All Entries in the "Trader Development" Category
The Self-Education of a Speculator
March 20, 2012 at 10:28 am
As a full-time trader, I don’t have a typical job. I have a 5-second commute to my home office. I wear t-shirts to work! There is no boss standing over my shoulder, and the actual trading hours require a relatively brief daily commitment (6.5 hours) as compared to other occupations. And I’m thankful for all of it.
The market closes at 3pm for me, offering lots of time to tend to other things – if I so desire. However, my desire is to succeed at trading for the long haul, which means I have lofty goals. In turn, I’m not the type to walk away when the closing bell rings. I work at it every day to improve and educate myself on an ongoing basis. I have to stay sharp.
That means I’m reading books, blogs, spending considerable time working the charts in search of what’s working best right now, and of course reviewing my own trades in order to continue learning.
Because successful trading is so much about finding a style that fits your own personality, it is only fitting to investigate what styles exist. An energetic and impatient person may want to become a scalper, looking to day trade quick moves within a short timeframe. A laid-back trader may prefer a less-intense style like swing trading, taking positions to hold for days or weeks. There are many approaches to the market, and finding your own style can come as a result of identifying with the style of another trader.
Raising Your Awareness
The road to expertise isn’t a short one, particularly in trading. I’ve been at this long enough to be considered an expert, yet there are still plenty of days where I’m reminded that I sure don’t know it all! Trading will humble you like that, but that’s part of it. Regardless, here are some ways for you to get educated as you further not only your knowledge but your trading career in the process.
Books.
I’ve read a couple hundred of them on trading, and while there’s plenty of worthless paper out there, you can still find some great ones with timeless lessons. I think it’s important to continually seek out information, whether it’s new and applicable now or just a lesson to be reminded of (before the market does it for me!). Your self-motivation will help you improve, so dig through the classics for starters. Mark up the margins, underline the parts which resonate with you, and return to them often.
I particularly like the Market Wizards books by Jack Schwager. He profiles traders in all kinds of markets (bonds, equities, options, futures, mutual funds) and of all timeframes. Yet despite their differences, all are highly successful. The interview format he utilizes gets you in the minds of these great traders, offering countless lessons. (I regularly visit TraderInterviews for the exact same reason). Every good trader trades in accordance with their personality, as we all should.
The newest book I would highly suggest is One Good Trade, which is the best trading book I’ve read in a long time. Bella covers it all and overlays his lessons with a variety of trading characters (based on real people), which helps drive the lessons home that trading is all about performance, adaptation, learning, and having the right mentality. Once I started it, I couldn’t set it down, and I’ve re-read it since.
Blogs.
Reading posts like this one can’t help but to expand your knowledge and open your mind up to some new possibilities. There are countless blogs on trading, but there are some good ones. Hunt for those which offer whatever it is you’re lacking….encouragement, psychological lessons, trade reviews, sector snapshots, news on industry developments, interviews, trading videos, etc.
If you’re willing to get honest with yourself and figure out what you’re lacking, you can find some blogs to visit regularly as resources. Just be sure they’re written by traders, honest, and not wasting your time, as there’s no shortage of distractions out there that won’t help you grow at all.
Results.
If you don’t track your own trades, start yesterday! You can record your trading via screen-capture software, but even a journal or simply a grid outlining entries, exits, holding times, patterns, trade context and objectives will shed more light on your trading than you can imagine. As you collect results, start to compile them. I did this for the first few years of my trading, until I really understood what I was doing, and it helped me assess my strengths and weaknesses. Monthly, I’d review my results and calculate statistics which gave me plenty to work on.
You just can’t argue with data! Getting mixed results? It may be time to make an adjustment. Figure out how your wins and losses stack up against each other, as that’s a great starting point. Over time as you endure periods of profits and pain, you have stats to compare against and you can more readily see when something is out of line.
Premium Services.
I’d be leaving a huge part of the mix out if I ignored premium services in the education process. Early on, I subscribed to a number of sites while I figured out my own style. Once I got to the point where I had my own opinion, I knew I had learned enough to need them no more.
Here at TheStockBandit, we offer a nightly stock pick service outlining my own trading plan for tomorrow, which some use to generate trade ideas and others use as a learning tool to see why I plan to take each trade (since each are explained).
We also offer stock trading courses in a video-on-demand format. The trading courses explain everything I know about trading, making them an incredibly valuable resource to return to over and over (depending upon current conditions in the market), helping traders see a huge variety of trade types and which kinds of market conditions are well-suited to those plays.
And while I’m certainly proud of and stand behind what we offer, there are plenty of others to choose from which are produced by legit people with a lot to teach you. If you want to accelerate your learning curve and truly build your skill set, let someone help you who has done it.
You Get What You Give
If trading is your job or a part-time endeavor you’re passionate about, recognize that your level of effort in the growth process is going to be reflected in the results you get. Be willing to apply yourself regularly as you learn more about not only the market, but yourself.
Staying educated and keeping a learning mindset is going to eliminate mistakes as well as some big disadvantages you currently face if you’re halfway new at this. As you make that a habit over time, it’s going to continue to pay off in a number of ways. Become a complete trader and commit to educating yourself. You won’t regret it.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Atlanta Traders…
March 5, 2012 at 12:18 pm
If you’re an Atlanta trader or are located in the surrounding area, make plans this Friday or Saturday to see me present live in conjunction with Worden!
On both Friday & Saturday (Mar. 9 & 10) at the Worden TC2000 workshop, I’ll be teaching live. It’s at the Marriott Perimeter Center (246 Perimeter Center Parkway NE, Atlanta, GA 30346). The workshop starts at 10am and ends at 4pm, and I’d love to see you there either day.
Specifically, I’ll be discussing Finding the Best Charts Now (Friday 2:45 – 4:00 and Saturday 11:15 – 12:30). I’ll show you what’s been working best in the market lately, what looks best going forward (so you’ll leave with some actionable ideas), and we’ll build a watch list together of your stocks and read the charts together.
I have a lot of good stuff planned, plus you’ll see the new version 12 of TC2000. I’m excited about being there and giving you some insights for better trading. Make plans to be there by pre-registering or just show up (it’s free) – but get there early for a good seat!
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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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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Follow @TheStockBandit
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.
Make plans to be there by pre-registering or just show up (it’s free)!
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Get our free newsletter to keep up!
Follow @TheStockBandit
Houston & South Texas Traders…
February 8, 2012 at 10:01 am
If you’re a Houston trader or are located around the South Texas area, make plans this Friday to see me present live in conjunction with Worden!
On both Friday & Saturday (Feb. 10 & 11) at the Worden TC2000 workshop, I’ll be teaching live. It’s at The Woodlands Waterway Marriott (1601 Lake Robbins Drive, The Woodlands, TX 77380). The workshop starts at 10am and ends at 4pm, and I’d love to see you there either day.
Specifically, I’ll be discussing Formulating Your Trading Plan (Friday 1:30 – 2:45) and Locating Trades & Evaluating Risk (Saturday 11:15 – 12:30). I have a lot of good stuff planned, plus you’ll see the new version 12 of TC2000. I’m in the rotation with Michael Thompson and Peter Worden, so I’m excited about being there and giving you some insights for better trading.
Make plans to be there by pre-registering or just show up (it’s free) – but get there early, it’ll be a full house!
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Get our free newsletter to keep up!
Follow @TheStockBandit
Why Anticipatory Trading is so Tricky
February 3, 2012 at 9:25 am
Charts give us the opportunity to wait for confirmation or enter ahead of time – to anticipate. And while the latter may give us more of a feeling of being right, it’s not an easy way to trade.
Here’s an example from this week…
AGP is sitting in a bullish consolidation pattern here within an existing uptrend. This is a quality pattern – but it has yet to confirm. A breakout would happen beyond the upper channel trend line, currently at $70. Check out the setup, then down below let’s discuss trading it.
This is a setup which would have delivered some frustration for those anticipating a breakout – at least for those who entered early. Wednesday saw a move back up toward the upper channel line, suggesting a breakout was perhaps coming soon, only to have a decisive turn lower on Thursday bring it right back into the center of the channel. The stock is again lower this morning.
There’s a huge difference between how pro’s and amateurs make anticipatory trades, let’s see what they are and what those choices lead to.
How Amateur Traders Anticipate
Many amateur traders make anticipatory trades. They receive a tip, or they have a hunch, or they just want to see their predictions proven, and they get in before any bit of a move has started. They load up, then wait to get paid. A failure of the stock to deliver the move results in the max loss possible under this circumstance, all because of how the amateur entered the trade.
How Professional Traders Anticipate
Many professional traders make anticipatory trades as well. Their experience provides them with market feel, and when watching the tape and eyeing the charts, they’ll run across trades they like too – maybe even the exact same setups as the amateur finds. However, their execution methods are worlds apart.
Rather than piling into the trade and sitting back and hoping the market proves them correct, the professional enters a feeler position – a starter. A trade small enough to watch but not big enough to hurt them or really help them. It’s a marker. As the trade begins to prove itself and the pattern starts to confirm, they add to the trade. They build a position as it works, allowing them to get paid nicely when their hunch proves correct. A failure of the stock to deliver the expected move results initially simply leaves them stopping out of their starter position for the bare minimum loss.
See the difference between the two?
There’s a big argument to be made for just waiting for confirmation in a pattern to take place before entering a trade, but anticipatory trading can still produce profits, so long as you’re doing it carefully.
For those of you anticipatory traders, the example above is a great example of how to finesse your entry. Scale in, make the setup confirm before adding, and know you’re covered either way – whether a tiny loss you can easily survive or a winning trade you can build on.
(For more on anticipatory trading, read When to Make Anticipatory Trades.)
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Competition
January 30, 2012 at 9:32 pm
One of the many harsh realities of trading is that it takes a lot of intentional effort.
That means you intentionally prepare (both mentally and with an actual game plan), you intentionally execute (have the discipline to stick with your method), and you intentionally improve (by reviewing results, keeping an open mind, working with other traders to expand your abilities, etc.).
The fact of the matter is that if your competition is outgunning you, the way to start having more success is by outworking them.
When I was in 8th grade, I decided to take up golf. Being in a town with a huge presence of great players (including 8 PGA Tour pro’s), I had an uphill battle given that so many of my peers had already been pursuing the game for a few years. They were better than me, and I knew I had to outwork them in order to catch up to them or surpass them.
The same mindset applies to your trading. If your competition is getting the best of you, then you’ve gotta step up your game and work harder. Don’t be afraid of it, nothing worth doing is ever easy.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
