All Entries Tagged With: "Confidence"
Let Your Trades Go
August 4, 2011 at 7:15 am
Trading on certain timeframes requires that we monitor every tick, gauge the momentum, and continually modify our management of the trade.
For most traders, however, more of a hands-off approach is far better. Whether it’s a job that prevents fixating on the screens, or simply an aversion to that high a level of activity, many traders choose to operate on a timeframe that doesn’t require their nonstop full attention.
When I’m swing trading, there’s a tool I utilize that makes all the difference in the world. It allows me to take a set-it-and-forget-it approach to my trades so I can set them up and let them go. It helps me prevent interfering with my positions so that my original trade plan can fully develop.
Just as you should, I already know from the outset of my trade what I’ll risk if I’m wrong and where I’ll ring the register if my target is reached, so with those pieces of the equation already known, all I need to do is plug them in.
Read this post for an explanation and a video I made explaining how I trade with Peace of Mind.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Elevating Your Odds
August 3, 2011 at 6:05 am
Each of us would say we want every advantage possible in our favor, regardless of the activity. But a closer look at your trades would likely reveal occasions where you didn’t quite wait for all the elements of your trading plan to come together.
Perhaps that’s out of impatience or anxiety, but we’ve all done it and either suffered diminished returns from lowering our standards or we’ve implemented some poor habits which came back to bite us later.
When it comes to daytrading, our greatest odds for success come when we combine multiple favorable conditions before placing trades. That might be locating setups which point to the same outcome on multiple timeframes, or it might be considering the overall market environment and trading in such a way that we’re not fighting that.
Go check out this post from the archives which has both a written explanation & a video showing you what I mean, because the key is to Stack the Odds for Daytrading Success.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Take Time to Rest & Relax
August 1, 2011 at 7:15 am
This week I’m on vacation – and how sweet it is! But I’m still going to deliver some goods for you to read here…every day, actually, so keep coming back.
Today I wanted to discuss the importance of stepping away from the screens from time to time to rest up and recharge. The market will always be there when we return, but if we trade with fatigue of any sort (physical, mental, or emotional), we’ll be far from our best. That brings suffering to both our confidence and emotions – both of which we need in this game.
As you well know, trading is very demanding, so for us to show up each day with our full focus, we have to stay rested and avoid burnout.
I felt this post from the past was particularly pertinent to the current market environment. We’ve seen lots of day-to-day indecision, some sizeable gaps, and some wide-ranging bars in both directions lately. That’s not allowing many stocks to establish quality bases, which means the opportunity that’s out there is rather narrow at the moment. That will at some point change, but for the time being this is a good time to step away and let some of the dust settle.
Check out this post:Â The View From the Hammock for more of my thoughts on R&R.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
The Naked Truth About Your Trading
July 5, 2011 at 1:18 pm
If I asked you how your trading was last week, or actually even if I let you pick any other week of June, what would you tell me? Something along the lines of:
“…well, last week wasn’t really a good week to do that because I had (this or that) going on…”
That would be a typical response, and it’s one I’ve been guilty of answering with in the past. Excuses about your trading only delay the inevitable truth though, so they’re really not worth making. The fact of the matter is that your performance last week is the naked truth about your trading.
Uncomfortable? That’s what you’ll have to face if you want to get better. Your call.
You’re going to have to confront reality, and take a “typical” week and see if the results are anywhere close to what you’re wanting. If they aren’t, then your trading doesn’t look good naked and needs some help!
Your profitability as a trader is the bare naked truth about how you’re doing. Get equipped if you need to in order to improve. Get committed to cutting losses better or planning with greater precision. Get inspired if that’s what you need to move beyond mediocrity. But don’t sit there idle and expect your results to magically change.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Be Imperfect!
June 24, 2011 at 9:43 am
Society trains us to want to be perfect. And in many endeavors, that’s something worth striving for. Surgeons, for example, can put you at ease when they tell you they’ve performed this operation hundreds of times without any problems. Students with perfect grades get academic scholarships, saving boatloads of tuition money. And the list of examples of the benefits of perfection goes on and on.
From our appearance to our performance, someone else will always be a little better, and it causes us to try to perfect whatever it is we’re doing for the sake of improvement (or keeping up). Unfortunately, it carries over into our trading – much to our detriment.
You see, when it comes to trading, there’s no room on the perfection list. And that’s a good thing, because perfection isn’t required for success.
The very worst traders try to be perfect. They either stay sidelined in search of a perfect strategy (backtesting galore), or they practice trade until they make $1M in hopes of duplicating it live, or they simply refuse to lose.
Perfection in trading is paralyzing, both to you and your account. Growth is prevented, confidence suffers, and you feed the very traits you should strive to shun.
I’ve said before that in trading, you succeed by not failing. But that doesn’t mean you can’t have failed trades – quite the contrary. Expect losses! As negative as that might sound, it will mentally prepare you to accept them gracefully and move on to the next trade which might be a far bigger winner).
The best traders are imperfect – by choice. They grow from mistakes, not successes. Lose small and face the music when your current approach isn’t working. That shows true confidence. By definition, imperfection brings opportunities for growth – both in your account (lose small and win bigger) and in your abilities as a trader (learn new methods). But you’ll miss out if you’re not willing to bend.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
YOUR Trading Plan, Part 1
June 13, 2011 at 12:42 pm
You are unique (and you don’t need me to tell you that). The desire to find a trading plan that’s right for YOU is of paramount importance, because we are all a little different.
When it comes to your chosen trading methodology, you need to determine a number of things about yourself before going forward. These are things like your trading timeframe, risk tolerance, directional bias, and desired setups to pursue.
That’s the beauty of trading, you know. The market offers you the ability to custom-design an approach that works for YOU. Ask yourself questions such as…
* Will you be day trading for smaller but more frequent profits, or will you be entering positions for several days or weeks?
* Will you be comfortable keeping tight stops of just a few percent, or are you comfortable allowing more breathing room for trades in order to reach a more distant profit objective?
* Are you comfortable short selling, or do you prefer to only buy stocks?
* Are there specific patterns which you really like to trade or have found success with, such as buying dips within uptrends or perhaps buying breakouts?
These kinds of questions which can only be answered by you, but you MUST determine those answers in order to be effective. Those answers are paramount to your finding the proper strategy for YOU. I cannot emphasize that enough. Otherwise, you’ll be chasing different strategies by the day, but never knowing what’s working best and what to completely avoid. And if you’re dabbling in strategies which don’t suit you, you will not trust them or commit to them.
So when it comes to your trading plan, the more clear you can be on who you are, the more clearly you can define what it is you should be trading – and (equally important) what you should NOT be trading. That last part gets many traders in trouble, they stray into unfamiliar territory and find themselves making poor decisions which prove costly.
Since this is Part 1, there’s obviously more to come. But before the next part arrives, you have some homework to do – answer those questions above. I don’t want to know the answers to them, but you’re going to need them. Otherwise, the info to follow will carry no significance to you, rendering your time (and mine) completely wasted. Don’t be “that guy!”
I’ll see you in Part 2.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
7 Steps to a Trading Breakthrough
June 8, 2011 at 11:00 am
Breakthrough was a TV mini-series which aired last summer, and a good one – at least I thought. It got cancelled after just a couple of episodes, before its time of course! (Archived on Hulu though, in case you want to see it.)
The premise of the show was that ordinary people face real, painful challenges. The subjects on the show wanted help to overcome them or learn to live with those issues. Obstacles stood in the way between them and living the life they’ve dreamed of, so it was inspiring to see them get out of their comfort zone and face them head-on.
Self-help guru Tony Robbins was the coach. Think Biggest Loser, only these people were looking to lose their fixation on their problems, and he was the one to guide them through that process. Along the way, he showed why his reputation is so good through the work he did.
Robbins offered 7 guidelines for “breaking through” and they’re listed in bold below. I’ve added my own thoughts as they pertain to trading, so here we go…
1. Change your environment. If you want to make a change, the best way to start is by getting away from the norm to not only evaluate your current approach, but to design a new one. Mix it up. Get away from your desk, go to the park, take a walk…do anything but stay in front of your screens. Similarly, if you’re not trading well or seeing the market clearly, stop doing the same things! Perhaps it’s a timeframe shift you need to make (day vs. swing), or the places you’re getting ideas. Something in your routine is stale and you need to take a fresh approach.
2. Confront your real issues. It’s SO easy to blame anything and anyone but yourself. But that’s what losers do, and none of us want to be losers. If you’ve got a discipline issue, then get real about it. Grow up. If you’re simply lacking skills, then improve them. But don’t place blame elsewhere (my family distracts me, this market is too erratic, I need that other trading platform, etc.), because that will only perpetuate your dissatisfaction. Be big enough to face up to the underlying problem, and only then will you overcome it.
3. Expand your limits. This is about discovering your inner strength in a new way. It’s about doing, not just telling yourself something. Take on a challenge that has nothing to do with trading. Skydive or climb a mountain or commit to losing 15 pounds or learn to waterski – something that you can do or achieve in a relatively short amount of time order to show yourself that when you put your mind to something, you can make it happen. It’s a step toward confidence, which will carry over into your trading. Doesn’t matter what it is, because your mind is directing each endeavor and you’re redefining what’s possible.
4. Change your perspective. I remember after my first 2 years of trading on my own I walked into a daytrading firm. I saw 2 guys that day (my age) who had made $40,000 for the day. That gave me a whole new perspective, needless to say. Whatever you think you know, you are still oblivious to so much more. Investigate some other avenues for your trading, and it will shift your mindset permanently – and probably for the better.
5. Own the lesson. Many of us pay the tuition, but we don’t always remember the lesson. In the bigger picture for your trading, this step is about taking responsibility in order to create a lasting change. You’re maturing in your approach, so take the parts of the past which can aid you and stamp them on your memory. You won’t be perfect going forward, but you’re now clear on what you need to avoid and that’s something you weren’t doing before step 2. Take the constructive pieces of the past and use them to your benefit.
6. Design a compelling future. Now that you’ve confronted your real issues and shown yourself what’s possible and you’re taking responsibility, it’s time to let go of the parts of your past which are holding you back and start looking forward. The beauty of trading (or one of them at least) is that the sky literally is the limit. Anything is possible, and yet too often we get caught in a rut and forget that. Getting away (step 1) is very helpful in this aspect, as it allows you to remember that you need not limit yourself in what it is you’re after. It doesn’t mean you start trying to hit homeruns instead of singles, but rather that you remember those singles can put you in the hall of fame!
7. Own your breakthrough. Anytime you grow, anytime you overcome an obstacle, anytime you confront what’s holding you back, it’s going to stay with you. Owning your breakthrough is about remembering where you’ve been in your trading, and building on it. You catapult yourself to a new level because of the growth you’ve experienced. Don’t forget where you’ve been, but place your focus on where you’re going. You won’t be free from frustration forever, but you’re on your way to a lasting breakthrough.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
