hope you can make it to my session if you’re anywhere around NYC. If not, be sure to register for the Webcast so you can attend virtually!

Specifically, I’ll be discussing Unique Traits of High-Performance Traders. I have a lot of good stuff planned, plus I’ll share the setups which have been working well for me recently as well as the best setups I see in the market right now. I’m excited about being there and giving you some insights for better trading.