All Entries Tagged With: "Trader Development"
Hoping to See You in 2012
December 16, 2011 at 9:07 am
This past weekend I had the pleasure of doing some live training in conjunction with Worden, and I thoroughly enjoyed it. Getting to teach a couple hundred traders in a seminar setting was a treat (I’m standing in the front of the room in this pic), and it was fun to cover a lot of ground on all things trading.
We discussed key principles of trade selection, a trader’s mindset, and how to prepare like a professional on a regular basis. Then we built a watch list together with attendees offering up their favorite tickers, spouting them off popcorn-style as I added them to the list. From there, we just analyzed the price action to see what the charts were telling us. When you listen, the charts tend to have a lot to say!
Anyway, I’m slated to teach and/or speak live in several more cities in 2012, and I hope to see you at some point. Houston in Feb, NYC Trader’s Expo in Feb, Atlanta in March, and Denver in June are currently on the calendar. Make plans to attend one of these cities and I will do my best to make it worth your while.
To those who were in Dallas last weekend, I hope you enjoyed it as much as I did!
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Getting Over the Consistency Hump in Trading
December 15, 2011 at 9:03 am
I heard from a trader over the weekend who has gone through a number of changes in recent months, both personally and in their trading. The result was a big lack of consistency in their trading.
This particular trader has endured a stretch of personal changes, including relationship stress, family changes, financial pressures tied to it, and a move. That’s a lot to take!
In terms of their trading, they went from being a retail trader to a prop trader and found some distinct, challenging differences which impacted their results (and trading process) adversely. It wasn’t that prop vs. retail was the issue, but rather this particular trader’s surprise and perhaps their lack of understanding of what those differences would be from the front end.
For example, this particular trader did not realize they would not be allowed to hold overnights at their firm. They got caught up in the ECN rebate game and started focusing on minimizing transaction costs rather than getting into and out of trades in a timely fashion. And there were several other issues they hadn’t fixated on previously (like platform fees). These changes added considerable pressure to the trader.
It left them asking me, how do you gain consistency in trading? They asked me specifically “what got you over the hump to consistent profits in your trading?”
Here was my response…
Sounds like you have been through a ton, and I’m sure you’re drained emotionally as a result. Once the dust settles for you though, your self-honesty will serve you quite well as you get back on a track that’s right for you.
In terms of what I did to achieve consistency, I had been making money part-time before going full-time. When I made the switch from part-time to full-time, there was a period of about 2 months in between where I was assisting another experienced full-time trader by placing orders for him and helping manage his account. This was due to a very different style of trading (managing many positions simultaneously), and it was new software, so I needed to get accustomed to it. Once I was comfortable with it, I went live, and from my first day I was profitable.
A year or two later, I went through a tough stretch and got really frustrated. The way I responded actually led to my longest streak of consecutive profitable months, and it was all due to one single commitment: limit losses. By taking little paper cuts, I got out of bad trades with minor damage but kept finding winners along the way too (it’s a numbers game), and that just created a ton of consistency for me.
I think if you can simplify the effects of what’s taking place personally with you, then your trading will be calmer as well. Life goes on, and periodically it gets hectic in a way that’s not under our control, but if you detect that then just get more passive with your trading. When personal things are clear and you’re more focused on the market, you can get more aggressive with your trading. Becoming consistently profitable goes hand-in-hand with taking a long-haul approach for consistency over time.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Trading Timeframe Influences Position Size
December 13, 2011 at 8:58 pm
Equally important to locating entries and exits is the matter of sizing your positions. Too much and you can’t stick with the trade plan, aborting in favor of diminishing emotions (whether greed or fear). Too little and you don’t maximize the use of your capital.
While some traders prefer a standard lot size, in this video I’ll discuss the notion that your timeframe for the trade should influence your position size.
Yes, the chart itself will help determine your exits, but that’s also a function of how long you’ll expect to be in the trade.
Check out the video for a quick 5-minute explanation and you’ll see exactly what I mean.
(Direct video link is here for those interested in sharing).
Be sure to view in HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
A Trader’s 5-Step Recovery
December 7, 2011 at 9:03 am
re-cov-er-y (noun) – the regaining of something lost or taken away;Â restoration to a former or better condition;Â the extraction of useful substances from waste.
Traders have to go through recovery on almost an ongoing basis. Sometimes it’s from a paper-cut-sized hit to the account, while other times it involves coming back from an amputation of sorts – whether it be a major drawdown to actual or emotional capital.
Either way, without the ability to recover, you’re done. (Obvious alert: that’s no place to be).
There are steps to recovery which should be taken, and I want to discuss some of them. By no means is this an exhaustive list, so please add your own in the comments, but here are a few which I think are necessary on the (sometimes long) road back.
Admit it. Face up to what it is. Call it a slump, call it shattered confidence, call it a big scary market monster. Whatever “it” is, you have to get it on the table so you can deal with it.
Seek help. Maybe you shouldn’t go it alone. Without some accountability, it’s easy to relapse. Find a mentor or some coaching to get you back on track, and add some skills to your repertoire. The fact of the matter is that left to your own abilities as they currently stand, you may very well be facing a similar situation again.
Take inventory. Take an inventory of what’s left of your capital, both in terms of cash and confidence. It may be that you simply don’t have enough left to consider a comeback right away, so perhaps you incubate for awhile and prepare in other ways for your eventual return. Or perhaps you assess your situation and realize you have more than enough to start the process.
Get uncomfortably familiar with the cause. What was it that put you in need of recovery to begin with? Overconfidence? Lack of respect for the market? A series of small mistakes which compounded your problems? Understanding the root cause of your wounds, even if painful, will help you prevent it from happening again in the future. After all, you’ve already paid the tuition, you might as well get the lesson.
Get back in the saddle. The last step in the sequence is to return to trading and begin rebuilding. Start thinking about what that’s going to look like for you and how you’ll avoid the same pitfalls which got you this time around. Visualize yourself back in the routine again, making plays, staying disciplined, and having success.
** What are some steps you think are necessary to begin the healing process following a big trading loss?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
DFW & North Texas Traders…
December 2, 2011 at 9:51 am
If you’re a DFW trader or are located around the North Texas area, make plans next Friday to see me present live in conjunction with Worden in Dallas!
On both Friday & Saturday (Dec. 9 & 10) at the Worden TC2000 workshop, I’ll be presenting in the afternoon. It’s at the Doubletree Hotel Dallas near the Galleria (4099 Valley View Lane
Dallas, TX 75244). The workshop starts at 10am and ends at 4pm, and I’d love to see you there either day.
Specifically, I’ll be discussing Preparing Like a Top Trader in Today’s Market. I have a lot of good stuff planned, plus you’ll see the new version 12 of TC2000.
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
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
Don’t Be a Monkey
November 17, 2011 at 10:20 am
Ever seen those monkey traps where they put some bait in a trap, a monkey comes along, sticks its hand through the hole to get the bait, but when making a fist, can’t remove its hand from the trap?
They have to drop the bait in order to escape the trap, but their greed and ignorance prevents them from letting go?
I’ve made some trades in that same manner, and I’m guessing you have too. The ones where I just refused to let go in time because I wanted it to work so badly, and ultimately they proved extra costly.
Dropping the “bait” in those cases would have freed me to go in search of many other, better opportunities, but my short-sightedness prevented it.
Monkey Brained
And while every single one of us has been there at some point in our trading, what’s curious is that it originates not with the setup or a poor strategy or a flawed technique for entering or exiting. It starts with not having a properly prepared mind.
It’s a flaw with our pattern of thinking.
At times it’s based on a fear of scarcity, whereby we stay with a mediocre or poor trade because there’s nothing else on the radar. In effect, we’re bored, in which case we shouldn’t be trading anyway. Listen to the charts!
Other times it’s that our pride is too much on the line and we’re more interested in defending that than our capital. That prevents us from moving on to a truly worthwhile trade, thus keeping us trapped.
Remember the Goal
I’ve talked at length previously about trading as a numbers game, but it’s such a fundamental viewpoint to have as a trader – something we just can’t lose sight of.
Over time, we want lots of at-bats to let our edge play out. When sifting through setups we select actual trades based on probabilities. That’s the aim.
And on any given trade, if we’re keeping that in mind, we’re willing to let go when the feedback we’re getting doesn’t support our original expectation for the play. The price action is weak, a key level fails to hold, or a reversal of direction has begun and the charts are telling you to shut it down – yet you aren’t listening.
Stay on track. Keep the bigger picture in mind. Be willing to lose in this one trade if you need to, so that over the next dozen or hundred or thousand trades you can be profitable.
… In other words, Trade Like A Bandit – not a monkey!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
4 Traits of the Perfect Trader
November 3, 2011 at 9:48 am
Maybe ‘perfect’ isn’t the right word. We can strive for it, but we’ll all fall short of it given enough time. Greatness, though…that’s attainable. But what does it take to become a great trader?
Well, I’m still working toward it myself, and maybe you are too, but we can agree it’s a combination of things. It’s having the ability to walk the line between two sometimes contradicting attitudes or beliefs. Here are a few of those, and I’d love to hear your thoughts on it if you have others to add to the list.
Great traders blend:
A ‘Just Go With It’ Attitude with a ‘Question Everything’ Mindset. What do I mean by that? Well, traders can be a skeptical bunch, but the best traders still act on what they see. A market move might be difficult to trust, but it’s underway and it’s happening with or without you. Traders know they can exit right away if it doesn’t work out, because after all, isn’t that why we trade rather than invest? I recently saw a comment regarding a “real bull market” by a self-proclaimed trader. I find it silly that a trader actually cares. Real traders don’t mind if the moves last or not, they just go with it and adapt along the way.
Flexibility with Structure. Great traders have a game plan in place, which gives them structure or a framework of rules to guide them in the right direction and help them avoid trouble. But they’re also very flexible in how they implement their game plan. They may not deviate from their discipline, but they can shift gears quickly when conditions call for a momentum-based tape or some fade trades when prices are range-bound.
Confidence with Respect for the Market. This is a tough one and in my experience, never completely mastered. Great traders understand risk, and they know the market can take their hard-won capital quickly if they don’t defer to the price action when their timing is off. However, they aren’t afraid to participate, so when they see what they like, they execute with confidence. This might be among the hardest things to get a grip on for a developing trader.
Science with Art. Trading is definitely a science to some (quants, that’s you!), and it’s an art form to others (tape readers, holla!). Some traders develop their own discretionary system whereby they know exactly what they’re looking for but weigh a number of factors before executing. That might mean taking into consideration if the market’s fast or slow, or if there’s a trend or indecision, or how a run ahead of scheduled news might prompt a reversal. Great traders develop a feel (art) through their experience, helping them identify better when to implement the proper strategy (science).
Where do you fit into the mix? Are you out of balance in one or more of these areas? What can you start improving on today?
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
