Trading Success Through Journaling: Reflect, Learn & GrowHello traders, today we will talk about how journaling can be a really helpful tool for you in your trading journey. Journaling is a simple yet powerful tool that can help you gain insight into your mental and emotional state, identify patterns and triggers, and make more informed decisions. In this post, we'll explore how you can use journaling to improve your trading performance.
1. Reflect on your emotions: After each trade, take a moment to journal about your emotions during and after the trade. This can help you identify patterns in your emotional responses and provide insight into how certain emotions may affect your trading decisions.
2. Identify triggers: By journaling about specific events that preceded a trade, you can identify the triggers that lead to your emotional responses. This can help you take steps to manage your emotions before they affect your trading decisions.
3. Evaluate your decision-making: After each trade, take a moment to journal about the decision-making process you used. This can help you identify any biases or patterns in your decision-making that may be affecting your trading results.
4. Set goals and track progress: Use journaling to set goals for your trading and track your progress over time. This can help you stay motivated and focused on your long-term goals.
5. Increase self-awareness: Journaling can help you become more self-aware of your thoughts, feelings, and behaviors. This can help you identify any negative thought patterns and work to change them, which can lead to improved trading performance.
To make the most of journaling, you should be honest with yourself and write down what you truly feel and think. Journaling is a powerful tool for reflection, learning and making adjustments for the future.
It's important to note that journaling is not a standalone strategy, but rather it's a tool that can be used in conjunction with other analysis and indicators to inform trading decisions. Also, you don't need any specific equipment, just a pen and a notebook, and you can journal at any time.
In conclusion, journaling can be a powerful tool for traders looking to improve their performance and manage stress. By gaining insight into their mental and emotional state, traders can make more informed decisions and improve their overall trading results. Give it a try and see how it can help you in your trading journey.
I would love to hear about your own experiences with journaling in trading. Please feel free to share your thoughts, feedback, and tips in the comments section below. Your input and feedback is valuable to me and to the trading community!
Emotions
How not to miss an opportunity. I found out about Bitcoin many years ago when it was in prime time only to be associated with organized crime , scams, and money laundering. And that remained deep in my mind.
Since jail seemed a bad idea, I convinced myself that crypto it’s not for me.
As time went by, I didn’t see the good fortune because my mind was still relating Bitcoin to a dark area . Something kept me from buying and I didn’t know what.
As I was on the dark side, I am now thinking that the ones who listened to another side of the story, the winning side, greatly benefit from it.
Later I found out that psychologists have a name for my burden and it’s called Anchoring bias . It is described that first introduced knowledge on a subject has a great impact on our later decisions .
The first details I come upon Bitcoin unconsciously affected my judgment and kept me in a do not act state of mind and made me miss my chance.
That’s when I found some ways to improve my decision-making process and to look at data from another perspective , which I am going to share with you.
But first, let’s take a glimpse at anchoring bias, an error of our mind present in many aspects of our lives, which usually works against us.
Picture yourself in a shop on Black Friday. Would you buy an item for 150$ and how would that make you feel if you knew that it was discounted from 200$?
We tend to look at the price of 200$ as an anchor that quickly drives our behavior to a decision to act. Similar to adjustment bias, comparing the 200$ item now seems like a bargain.
The same thing happens in trading. How do we know whether a stock is overpriced or not? By comparing it with past quotations that act as an anchor.
Is BTC overpriced at 20k? We all would agree that in 2017 it was, but how about now?
These anchors make us act unwisely and take unconscious decisions with small returns. This could lead to unsatisfying results, frustration, or wipe our account over the long run.
Once you get better at identifying the anchoring bias, you can use it to your advantage. Think about what makes good and strong support & resistance. The perception is that a large number of investors credit that bid as a fair value for them.
So what should we do? T o have a better understanding of what drives our choice it’s important to double-check our mindset, emotions, and the data that we encounter.
Does it help us or it could be a potentially harmful anchor? What is the context of the news? In the example above, could we consider solely that 150$ is a fair price, without the 200$ price before the discount?
Also, if you have a strong assumption about a subject, try to look at other points of view, not to change your mind but just to reinforce the reasons you already have.
Remember that the first step into overcoming a bias is to be aware of its presence and next just look inside you to find proof that drives your decisions.
So, let’s recap
Find context - Figure out if the price you set for your buy order is a fair one or if you find it good compared to the day before.
Find anchor - Do I want to invest in this company I have never heard of before just because my cousin thought it was a good idea?
Observe - Do I have doubts about this buy? Do I follow my plan or I am unconsciously driven to make this purchase
Review - Have I looked at other oppions?
THE MOST USEFUL TRADING SITES ...and how to utilize themIn this post, I will share the some of the most useful trading sites that are available to you and how you are able to utilize them to your advantage whether it's for fundamentals, charting, analysis, performance tracking, news events or just to follow your favorite professionals and their ideas & education that they share publicly.
First and foremost, if you haven't made this your PRIMARY trading platform, I want to encourage you to use and SUBSCRIBE to TRADINGVIEW
As we all evolve as traders, I'm sure we can all relate to one thing in common which is hard work and dedication. Trading is one of the hardest professions out there and without hard work, practice and dedication, we know that 90% of traders fail to make it in this industry. TRADINGVIEW gives you all the resources you need to be able to become one of the 10% as it enables you to become a content creator, it gives you a community to research ideas, you're able to watch livestreams, catch news flows, back test & analyze your own strategies and most importantly of all, you have direct support team to help guide you by sharing their own personal trading experiences, publicly as well as privately. Whether your choice of market is Forex, Stocks, Crypto, Bonds, Futures, Commodities or Yields, TRADINGVIEW has all the tools to be able get you well on your journey to become a professional trader.
See Figure 1: Subscriptions
WWW.MYFXBOOK.COM
MYFXBOOK has a variety of different tools to use ranging anywhere from position size calculators, COT data (Commitment of traders), Broker spreads/quotes/volumes, news flows, correlations and most importantly, account linked performance analysis. You may be a full time trader or a part time trader with a 9-5 job, either way analyzing your entries, exits, RR ratio, drawdowns etc. are necessary to find what works and what doesn't. Trading is about probabilities and if you're not making money in 25 trades, you need to reanalyze and change your approach. Myfxbook.com allows you to link your trading platform to breakdown your performance, ultimately being your own coach to find the approach that suits you the best.
See Figure 2: Performance Stats
WWW.TRADINGECONOMICS.COM
As many different crises happen throughout the world (especially the most recent ones within the last few years), understanding how the Federal Reserve operates to manage monetary policy is key to get an edge in your positions in the forex market. TRADINGECONOMICS gives you all the accurate information needed to be able to forecast and research throughout 196 countries like, economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices. Micro and Macro economics are a big part of how this world operates and having access to all the most important information that drives the Feds decisions due to the economy being split between these two realms are valuable as they could be bridged together for more accurate forecasting.
See Figure 3: Inflation Rates/GDP Growth (By Country)
WWW.FOREXLIVE.COM
FOREXLIVE has many different helpful resources to keep you up to date in the market no matter what time zone or trading session you take part in. As our lives are busy with family, day jobs, business endeavors or simply being in different time zones, you may not be able to watch all sessions play out and in fact, taking a break from the screen is healthy for your mind and emotions. The great thing about FOREXLIVE is that you are able to read Session Wraps to keep you up to date with a summary after each session (Asian, European, U.S) completes. Psychology is a big part of why a trader either succeeds or fails which balancing your time on and off the markets are important to detach your emotions from your positions. Set a plan for how many times you will scan the charts a day and fill that in between time with activities like exercising, reading, chores, spending time with your family, going for a walk and much more.
See Figure 4: Session Wraps
WWW.INVESTOPEDIA.COM
INVESTOPEDIA was founded in 1999 headquartered in the heart of New York city U.S. This website provides comparisons of financial products, reviews, ratings, comparisons of different financial products and most importantly, it is a financial dictionary. With the broad range of information provided, it gives readers the confidence to manage every aspect of their financial life. Whether you're learning about money and investing for the first time or are looking to improve your knowledge and skills, anyone from an experienced investor, a business owner, a professional, an advisor, INVESTOPEDIA has all the information to build your skills.
See Figure 5: 4 Basic Things to Know About Bonds/Key Takeaways
WWW.INVESTING.COM
INVESTING.COM is a well known site that offers real-time market quotes, information about stocks, futures, options, analysis, commodities and most importantly an economic calendar. Keeping an eye out for the high impact news events will help you adapt and control the volatility during those peak hours. Another helpful aspect of this site is knowing what will drive the market mood for each upcoming week. The top 5 most important fundamental areas to watch for are explained and broken down to help your forecast and analysis so you can prepare your trade setups accordingly. Applying fundamental analysis along with technical analysis will help you become a better trader as when the high impact news events hit, markets get volatile which could cause a running profit turn into an absolute loss. Knowing when to be in or out of the market is valuable so you don't go into a draw down phase.
See Figure 6: Economic Calendar
As I only have mentioned a small number of sites that you are able to access, we all know there are so many other ones available out there, paid and free.
Researching and spending the time to read to broaden your knowledge in the financial world will only help you grow as a trader and essentially improve your trading results.
Check out some more free sites:
www.fxstreet.com
www.dailyfx.com
www.forexfactory.com
www.babypips.com
Please share the site that most helps you in by leaving it in the comment section. I would love to see the variety of ones available.
** If you felt this was helpful in anyway, please support by hitting the LIKE button and FOLLOW me for more educational and analysis ideas **
I appreciate all the feedback!
Thanks
Trade Safe
Why is so hard to exit a losing trade?Think about a trading situation where you find yourself in a losing position without a stop loss.
You have the option to take a certain loss or just continue to see what happens.
Exiting the trade could help you minimize your loss, but why do you delay to make a move?
Psychologists explained that we favor to believe that actions can do more harm than inactions, even though the result could be similar or painfully.
So, in a trading instance we feel that our action – to exit a losing trade immediately – could have a bad outcome than our inaction. This mind flaw was named as the omission bias.
We fail to step in because our misunderstanding of our feelings about the future outcomes.
So next time when you have a trade going against you, think about what consequence inaction could have to your portfolio.
How to achieve profits by managing emotions?Market fluctuations are often a direct reflection of the emotions of market participants. Managing and controlling emotions is essential for successful trading. If you cannot control your emotions, you will suffer from impulsive emotional behavior and make bad decisions, which will harm your trading performance.
Negative emotions such as fear, hatred, anger, greed, jealousy, pessimism, and despair can lead to negative consequences for traders. Traders who have negative emotions may lack the ability to leave positions, refuse to accept reality, and blame others, resulting in selling positions only after a long period of price declines, missing the best buying points, and selling too early.
Negative traders may also regard failure as a negative, significant, and final result, attributing losses to their own shortcomings or negligence.
Everyone experiences various emotions, but people with high emotional intelligence can better manage their negative emotions and vent them appropriately. Emotional control skills can be developed through practice, but it is important to note that this process is a long-term and systematic one. Traders must be psychologically prepared for this.
Therefore, no matter what happens, you must control your impulsive emotions. Take a deep breath for 10 seconds, then choose the best course of action. This often leads to more rational and correct decisions.
Do not make decisions when impulsive, and do not make promises when excited. By managing your emotions, you gain control over your life.
There are various emotions in life, and you must learn to manage and control them. Do not be a slave to your emotions. Manage your negative emotions and cleverly transfer them . Similarly, controlling emotions in life determines emotional control in trading.
The three stages of emotional failure leading to trading losses are: 1) being careless before unexpected events occur; 2) being panicked after unexpected events occur; 3) being eager to make up losses after suffering losses. The solutions are as follows:
Always respect the market and trade with caution. Approach the market with a trembling, cautious attitude.
Once you suffer losses, do not panic. Stop trading temporarily, find the cause, identify the problems, and improve your system.
Impatience is the biggest reason for traders' losses. Heavy positions are impatience, opening and closing positions without signals is impatience, frequent trading is impatience, adding positions is impatience, which is essentially greed, wanting to make money quickly. Be patient, make calm decisions, and the market will reward you.
7 Reasons why Elite Traders Crush the CompetitionHello TradingView world,
I have been trading for almost 15 years and have learned some serious lessons about trading and the markets. I have also been fortunate enough to interact with many great traders over that time that have helped me tremendously, however I still struggled for a long while and wondered why I wasn’t making the progress I desperately wanted to make.
I thought just like everyone else, that if I found the perfect trading strategy, all of my problems would vanish and profits would rain down from the sky like salt bae letting salt drip down off his forearm.
Well guess what happened? I ACTUALLY DID FIND IT.
In fact, my analysis in the market was so damn good that in 2013 I was invited to speak on a worldwide webinar hosted by Daily-FX which was then owned by FXCM.
I’d have a 50 pip stop with a 500+ pip price target and I was nailing the trades left and right, so this was the reason I was invited on. I was working at the Federal Reserve Bank of New York during this time and I ended up leaving that job to trade full time that same year.
Things went smoothly for a while. I partied… A LOT. Did all kinds of reckless and stupid things with my time and money and I ultimately lost it all by 2015. I pondered for a long time about what happened and once I removed my ego and stubbornness, I figured out that what makes a trader great has nothing to do with the outside and has everything to do with the inside.
This is the TRUE secret of trading success. It’s all about YOU and how YOU approach trading. There is so much more to the story but without further hesitation, based on what I have learned from other great traders and have personally learned through brutal hard lessons, this is why Elite traders crush everyone else in the market and if you begin employing these lessons in your own trading, I can guarantee that you will see a dramatic change in your results.
#1 - ELITE TRADERS ARE LEAGUES ABOVE YOU IN PATIENCE
Everyone gets into trading for one thing and one thing only; to make money and to make as much of it as possible. One thing that the majority of traders do is that they also want to do it in the FASTEST way possible. This is where they screw up but is it any surprise that this is the case? I mean look all around you in terms of social media (Facebook, Instagram, YouTube, etc.) it’s all over the place with people touting “Watch me turn $1,000 into $10,000 in just a few days!” … This gets views, it gets attention and it encourages other traders to continuously take on massive risks in order to achieve this.
Is it possible to do? YES, because many traders (Including myself) have done it but what does it also do? It creates detrimental habits that keep you in this mindset of turning a small account into a large account quickly and then that one day comes when you take on massive risk on a trade that looks “good” but ends up going violently against you for a huge loss or COMPLETE destruction of your account.
Another factor is that the majority of traders want to be in the market ALL of the time. They can’t resist staying out and staying flat during times of uncertainty or when the charts aren’t clear enough to validate putting their capital at risk. Elite traders can wait hours, days and even WEEKS before putting on another trade because they understand, their trading opportunity is not yet clear and they rather wait as long as possible in order to enter the market at the most optimal time and conditions.
Think about it; do you want to be in the market on a consistent basis? Are you able to wait a few days or a few weeks before putting on a new trade? It’s a very difficult thing for many traders to do while Elite traders have mastered the game of patience to their advantage. It’s not a matter of how long is the next trade going to take to develop? Rather, I’ll take the next trade when the optimal conditions are met regardless of how long it takes.
#2 - ELITE TRADERS KNOW THEIR OWN WEAKNESSES
Everyone has weaknesses whether we like to admit it or not. Some traders are severely impatient, some have a problem with risk management, some have a problem with making impulsive trades and become reckless, some have a problem with over analyzing their charts or trying to look at multiple markets at the same time, etc. Most traders either try to suppress them or choose to ignore them completely and this causes many to struggle and stay frustrated.
Have you ever thought to yourself, “Shit, why did I do that!?” or “Why did I get out when I should have stayed in” or “Why did I chase it! I knew I should have stayed out” … There is a weakness there that you have not learned to master or work on improving it. Even if you finally acknowledge it and try to write it down or post it on your wall by your trading desk… You STILL end up making that mistake and frustration takes over.
Elite traders through trial and error have learned to master their INTERNAL trading character. They know what triggers them and have found a way to stop it in its tracks so that mistakes are kept under control. They also understand that when these weaknesses start to creep up on them, they can identify WHY it’s happening and talk themselves out of it.
For example, if the market is rising and it looks like it’s going to get away from them, they understand that by chasing after it, the market could turn around and leave them with an unnecessary loss or trap them in a position that they should have not gotten into in the first place. Their attitude is “The market did not give me the optimal trading opportunity that I wanted therefore I will wait. Let the market do whatever it’s going to do, I don’t care. I only care about my optimal trading opportunities” This tie’s in with reason #1 (Patience). They will not let ANYTHING force them into trades they shouldn’t be in.
#3 - ELITE TRADERS FOCUS ON ONE MARKET/PAIR/SECTOR
This is not only true of trading but life in general, focusing on one thing and mastering that one thing to become great at it. There are a multitude of instruments and markets to trade and it gives us traders the freedom to choose where we’d like to put our capital to work but as many of us know, too much choice can actually be a bad thing. When it comes to the Forex market, we have many pairs we can work with and that can actually be a problem.
Everyone has a watch-list of pairs that they want to trade but is that causing you more trading struggles for you or keeping you confused? Whether the answer is yes or no, why are you doing that? And the answer is most likely because you believe it presents more trading opportunities but that is not always the right way to go about things. Each pair moves and reacts differently during certain market conditions and what works well on the EUR/USD may not work on the GBP/JPY. While the EUR/USD moves at a more stable pace and a big day would be considered a 1% move, the GBP/JPY can become wildly explosive and relentless when it comes to market volatility.
Elite traders know this and they stick to ONE thing and become a master at it. I personally stick to the EUR/USD and that is MORE than enough to make profitable trades on. Elite traders do not divert to other markets or other pairs to try and make more profits but they lock down and focus on that one pair and crush it. It’s not common for the majority of traders to do this because they feel that they will be missing out on other trading opportunities but are they really? Or are they just finding multiple ways to take losses?
In order to trade this way, it would require the ability to stay incredibly patient but it would allow for you to stay away from multiple charts and remain disciplined while not putting your capital at risk and avoiding impulse/emotional trades.
This is not common but then again… this is why Elite traders do it and the majority does not.
#4 - ELITE TRADERS PREFER A LONGER TERM OUTLOOK
Just look at the screenshots of charts scattered on trading forums, social media or any other discussion outlet, more times than not everyone’s looking at the 1 Minute all through the 4 Hour time frames. You’ll find a few daily charts here and there and even less Weekly+ charts. Most traders want to be in the market every day and this is why Day trading is so enticing, it gives them a reason to log in, open up their charts and look for trading opportunities to make money. That’s a Mistake.
You’re probably noticing that the previous 3 reasons tie into this reason and that’s because this is just another manifestation of lack of patience or inability to focus on one thing. Short term charts give the impression that there will be more moves to get in and out and not staying in a position overnight. Yes, I get that some traders out there prefer to just get into the market and then be done with it at the end of the day but more times than not, you’ll end up making impulsive trades that creates a string of losses if you don’t have your emotions in check.
Elite traders like to look at the “whole picture” and prefer looking at the daily charts and up. Since longer time frames take time to develop, this is perfectly fine for them as it gives them more time to prepare for the upcoming trade and analyze the levels, they want to take a position and take profit. Once they enter a position, they set their stop and let the market work for them.
They don’t need to check their positions multiple times per day since they know the market will take its time doing what it’s going to do and therefore have time for other activities in their lives or businesses.
#5 - ELITE TRADERS VIEW TRADING FROM A BUSINESS PERSPECTIVE
“How much can I make per day”, “How much can I make per week” or “How much can I make per month” … This is what you’ll usually hear from the majority of traders but how many times have you heard “We’ll see how performance looks at the end of the Quarter”? I’m willing to bet, not many. There is a lot of hype about how much can be made in one day or week but trading is not about just one day, one week or one month, it’s about the long game and how results look over time.
Some Elite traders even go as far as looking at profit-loss on a yearly basis but because market conditions change throughout the year, reviewing how performance looks like at the end of the quarter is preferable. There is no rush to try to make a gain at the end of the day, week or month. Spacing out P/L review allows opportunities to both develop and play out especially if the market is trending.
Elite traders don’t mess around in the market either, this is not a game or hobby for them while many amateurs in the market don’t take it as seriously as you would think. They know that the market is a battlefield and the other side of the trade won’t hesitate for a Nano-second to take their money. They understand that trading should be treated with the same care as running a business and properly deploying their capital out into the market is essential in bringing back even more capital for future trading opportunities that yield larger profits.
Although trading is now offered to the masses and anyone can pretty much open a brokerage account and begin to trade, there are millions of traders that are misinformed and approach the market incorrectly and unprofessionally. “But, I’m not looking to trade professionally, I just want to trade casually” sure, that is completely fine however guess who’s going to eat you alive in the markets? That’s right, the Elite traders who do take things seriously and professionally.
#6 - ELITE TRADERS PROTECT THEIR CAPITAL AT ALL TIMES
In the boxing world, what is one of the warnings referees issue to the fighter’s right before the fight begins? “Keep your hands up and Protect yourself at all times!” and for good reason, right? So that they do not put their hands down and get a crushing hard punch to the head that knocks them out cold. It doesn’t matter how well you trained or for how long you’ve trained because one lazy mistake can cost you the fight, in some cases brutally.
If you’ve been in the trading scene for any length of time, you have read or heard it countless times “manage your risk, manage your risk, manage your risk!” but how many traders ACTUALLY do it? You’d be surprised at how many do not do it at all because it’s painful to do. Painful? How so?... Well, it requires one to make small gains over time instead of putting the pedal to the metal and use high leverage on one single trade. That’s very difficult for the majority of traders to do because that means no “Account Flips” or trying to hit a homerun trade every single time and let’s face it, everyone is trying to get “rich” quickly.
Elite traders know that just one mistake of not practicing sound money management by either not using a stop loss or using too much leverage can be extremely dangerous to their account and they know that it’s just not worth it. On another note, they understand that following risk control is instilling good and strong habits for their subconscious mind and it will carry along for the rest of their careers if they just stick to that simple principle.
If there’s one major reason the majority of traders fail while a small percentage of traders make money consistently, it’s a lack of risk management and account/capital protection.
Before you step into the unforgiving arena (Forex) be sure to protect your account at ALL times! Keep your "Guard" up and play defense!
#7 - ELITE TRADERS AVOID DISTRACTIONS AND NOISE
This is a pretty interesting and controversial one. It can be difficult to ignore the distractions and noise because us traders want to be part of a group or community so that we can share ideas and forecasts along with everyone else but sometimes, you’ve got to be careful with this. You may have an idea or outlook that goes against what others think is going to happen and it could get you off track. You may have experienced this a few times where you believe the market is going to go in one direction and others share the complete opposite view which then causes you to doubt your analysis. You end up cutting the position too early for fear of being wrong and ultimately the market goes in the direction you thought it would and you’re left frustrated.
Distractions can also come in the form of upcoming economic data such as the Federal Reserve coming out with Interest Rates or its chairman Jerome Powell talking about certain economic projections. Volatility spikes up and it sucks you into the hype but if you have a sound trading strategy and rules, you may have noticed that even during high volatility, the market still respects order on the charts. It just moves as a faster pace.
I have personally experienced this through my years of trading, in fact a recent memory comes to mind in 2020. I was invited by an online friend to a private Meta trading group and I wanted to offer some help and insight into what I knew, so I shared a screenshot of my outlook of the EUR/USD going forward.
It was a powerful chart pattern I had seen countless times on the weekly chart and the EUR/USD was trading around 1.0850. Once I shared my screenshot calling for the Euro to make a strong 1000+ pip move and trend towards 1.2000 to 1.2200, some other group member immediately called my analysis a joke and that chart patterns were garbage and useless.
I was going to retaliate back but I thought to myself, this is childish, unprofessional and really unproductive, so I immediately left that group. My friend apologized and said the other guy had a chip on his shoulder because he was former banker for a massive global investment bank (I won’t say which one but I can guarantee you, everyone knows it). I appreciated the apology and left it at that. I the end, all that mattered to me was that as the months went by, the EUR/USD did in fact trend towards the exact projected price levels. That was a lesson for me to avoid detrimental opinions from others.
Elite traders know about this type of noise and are sure to remove any of that from their trading. This is why many stay “undercover” and you don’t really hear about them. They stay under the radar and just do what they do and do it well.
The overall lesson here is that a community should be about helping others and uplifting them, even when they’re wrong. No matter how great a trader is, he/she still deals with losses and nobody is ever correct 100% of the time. Trading is already difficult, so by encouraging and helping others become better at trading the markets, everyone improves as a whole.
Conclusion
There you have it, just some of the basics of what Elite traders do and what has transformed my own trading results tremendously. We all know that there are a variety of ways to approach the market but if there is one takeaway from all of this is that, Top Level traders have learned to master themselves and how they mentally approach trading. It’s actually quite simple and straight forward however it can be hard to implement in real time but that doesn’t mean that it cannot be done and transform your own trading. I wish you the best in your trading journey. I personally know it can be VERY tough but it's well worth it. Keep at it and never give up.
How to Create a Trading Plan for Trading Success! Hey Traders so I figured because it's a new year why not start the year off right by setting us up for success. Having a trade journal or Trading Business Plan may be one of the most overlooked aspects of trading. However in my opinion it will separate those who are successful from those who are not. Trading is a game of probabilities and odds. Mistakes made are sometimes be very costly. Sticking to your trading plan along with money mangagement will allow us to survive the storm that we may face in the event of a drawdown. Also when we are up and riding the wave it will keep us from letting Fear, Greed and Hope getting in the way of profits.
Enjoy,
Trade Well
Clifford
Trade with Confidence: 5 Day Trading Psychology Rules to Embrace Set clear goals and limits:
Before you begin trading, it's important to have a clear idea of what you hope to accomplish and how much risk you are willing to take on. This will help you make informed decisions and avoid making impulsive trades based on emotions.
Control your emotions:
Day trading can be stressful, and it's easy to let emotions like fear or greed influence your decisions. It's important to stay level-headed and stick to your pre-determined trading plan, rather than getting caught up in the heat of the moment.
Use stop-loss orders:
A stop-loss order is a type of order that closes a trade automatically once it reaches a certain price. This can help you minimize losses if the market moves against you.
Diversify your portfolio:
Diversification is a risk management strategy that involves spreading your investments across a variety of asset classes. This can help you manage risk and potentially earn higher returns over the long term.
Continuously educate yourself:
The world of day trading is constantly evolving, so it's important to stay up-to-date on the latest trends and techniques. This can help you make informed decisions and improve your chances of success.
#DXY Emotion Zones 😁😐😡😥This chart lays out the different potential pivot areas for a bounce in the #DXY. Each pivot zone could be correlated with an emotional level of the market. We can see that the DXY has not yet reached the 0.618 Fibonacci retracement level. This obviously does not have to happen, however this could potentially outline that we are currently coming out of the anger phase of the market and will move now into the depression phase of the market. If markets do better than, then I could see us moving down to the second pivot zone (The "Meh" Zone) which would move the market into a boring sideways sort of phase. Then, hopefully, a break of trend moving the DXY down to below the 0.236 Fib level (The "Happy" Zone), which may bring us into the beginning of new bull market. Then, a move below the last swing low could correlate with a new high in most equity markets.
**This is my opinion based off of chart data. This is not financial advice.**
🖐 5 Rules For Successful Trading!Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
Trading is simple, but not easy. Traders have difficulty succeeding simply because they are unable to follow clear rules over extended periods of time.
So what are the rules that every trader should follow?
💸 1- Only invest what you Can Afford to Lose.
Only invest money you can afford to lose, never ever borrow money or take a loan from the bank to invest. Because if you do, you will get emotional and make irrational mistakes.
⚔️ 2- 1% Risk per Trade.
We only risk a small portion of our account per trade. We enter with 1% risk per trade (2% max). We enter with a fixed risk per trade, not with a fixed stop loss in pips, nor with a fixed lot size.
Remember: All Trades Have To Have The Same Weight / Effect On Our Account!
📉 3- Three Confluences Trades. (Technical Edge)
Trading is nothing but a game probability. Moreover, we consider ourselves risk managers not only traders, as the only thing we have control over is "risk". The market can go anywhere.
To be on the winning side, we need to have an edge over the market.
One way to put the odds in our favor is by only entering trades when we have at least three confluences/clues, three things telling us to buy or sell lined-up together. One confluence may be random.
For example: Only enter when you have a pattern, support, and divergence. And your rules have to be objective following a well-defined / back-tested trading plan.
📕 4- Positive RRR - Risk Reward Ratio. (Risk Management Edge)
Our second edge is going to be through risk and money management by entering with a positive risk-reward ratio. That’s exactly why we enter with a ½ RRR (or higher), which means we always target at least double our stop loss. This way even with a 50% win rate, we are still profitable.
Remember: It is not about how many trades you win, what matters is how much you win when you are right, and how much you lose when you are wrong.
🧘♂️ 5- Emotional stability.
In the trading world, emotions are considered the enemy of traders. Knowing how to control emotions while trading can prove to be the difference between success and failure. When getting into a bad trade, the trader who can manage his psychology well will be able to minimize risk, while the trader who is emotional may make the situation worse.
Remember: You Are Getting Paid; To Wait!
Moreover, if you are not feeling well, don't trade.
Remember: You don't have to catch every trade, and you don't have to trade every week.
In fact, our 5 rules are all connected in a way or another.
If you invest money you can’t afford to lose or enter with 10% risk per trade, chances are that you will get emotional and not follow your trading plan objectively by closing your trades before reaching 2R or even entering trades that are not according to your strategy.
In parallel, even if you invest money you can afford to lose and risk 1% per trade, you won’t be consistently profitable if you don’t have a well-defined strategy that gives you an edge over the market technically or through risk management.
In brief, stay away from trading if you don’t have these 5 rules.
Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
HOW TO MANAGE YOUR EMOTIONSHello everyone! One of the most important , and in the same time, one of the hardest aspects of trading is the ability to manage correctly your emotions and leave them aside while trading. So how can we manage our emotions in stressful situations? Here are some tips that every trader should consider when starting trading:
1. DO NOT ACT ON ANGER: every time you feel strong emotions, hold back and revisit your trading plan, is your move aligned with your initial plan or are you acting on irrational emotions? One of the worst things is to take a position based on anger after a loss in order to recover the losses. Take a deep breath and rethink your decision!
2. DO NOT FALL IN LOVE WITH YOUR POSITIONS: we all want to always be right, but sometimes we have to accept a bad position and close it. It is common to fall in love with our positions and hold it out of hope that the market will switch, but involving emotions just blow the account, stick to your plan!
3. ESTABLISH SOME TRADING RULES AND KEEP A TRADING JOURNAL: setting your own rules of trading and risk management is crucial for a profitable account. No matter what you hear from others and how good a position may look, if it is not aligned with your rules, do not take it! Moreover, do not change a strategy after some losses, stick to what you have learnt and planned, keep the information in a trading journal and plan your next moves based on you learnt from it.
4. TAKE A BREAK AFTER 3 LOSSES IN A ROW: it is natural to have a bad day, but when this happen do not become over emotional and over trade, but rather take a break and wait for a new and fresh trading day. Strong emotions will ruin any important decision, no matter the context, so try to avoid them.
5. SET TP AND SL AND TRUST YOUR JUDGEMENT: after establishing your trading plan and risk management plan, in order to stick to your risk to reward strategy, you have to use Take Profit and Stop Loss orders, and trust your judgment and the market. No matter what happens, this helps you have a clear forecast of your account, without blowing it. Also, avoid getting greedy and secure your profits with take profit order.
6. LOWER THE TRADE SIZE: if you feel overwhelmed by the risk on each trade, and out of fear you make irrational decisions, try to lower the trade size to what feels comfortable with you. After doing this, always update your trading strategy!
7. DO NOT GIVE UP! : there is a point when every trader feels like giving up, losing all his faith, but you should understand that this is the normal journey, with ups and downs, and if you do not let yourself intimidated by the downs, the ups are limitless!
Why 99% of traders FAIL?Hello traders! Check out the main reasons why some traders are profitable and the others fail, tell me who you identify with and also your opinion on these facts!
SOL BottomThis is more of a lesson on Psychology of Markets and how it can be used as confluence in helping identify bottoms.
Crypto is very cyclical and there are tons of emotions involved, especially for novice members.
Crypto also has many beginner investors that enter, as the user base is primarily younger generations dipping their toes in on perhaps generational wealth.
I have traded crypto markets for 6+ years now and been involved with 3 market bottoms now.
This is the exact type of chatter/doomsville posts you see at the bottom of markets.
Remember, 99% of investors are euphoric at the tops, 99% of investors are fearful at the bottom.
I am heavy Long on SOL, not just from technicals, but now increasing confluence with market participants emotions.
advisor.visualcapitalist.com
TRADING - TRUTH VS LIE 📉📈
A financial background can be useful for understanding how forex and other markets work. However, more beneficial are skills in math, engineering and hard sciences, which better prepare traders for analyzing and acting on economic factors and chart patterns. It doesn’t matter how much awareness you have about financial markets – if you can’t process new data quickly, methodically and in a focused manner, those same markets you thought you knew so well can eat you alive.
ANSWER: LIE
EXPERT TIP: To prepare for trading, focus on developing analytical skills rather than boning up on financial knowledge.
Trading is like running a business. In order to be successful, you need to learn from mistakes and have rules in place to help protect your capital. Like a business, it’s crucial to have appropriate strategies on hand for varying market conditions. Setting up a business is easy, and similarly, trading is easy too. Developing successful strategies and making money? That’s the hard part.
ANSWER: TRUTH
EXPERT TIP: It will seem easy if your early trades go well, but long-term profitability is a different matter altogether. Make your life easier by researching your trades, using the right position size, setting stops and keeping a handle on your emotions.
Can you be successful with a small trading account? It depends on your definition of successful. An account needs to be large enough to accommodate proper risk parameters. But success is relative; a high rate of return is based on percentages and not on monetary amounts.
For example, a 20% return is a 20% return regardless of the account size. However, if your 20% return isn’t worth enough in hard cash, it might be hard to incentivize yourself to improve as a trader.
ANSWER: IT DEPENDS
EXPERT TIP: Your account size will depend on your goals and your prior success. Naturally, experienced traders will have a larger account but to begin with, concentrate on that rate of return percentage.
Bragging rights be damned: the number of trades you win is irrelevant. Profitable traders simply make more money than they lose.
Say you win five trades and make $5,000, but lose one trade and lose $6,000 – you have won more trades than you have lost but are still down overall. Profitable traders will set rigid risk-reward parameters for a trade – for example they might risk $500 to make $1,000, a risk-reward ratio of 1:2.
If a trader makes five trades using this method, loses three of them and wins two of them, the trader is still $500 in profit ($2,000 profit-$1,500 loss). Don’t be afraid of taking a few hits: if your process is sound, one big winning trade can reverse your fortunes.
ANSWER: LIE
EXPERT TIP: Many successful traders will be losing more trades than they win, but oftentimes it won’t bother them. Focus on getting the right setups rather than worrying about the ones that got away.
How much time you spend trading, and monitoring trades, will depend on your trading style. Those employing a scalping strategy, for instance, will make a large number of transactions per day, entering and exiting many positions, and will need to pay close attention to their trades on the shortest timeframes.
However, position traders won’t need to spend as much time monitoring, as their transactions may last weeks, months or even longer – meaning long-term analysis will account for short-term fluctuations.
ANSWER: IT DEPENDS
EXPERT TIP: Ask yourself what type of trader you are. Shorter timeframes will mean monitoring and analyzing constantly – being ‘always on’. If you favor a more relaxed approach you may be suited better for position trading.
Some traders advocate a ‘mental stop loss’ when the market gets tough – that is, relying on oneself rather than a computer to set a level at which to exit a losing position. The problem is, a ‘mental stop loss’ is just a number that makes you worried about the money you’re losing. You may fret about the direction of the market - but you won’t necessarily be compelled to exit your trade.
A fixed forex stop loss is completely different – if your stop loss price trades you are out of the position, no ifs or buts. Exercising proper money and risk management means setting solid stops. Period.
Answer: TRUTH
EXPERT TIP: It can be so easy to neglect your stop loss. When a trade is going your way, the dollar signs can blind you - but you should protect yourself against the market turning.
Spreads may represent the primary cost of trading, but they aren’t the be-all-end-all when it comes to choosing your market. You may find an asset that has a wide spread but represents a strong opportunity due to its volatility. Similarly, you may find an asset with high liquidity and a tight spread, but that isn’t showing much trading potential. Above all, you should let your trading decisions be governed by setups presented by the market, not the size of the spread.
Answer: LIE
EXPERT TIP: The spread can represent a significant cost to traders – but don’t let it be the sole factor dictating your choice of asset.
The economic analysis key to a fundamental approach helps give traders a broader view of the market. Sound knowledge of the underlying forces of the economy, industries and even individual companies can enable a trader to forecast future prices and developments. This is different to technical analysis, which helps to identify key price levels and historical patterns, and provides conviction for entering/exiting a trade.
It’s true to say that expertise in economic analysis is important. However, so too is expertise in the technicals. Many successful traders will look to combine fundamental and technical analysis so as to be in a position to draw on as wide a range of data as possible.
Answer: TRUTH
EXPERT TIP: It may be worthwhile to devise a strategy accounting for the nuances of both technical and fundamental analysis.
News can create big moves in the market, but that doesn’t mean trading the news leads to the biggest opportunities. For a start, the volatility of important news events often makes spreads wider, in turn increasing trading costs and hitting your bottom line. Slippage, or when you get filled at a different price than you intended, can also hit your profitability in volatile markets. On top of these drawbacks, traders could get locked out, making them helpless to correct a trade that moves against them.
ANSWER: LIE
EXPERT TIP: ‘Trading the news’ can seem like a fashionable thing to do, but market movements can be unpredictable at the time of major releases. It’s often best to steer clear during such high volatility.
Excluding emotions from trading is an impossible endeavor. It can lead to more internal conflict than benefits, which is why managing emotions is a better way of looking at it. You have negative emotions like fear and greed that need to be managed without suppressing positive ones like conviction that help drive you towards the best opportunities.
Answer: TRUTH
EXPERT TIP: Even the most experienced traders feel emotion in the heat of the markets, but how they harness that emotion makes all the difference.
Source: DailyFX
Trading Psychology: 4 Dangerous Emotions Traders Must AvoidWhen I was a naive, newbie trader, I didn’t pay much attention to my trading psychology. I was more focused on the technical chart patterns and trade setups.
However, I soon found out the hard way that…
Ignoring the psychology of trading was destroying my trading results.
That’s when I began making a serious effort to master my personal trading psychology.
I started reading trading psychology books, and even worked with a personal trading coach.
I was definitely on the right path to mastering trading psychology, but wished I would have started learning sooner.
That’s why NOW is the perfect time to start getting your trading psychology edge.
But why is it important to understand stock market psychology?
Understanding stock market psychology paves the way for your long-term trading success.
That’s why this exclusive new mini-lesson of top trading psychology tips is just for you.
How do you develop trading psychology?
Some trading sites advise new stock and crypto traders to gain experience by paper trading with a simulated account.
This can be helpful to learn the basics of trading, but it’s a much different ball game when real money is on the line.
Your true emotions in trading will only be revealed when risking your own money with actual trades.
Therefore, the best way to develop your trading psychology is simply by working your way through hundreds of live trades with real capital.
Keep a basic journal and note when you feel the dangerous emotions below start creeping in.
This is the only way to truly identify your personal strengths and weaknesses in trading psychology.
4 Most Dangerous Emotions to Avoid:
Fear, Greed, Hope, and Regret
Investing decisions in any market in the world are driven by 4 powerful emotions of Fear, Greed, Hope, and Regret.
Left uncontrolled, these emotions can have a seriously negative impact on your trading account—but only if you let them.
Your personal ability to master these key emotions directly determines your long-term trading success.
So here’s a quick rundown of how fear, greed, hope, and regret can harm your trading results.
Most importantly, I have also included actionable ways to avoid these emotions in your trading.
FEAR – The most powerful human emotion that affects your trading
Fear is a distressing emotion caused by a feeling of impending danger.
This results in a survival response, regardless of whether the threat is real or imagined.
Traders consistently report fear as the emotion they struggle with the most. Fear has even caused people to jump off buildings during market panics.
FEAR is the reason markets typically fall much faster than they rise.
It took the Dow Jones Industrial Average 24 years (1983 until 2007) to rally from 1,000 to 14,200…BUT it only took 2 years (2007-2009) to lose HALF of that multi-decade gain.
Why?
Uncontrolled fear rapidly leads to panic—which leads to poor decision making in the markets.
When traders become driven by panic, they often sell their positions at any price. That’s why stocks frequently cliff dive when group fear starts kicking in.
Fear can also rear its ugly head after you experience a string of losing trades. After suffering many losses, fear of “yet another loss” can make it mentally challenging to enter new swing trade setups.
When paralyzed by fear, you miss out on profitable trading opportunities.
If it’s a quality trade setup, then don’t let fear prevent you from buying (be careful not to confuse this with revenge trading).
Remember that each trade you enter is completely independent of the previous trade.
Therefore, losing money on a prior trade does not necessarily mean you will lose on the next trade.
Fear is not always bad, as it can help keep losses small.
For example, fear of a bigger loss can get you out of a bad trade you should no longer be in.
If you immediately sell your stock or crypto when it hits your preset stop price, then the fear of a bigger loss protects you from major losses.
When there is fear, steer clear!
If the market is in a state of panic, don’t fight the downtrend. If you’re in doubt, get out!
Don’t try to rationalize or come up with excuses to stay in losing positions beyond their stop prices.
HINT: Ignore the news and internet forums to prevent lame rationalizations for staying in losing trades.
When there is too much fear in the markets, our flagship swing trade alerts service simply shifts to cash until a new buy signal is received. This prevents fighting strong downtrends in unfavorable conditions.
GREED – Too much greed decreases your trading profits
Greed is an excessive desire for money and wealth, but is a natural human emotion.
A healthy amount of greed can help drive your trading profits, but too much greed will have the opposite effect.
How to know when it’s too much greed
Greed is when you have already made a large profit on a trade, BUT are still obsessed with how much more you could have made if you stayed in the trade longer.
The mistake with this reasoning is that all gains are not real until the position is closed. Until then, a winning trade is only a profit on paper.
Greed can also cause traders to make bad trades by ignoring solid risk management rules, which signals a lack of discipline in your trading or investing.
To keep greed at bay on a winning trade, sell partial share size to lock in profits, then trail a stop higher on the rest.
Proactive trade management like this is why our exclusive Wagner Daily stock picks have been consistently profitable over the past 20 years.
HOPE – A fake friend who will take your money (but only if you let it)
Hope, a feeling of anticipation and desire for a certain event to happen, may be the most dangerous emotion for traders.
If you are an active trader or investor, the feeling of “hope” in your day to day trading activities must be avoided at all costs.
Why is hope so dangerous for traders?
Hope may prevent you from immediately selling a losing trade that hits its stop price—which is the top rule with most trading strategies.
When you blow a stop, you will usually wind up with a much bigger loss than you planned to risk.
You may get lucky with a second chance to exit (especially in a forgiving bull market). However, this is definitely not a situation you want to be in.
A weak stock typically continues much lower before bouncing, which is why you must always honor your stops.
Otherwise, that’s when hope can really sneak up on you!
Hope will convince you to just “hang in there a little longer” because:
“Big news is coming soon”
“This stock will surely rally after their next earnings report”
(Insert your favorite bullshit excuse here)
Meanwhile, while you’re busy hoping, the price plummets and has a catastrophic effect on your entire trading account.
Rest assured, the market will eventually punish you by taking your money when you slip into “hope mode.”
But the good news is that YOU alone can easily prevent this scenario from happening.
Simply always set protective stops to pre-define your maximum risk per trade.
Be rigidly disciplined to follow your trading plan, and hope will never become an issue in your trading.
Plan your trades, and trade your plan.
REGRET – Remember the next opportunity is always just around the corner
Regret is defined as a feeling of sadness or disappointment over something that has happened—especially when it involves a loss or a missed opportunity.
It is only natural for a stock trader to regret entering a losing trade or missing out on a winning trade.
But to master your trading psychology, do not hyper-focus on losing trades or missed opportunities.
If you lose money on a trade, then simply evaluate what went wrong, learn from it, and move on.
Don’t waste time regretting your original decision to enter the trade. What’s done is done.
Conversely, you may feel regret when you miss an opportunity. This is human nature.
However, you must train your mind to simply move on to the next trading opportunity—which is always just around the corner.
When you allow this type of regret to control you, it becomes too easy to “chase trades” with risky entry prices.
If you chase, your risk/reward ratio of the setup no longer meets the parameters of healthy trade management.
Let’s say you plan to buy $DUDE stock at a $60 buy trigger price, with a swing trade target around $70. If you buy it, you plan your initial stop at $55.
This gives you a 1:2 risk/reward ratio (risking $5 to gain $10).
$DUDE stock rallies, but you miss your original $60 buy and instead chase the price to an entry at $65.
If you don’t significantly raise your initial stop, you now have a negative risk-reward (risking $10 to gain $5).
In this case, your regret of missing the $60 entry caused you to chase it to $65 (next time, just wait for a pullback). Avoid feelings of regret to ensure the math of trading is always in your favor.
We always target a bare minimum risk/reward ratio of 1:2 for swing trades in our stock and crypto swing trade alerts services.
Successful traders keep their minds disciplined to avoid remorseful thinking.
original source
Emotions in Trading VS Emotion in Life Emotions in Trading VS Emotion in Life
It needs to be understood that emotions are a part of life and can’t not be ignored or locked away. The important thing is how we deal with them. Do you let your emotions control you or do you take control of them?
We first need to understand why we have emotions:
Emotions help us to take action, to survive, strike and avoid danger. To make decisions and to understand others. They can help a decision-maker determine which aspects of a decision are the most relevant to their specific situation.
Emotions are like a double-edged sword:
They help you see problems in a new light or they create problems that aren’t even relevant.
Emotion reduces anxiety or increases anxiety.
Eases depression or creates depression.
Let’s move onto emotions when it comes to trading:
Emotions are great when you are with friends, writing or watching a movie but when it comes to trading, they are pure kryptonite.
If you feel like you need to rationalize or defend the trade you have just made, then this a clear sign of emotion. Be surgical with your trades!
Do not let one bad trade ruin your day, this is counterproductive. Stay focused and reject the emotions and self-loathing. Move on!
We should be following structure as long as it is profitable, all the while looking for signs of rotation.
You can never go broke by taking profit.
Be mindful of your mood and confidence level.
How actively and carefully you define your risk will have major implications on the long-term health of your wallet.
Your goals should be humble, and your approach to reaching them methodical.
Money is made waiting.
If you spend your time obsessing over old losses you have a high probability of generating new ones.
After a big loss – Thinking you have to make the money in the next trades is a bad idea as you do not have a good feel for the trade and so you are likely to repeat the same mistakes that cost you money in the first place.
Always stay patient, stick to the System and don’t let yourself get caught up in the emotions of trading. Be patient, be careful and choose your trades wisely.
You should be a cold calculated sniper, focused on the mission at hand.
Monitor your emotion and aim to be neither too high or too low – stay grounded and focused.
If you are not willing to lose it. Don’t put it on the exchange.
Learn to accept and embrace the risk.
Traders should put on a trade without the slightest bit of hesitation or conflict, and just as freely without hesitation or conflict, admit when you were wrong.
If you are unable to trade without the slightest bit of emotion or discomfort (specifically, fear and greed) then you have not learned how to accept the risks inherent in trading. This is a big problem, because to whatever degree you haven’t accepted the risk, is the same degree to which you will avoid the risk. Trying to avoid something that is unavoidable will have disastrous effects on your ability to trade successfully.
Redefine your trading activities in a way that allows you to completely accept the risks is the key to thinking like a successful trader. Learning to accept the risk is a trading skill. It is one of the most important ones you can learn.
Disciplined Traders: Developing Winning Attitudes.
Those traders who have confidence in their own trades, who trust themselves to do what needs to be done without hesitation, are the ones who become successful.
It’s when you’re winning that you are most susceptible to making a mistake, overtrading, putting on too large a position, violating your rules, or generally operating as if no prudent boundaries on your behavior are necessary.
You create your own outcomes, the market doesn't care or feel anything towards you.
The way you think (is extremely important) Think it - Believe it - Achieve it
The best traders stay in the flow because they don’t try to get anything from the market; they simply make themselves available so they can take advantage of whatever the market is offering at any given moment.
Accepting the risk means accepting the consequences of your trades without emotional discomfort or fear.
Each trade is a new trade. No, matter if you won or lost your last trade, it doesn't impact your current trade.
If you are fearful, you can't learn something new and it will make you forget the bigger picture.
No one knows what is going to happen next, so stick to the strategy.
What you think does not matter - What you see can be changed - What you feel is emotion which is not needed when trading.
Every trade is different, there is no such thing as certainty in life let alone trading.
To eliminate the emotional risk of trading, you have to neutralize your expectations about what the market will or will not do at any given moment or in any given situation.
Learn to trade with NO expectations.
Create a carefree state of mind that completely accepts the fact that there are always unknown forces operating in the market.
“Losses are simply the cost of doing business or the amount of money I need to spend to make myself available for the winning trades.”
When you really believe that trading is simply a probability game, concepts like right and wrong or win and lose no longer have the same significance.
A Trade in three phases:
Entry: The first phase commences when direction has been confirmed and requirements to enter have been established. You begin getting excited, your heart pumps a little faster, you sit up in your chair. As your entry point gets closer, you start to lean toward the screens. As the entry gets closer and closer, you start to feel nervous. You begin to think you are missing out, and that you should have already entered the trade (This is FOMO). Then it begins to pull back, which by the way you wanted to happen, but you begin to start questioning whether the entry point is still valid. You ask yourself, is this just a pullback or is it reversing? All of a sudden it does a quick spike up ... Followed by a quick dump. Now your heart is really pounding and your finger on the mouse is shaking. It looks like the right time to enter; all the right confirmations are present, but you just do not feel it is right and you are seeing all these other signals telling you that it is the wrong setup! At that very moment you need to decide if you are going to listen to your emotions or follow the process and systems you have be taught. You cannot do both. DECIDE!
During the Trade: You finally make the decision and pull the trigger to enter, but that does not calm your emotions. In fact, the emotions keep coming, and keep coming even more powerfully. You hear yourself say, “Yes! Yes! It’s going in my direction. My entry was perfect.” But then, “Oh no! It’s starting to go against me. My feelings were right. I shouldn’t be in this trade but wait, it’s now coming back in my direction!” “Yes! Keep going!” “Wait! Oh no! It’s going against me again.” You start to frantically search for signals to help you decide whether or not to stay in, or exit the trade. Your heart is still pounding. Your mind is saying that since you have some profit, you should take it and run. “Don’t give it back! Exit! Exit! EXIT!” You give in, you exit.
After the Trade:
At this very moment, you are now calm. You survived. Your body and mind are safe from losing and you also made some profit. But wait! Your trade starts to rise again. Without you. “Damn it! I knew I was right. Why did I get out?
What was I thinking? Yep, it hit my profit target too. FK!” The frustration of not sticking to your plan all of a sudden start to sink in and you begin to get angry and frustrated. Now you have to decide if you are going to keep trading or walk away.
What I hope this scenario illustrated to you is that when your setup starts to appear. Your uncertainty will be unleashed. Your emotions will be triggered to protect yourself from losses, but instead you want to invoke your hyper senses, so you focus on your execution rather than the outcome. This is the emotional intelligence you are looking for in order to become profitable.
I have linked any amazing idea to this article that I believe will help you just as much as this one. (NFA - Just my thoughts)
Thanks for reading and have a success week ahead!
Bitcoin Bear Flag: WARNING!Hello Team,
---Trade Idea:
Short Play:
Bitcoin has formed another Bear Flag; this formation is a bearish pattern indicator. You can see the outcomes of Bear Flags in Bitcoins Past giving the short play a higher probability of occurring. We will wait for a confirmation break of the flag support to enter short positions to our 18.8K Target. As the price falls we will add breakeven stop losses and take profits along the way keeping a small remaining position open for a potential continuation down. Coming up we have GDP, Core & Fed talks so expect an increase in volatility.
This Short positions will be invalid if we break out of the Bear Flag resistance. If this lower probability of price action occurs we can look to retest ~28K.
---Opportunity:
Historically Cryptocurrencies have a ~4 Year Bear market according to its short historic data. If this occurs again we can look for more despair in the markets. The cryptocurrency market maximizes emotions with its huge swings in price. In the past, we called the last bear markets (2017 BTC 5K, 2020 BTC 10K & Other altcoins) & warned of sell-offs during the bull market (ETH 4K & BTC 60K). Every time emotions hit an all-time high. We have already started entering positions for our long-term portfolio (which can be seen in our others posts). We also are preparing our long-term portfolio for all outcomes of the financial markets (you can view a breakdown of the plan in a past post). Investing in the cryptocurrency bear markets in the past has created life-changing opportunities.
---Stock Market
The Stock Market is still toying with emotions as well as creating a potential bear trap and is still in a medium-term downward pattern. If the stock market takes another dive downward expect Bitcoin to follow as they are currently correlated. Currently, the SPY has hit a resistance level that could push it back below 400 and into the high 300s. Look for a pattern break to indicate a reversal in both the stock market & cryptocurrency market before looking for a long trade or long positions for your long-term portfolio.
STEP 1 to MASTER TRADING: Hindsight trading. Train your eyes.A common mistake that traders make after learning any kind of trading setup is jumping into backtesting using a replay tool, or even live trading.
However, if you think about it, trading is very much about pattern recognition. And when you force yourself into live trading without a proper understanding of what your patterns look like, most likely you’ll need much more time to succeed.
A different approach and much more effective would be using hindsight, that’s when you see what actually happened.
During this process, try to find at least 50 high-quality setups, that represent your trading system. So you actually see everything that happened and find situations, where your edge played out, document it in your journal. That’s great training for your eyes and brain.
You don’t need to guess, you will not feel anything, because you already see what happened, you’ll notice that sometimes your edge, your system doesn’t give you entries and price goes without you, sometimes, you’ll see a loser or a breakeven after your entry, start to get used to this, as it’s all part of your system.
After that, you'll have a much better understanding and vision for your setup - and that could be the time to try some backtesting and forwardtesting.
I’ll talk more about a different kind of backtesting in future posts. Meanwhile, take care, send your questions, and comments, will be glad to chat with you.
Dima
EMOTIONAL TRADING AND HOW TO STOP IT p2
EMOTIONAL TRADING AND HOW TO STOP IT
This post goes as a continuation of the previous one, so if you haven't read it, I highly recommend it (link in pinned post)!
The emotional trader sometimes has losses, that can costing him much more than just losing money. Having been upset, because of a particular losing trade, such a trader fall into emotions and tries to return everything, that he lost. He is ready to ignore the rules of his trading system and money management for this, eventually losing more and more.
When such a trader has several profitable trades in a row, he is also unable to stop and tries to maximize the success achieved. Trying to extend the winning streak as long as possible, he begins to open trades, that he would otherwise avoid, and in the end everything ends by losing money again. This familiar trading problem is usually quite expensive and costs for a trader - time, money and self-esteem.
If a trader wants to break out of this vicious circle, then he will need to deal with his feelings, thoughts or actions. Find and change the negative psychological attitude that leads to the appropriate behavior.
A good starting point is to ask yourself: Why am I trading this way? Answering this question in writing (which is desirable), listing your thoughts, beliefs and assumptions, you can come across something like this list of answers:
❗️ “If I don’t end every day with a profit, then I'm a failed trader. I can’t afford losses and close the day in the red”
❗️ "If I don't fight the market to get my money back, that will mean I've given up"
❗️ “I just need to work on more deals and I will succeed”
❗️ “When I trade profitably, luck is on my side. But everything can change at any moment. So I need to make the most of the situation and open as many trades as possible while I’m lucky.”
❗️ "The market wants to ruin me"
In some ways, we all remain "Pavlov's dogs" - the more and more often we repeat a certain behavior model, the better it's remembered, eventually reaching almost complete automatism.
That's just a very rough list, but even looking at it, it's easy to understand how these or similar thoughts can shape certain trading behaviors. Since such a trader feels like a loser until he gets his money back, he will do everything to regain the feeling of a winner. At the same time, thanks of negative experience, such a trader doesn't believe that his trading will be consistently profitable in the long term, and therefore tries to “snatch” as much as possible from the market, which leads to even greater losses.
By reflecting on and changing each of these negative beliefs, a trader will be able to understand how irrational they are. Then he can replace these psychological attitudes with more positive ones:
💙 “I don’t have to end every day on a positive note. It is more important for me to maintain a positive balance in the long term.
💛 “Admitting a loss on a particular trade is not the same as admitting defeat. Instead of trying to immediately recover losses, I will analyze my trading and find out why I took a loss. This way I can prevent this situation from happening again in the future.”
💙 “Increasing the number of deals is not the key to winning. It is much more productive to improve their quality.”
“When I am trading well, it is because I am in better shape. Luck and luck play a certain role in my life, but do not determine it. As I succeed in trading, I am grateful to myself for this, and I will continue to try to make smart trading decisions in the future.”
💛 “The market does not want to kill me. He is neutral and completely indifferent to me personally and to my trading results. He has no consciousness and is not able to think independently. And he does not try to punish me at all or deliberately harm me.”
If the trader in the example looks at this list every day, it will help him stabilize his emotions and make smarter trading decisions. On the one hand, these attitudes do not provoke intense and emotional trading, and on the other hand, they do not lead to the development of laziness and apathy.
Have you tried to write Your thoughts?🧐 If not, try it,(it works good) If yes, please share your experience in the comments.
Stay with me, subscribe, for not get lost. I will be glad to see your activity by clicking 👍 like button and writing comments!♥️
Always Sincerely Yours Rocket Bomb 🚀💣
EMOTIONAL BURNOUT OF A TRADER Hello, dear friends!
This post goes as a continuation of the previous two, so if you haven't read it, I highly recommend it (link in pinned post)!
Today we are talking about <>. I think it's a pretty relevant topic.
Let's look at more general problem. Burnout, which is characterized by apathy, laziness, loss of interest in trading, and generally reduced vitality, probably most accurately describes state, that most of us well know.
Most traders are always emotionally extremely involved in the trading process, but sometimes even the most psychologically stable can give up.
About a year ago, at the very beginning of active trading, the once active beginner was full of enthusiasm and hopes for a brighter future. The head was slightly spinning from the huge financial prospects, and this gave an additional incentive to work. Such a trader at times could even forget to eat or sleep for the required number of hours.
However, by the end of the first year, the results didn't live up to expectations, and on the contrary, it turned out that were more difficulties than joys. He begins to feel, that all his efforts are in vain and lead nowhere. This causes him to lose interest in trading and become more and more apathetic towards this activity. Thoughts come, does he need it at all, all this trading ...
What hidden negative beliefs drive this trader's growing lack of motivation? The list might look something like this:
🔴 “All my efforts are leading me nowhere. I'm not moving anywhere: one step forward and two steps back."
🔴 "Nothing I've tried to do, didn't works, so my dreams have failed"
🔴 “A trader needs to be born or have a talent for this occupation. I may never be destined to be a trader.”
🔴 “Trading systems and strategies, that work for others don't work for me. There's something wrong with me"
🔴 "Maybe I'm just unlucky"
🔴 “Doing the same thing over and over and expecting a different result is crazy. I'll go crazy if I keep doing this."
It's easy to see how a list of such or similar setups can negatively affect a trader's self-esteem and make him feel negative about his own efforts. He actually spirals into apathy, at least as far as his trade is concerned.
The problem is that the more multidirectional and chaotic efforts such a trader makes in his work, the worse the result becomes and the more he is convinced of his negative statements.
Of course, it is impossible to change your own thoughts in an instant, but you can start working with it systematically.
Thought is the foundation and catalyst of action. By changing the paradigm of thinking, we will inevitably change the quality of our actions.
🟢 “You can quit everything, but that's not the best way. Although I feel, that I'm marking time, but during this time I have learned a lot, learned a lot and continue receive new knowledge every day. Quantity will turn into quality, and I'll be able to move more intensively towards my goal."
🟢 “While things I have tried haven't bring me a results I want, but it doesn't mean my future efforts won't get me what I want. I have a huge knowledge base compared to a year ago. It will help me succeed.”
🟢 “No one is born to be successful at anything, and trading is no exception. If I really like trading, I can find a way to get good results.”
🟢 "I'm alright. Systems and trading algorithms, that don't work for me are systems that I either misapply or may not fit my personality. But there is a trading strategy, that is perfect for me, and I will create it myself.”
🟢 “The factor of luck is certainly present in my life, but it's not decisive. After all, my hard work will help me move forward. My intellectual baggage and everything I have learned during this time will help me gain control of my life."
🟢 “Maybe I should consider some changes in my life and work, but it's not crazy, I believe, that daily hard work eventually leads to success. Anyone who has ever become an expert at something or been successful has experienced failure. In any case, I always have the opportunity to seek qualified help if I need it to move forward faster.”
These new mental attitudes are much healthier and can help the trader to reconfigure their behavior. Thought is the foundation and catalyst of action. By changing the paradigm of thinking, we will inevitably change the quality of our actions. This applies to absolutely any activity. The examples discussed above illustrate how reformulation of internal dialogues can lead us to a change in the quality of attitudes, to a deeper self-awareness. It gives us an opportunity to make more reasonable and accurate decisions during trading, and in general.
I hope you enjoyed this post, write in the comments what else you would like to see in my next posts!
Stay with me, subscribe, for not get lost. I will be glad to see your activity by clicking 👍 like button ♥️
Always Sincerely Yours Rocket Bomb 🚀💣
Don't let the dopamine get you 🥴Do you feel excited? 😅
This is why. It's all down to the chemical reaction in your brain. Dopamine.
Dopamine is a chemical in the brain that makes us feel good.
Should you be feeling excited when trading?🤔
No.🙈 As this isn't gambling and shouldn't give you the same dopamine rushes like a gambling win does.
What's starts as initial excitement will move to fear, anxiety, stress and excitement again. 🤷🏻♂️
You become irrational and unable to stick to your plan.🤯
Entering trades through boredom for the 'rush' and closing profitable trades too early because of fear of the profit disappearing - all because you risked too much for that 'buzz'.
'So what can I do about it?' I hear you shout loudly....📢
Well this depends on if you really want to change or not, the downside is you'll think you will make less money ....
Think about it - you have a £5000 account right?
Option 1 - you trade 15 pairs at 0.5 lot size and your account is up and down like a yo yo - but it's exciting right?
Option 2 - you trade 3 pairs at 0.01 - your account movement is marginal.
Option 2 is less exciting for sure, but if you want excitement go and jump out of plane.
Option 1 will eventually lead to a blown account.
Option 2 will give you sustainable consistent trading - you'll let your winners run and you'll lose less on the losing trades. A win win.
Only when you get this bit right will you start to see positive change.
Emotional control is key
Be present doing other things without checking your phone to see how trades are going.
Exercise patience by sticking to your plan and letting your trades run instead of closing them early.
The only thing you can control in trading is YOU
Just don't end up letting the dopamine take control!
Have a good weekend everyone and thanks for looking
Darren👍
Mental Flexibility - Reason WHY people lose their deposits 👀Hello dear community member 🙌
Do you agree that mental flexibility is one of the most important qualities for a trader? Let's discuss:
• Why is it important
• What happens when a trader does not train the flexibility of the mind
• How to develop it and improve your results in trading
You don't need to look far for examples of why this is important. Let's remember the fall of the 21st, when everyone was expecting the endless growth of the crypto and the imminent capture of the world by dogecoin adherents and Elon Musk. What happened to these people after November? They continued to long into the short market and most of them lost their deposits.
Why do our eyes get blurry? After all, a month after the wrong decision, we hesitantly look back and think: "God, what an idiot I am, how could I not see this ?!"
Man was created in such a way as to adhere to a given plan and not deviate from it even a step. Our hairy cave ancestors saw the mammoth and could follow it for days until it separated from the herd and became a convenient prey. If they hesitated and looked from one mammoth to another, their chances of returning home with prey would be greatly reduced.
"If you chase two hares, you won't catch either"
And it so happened historically that we like to focus on one thing and in many ways it is useful - ONE job, ONE family, ONE faith, ONE and the same bigmac at McDonalds. However, in trading you need to be open to alternative opinions and be able to quickly change your own, because this is a matter of life and death of your deposit.
There are a couple of ways to develop flexibility. From the simplest to the most complex:
🏅 Community. By joining the elite club of experts, you will always get a lot of cool ideas and understand the mood of public. It will become easier to make decisions, as well as change your mind.
🏅 Alternative plans. By preparing the main scenario and the alternative one, you show your brain that both options are acceptable for you and subconsciously you will be more open to a change in the wind.
🏅 Meditation. Daily practice of meditation helps to better feel your inner "I", streamline thoughts, weed out the unimportant, and control your own ego.
Choose what you like and let's build a strong community together!
Have something to add? Share your opinion in the comments.
If the post made you think, like it, so I will understand that it was useful for you and I will be motivated to write more. Be sure to write about what else you would like to hear.
The study of the prism of vision 🎓Here an open mind opinion which will be very usefull if you are a beginner, if you are at research of profitable and regular results, if you research something working for you in this game, and for many others. I will not develop any strategies or analysis here (it would be too long), just show exemple of some with, in the end, some advice that you MUST read to perform in this trading.
First I will explain why it came to my mind to make this post and secondly I will provide a deep speech for everyone of you.
If you follow me, you know I provide notably updates on Bitcoin for the moment, my analysis, some explanations about what happen inside the market and some expectations for the future (and signal / trades when there is). Yesterday when I wrote the LDTP #11 (you can find it related to this idea), I explained many technical things and during I was writing the post, market made exactly what I was explaning for and what I usually develop. It gave this masterpiece from market like I called it in the initial post 👇
Here showing most of the knowledge I use in my strategy, you will find on this chart Volume analysis, Volume Profile analysis, Wyckoff Pattern analysis, Resistance / Support analysis, Candlestick analysis, Supply / Demand analysis but it's not what I want to develop here.
When I cleared my chart, I said to myself : " How beginner cannot be lost when we see this obvious triangle that probably others people develop, exploit, trade for and claimed as THE solution in trading ? Which one say true, is it the Wyckoff pattern with the spring or is it the triangle ? " And so I developped this triangle, and others technics, always taking a blank chart arguying around differents technics. Here the result (I don't present it as working strategies, just as other setup, reading and visions) :
Using Support / Resistances, Chartism analysis, Volumes 👇
Using Supply / Demand, Candlestick analysis 👇
Using Harmonic pattern 👇
Using Fibonacci retracements & extensions 👇
Or just using the Tradingview Bollinger Bands strategy 👇
And so, looking to that, I was asking myself : "How peoples can determined which content could be usefull for them when everybody say differents things, claiming for differents technics / strategies, speaking of a same chart ? Who say the truth ? Is this game a big coin flip party ? ". I believe some beginners have already wondered about it. How don't think that when you start here and you see many traders, revendicating as professionnals, saying the exact opposite of the others for some reasons that all seams technically viable.
🔰 So here my answer that you need to read : 🔰
In trading, nobody say true but nobody say wrong also, because there will be always a moment where they will have reason. No strategy say true but no strategy say wrong too, because there will be always a moment where they will have reason. Same as indicators, same as technics, same as ... In the end only market have reason. Don't search to control the market, search to understand it. Don't search to be rich, search to be profitable. Don't search to always have reason / always win trades, but most of the time.
▶️ Don't believe others !
Find usefull content, learn from them, learn from you, but learn. You will never win money by following naively what someone say even more if you don't understand what he say and why he say that. Look at all technics, at all approch, at all strategies you can find in trading, search on these, learn on these, until you find one which will fit with you. You will never win money by applying painfully the strategy of another person. Your mind, your personnality have to show through your strategy. Like there is thousand of assets to trade on, there is thousand way to trade them.
▶️ Grind the market until you apply your strategy/knowledges unconsciously !
Here how your brain work or how you have to make it work : You are unconsciously incompetent, then you do research to experiment new approch of understanding. You find it so you become consciously incompetent, then you learn about it to become better. You force yourself to apply it so you become consciously competent, then you grind it everyday, everyweek, everymonth as long you need for integrate it. When you are finally able to do it naturally you become inconsciously competent, then you can restart with another unconsciously incompetent aspect of you.
▶️ Don't avoid failure, you will fail !
Every trader already failed, at different scales, but this is a fact. This is how work your brain, you learn, then you apply, then you fail, then you learn from it to apply better and to avoid future mistakes. And failure will became less important but you will continue to fail, and you will continue to learn from them. This is how you become profitable. You can block yourself in a state where you don't want to fail, but you will never progress. Failure help to question ourselves, it's an essential step to progress. If you are not able to take a step back from your results, from how you apply your strategy and your knowledges, you will run into a wall, you will loose time and failure will became harder than never.
▶️ Become mathematically reliable !
Today you have the opportunity to test strategies for free, abuse of it. Use virtual money accounts and train for days, weeks, months, years until your strategy became mathematically reliable. By using virtual money and not your own, it will able you to fail, as much you need it. But you will also work on your strategy out of any emotions. Because when you trade with real money you are impacted by emotions, and as you are, your strategy will, and is profitability with it. If you don't do that step of learning and applying far from real money you will lose your time to blame your emotions like the reason why you are loosing money but it's just that your strategy isn't' profitable on long term.
▶️ Work on yourself !
As you have to work on your knowledges to improve yourself, you will have to work on your personnality to win money in trading. You will experience emotions and you will have to learn to control them. If you cannot you will have to learn to don't trade when you feel emotions. Emotions will make you overtrade, deviate from your strategy and so from your profitability in trading. Emotions will blind yourself from your true value, making you better than you are or worse than you are. Emotions will cause moments of intense joy as well as moments of deep sorrow. Frustration, revenge, confidence, motivation, patience, mistakes, pain, sadness, happyness I could quote decades that you will have to deal with, you will fail because of them, you will tilt, and you will have to learn about it again. Speaking of pacience, this is the major mistake of beginner for me, if you are not able to put your ass in a chair and look at market without taking a single trade during a full day, you don't trade for the good reason : you trade to feel emotions and not to win money. You are not looking the market to find entry, you are waiting the market to give you an entry : weigh the meaning of these words. And if you had doubts about it, you won't be rich tomorrow from trading because you read this words, but it can give you answer to achieve your goals.
▶️ Open your mind !
Like I showed there is many technics in trading, explore them ! That don't mean that you have to use them but you have to understand what exist, why some can be usefull in some case and not in other ... Also open your mind to other's plans, admit that you could say wrong and that you could think wrong. Another mistake that some do : don't explore only one way, don't think because this indicator say "..." that market can go only here "...". Take a step back, create scenarios that the market could follow and search in these which one you could exploit. Market cannot surprise you if you do this job, become proactive and stop being reactive. You will see that the emotional charge will be less important. But don't confuse, that don't mean you anticipate the market, you just imagine what he can do. Never anticipate the market, or you will lose money.
⚠️ To finish,
I made a statement in one of my past ideas that I want to reiterate : "Whatever your strategy, whatever your indicators, whatever your amount of knowledges, if it is mathematically reliable it doesn't lie but premiums scams lie. Doesn't matter who you want to follow, who you want to support, who you want to believe, always verify that he doesn't provide public payable services where your person serv his own interest. That probably the best advice I can give you. You will need to surround yourself to progress in trading, that a fact, but don't be the food of this guys."
Saying all that, I hope you understand now that trading isn't a question of "this indicator is better than this one", or "this strategy is the best way to ...", no it's just how you use it, how much you trained for, how much you grind to handle it. If you had to remenber only a sentence, use this one :
"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"
If you arrived to these final words I think it's because you want to improve yourself and I promise you that you will succeed if you put the amount of work necessary. It will not be an easy path but nobody said that it will be simple, except those who earn money from you.
There was so much things to say that I probably forgot sometimes what I wanted to say, and there is always at least as much to say. Maybe one day I will do another chapter but for the moment :
Like, follow or comment* if you like, I need it to continue !
*Speaking of comments, come ask questions, come share your point of view, come debate, I need it to feel that my without counterpart work is usefull for some !
