Info!! Trading Psychology: The Best Of 2009 - Book Four

With this posting, nosotros twine upwardly the catalog of best trading psychology posts from this weblog during 2009. Here is where you lot tin abide by the best of the 1st quarter, 2nd quarter, as well as 3rd quarter. You tin every bit good abide by the best posts from 2006, 2007, as well as 2008, every bit good every bit a collection of posts on trading indicators as well as methods.

* A Cognitive Strategy for Overcoming Frustration; come across every bit good a Solution-Focused Strategy for Dealing alongside Frustration;

* Finding Freedom inwards Commitment

* Being Right vs. Being Profitable

* Life Problems that Become Trading Problems

* Living for Trading vs. Trading for a Living

* The Power of Market Metaphors

* Ten Qualities of Successful Traders

* Avoiding Confirmation Bias inwards Trading

* How to Avoid Going on Tilt

* The Psychology of Position Sizing

* The Best Projective Test of All; come across every bit good Life every bit a Projective Test

* Why Traders Don't Make More Money

* Trading From a Position of Power

* Reducing Bias inwards Trading

* Preparing to Win

* The Value of Previewing as well as Reviewing Markets

* Discovering Your Trading Patterns

* Managing Your Psychological Energy

* Preparation as well as the Perception of Time

* Setting Trading Goals

* A Theory of Romantic Relationships

* Learning to Shift Emotional Gears

* Well-Being as well as Frustration; come across every bit good Goal Setting as well as Frustration

* Novelty as well as Psychological Change

* The Value of Trading every bit a Performance Activity

* Why Traders Keep Losing Money

* What Moves Markets; come across every bit good More Perspectives on What Moves Markets

* Biofeedback Applications for Traders

* Visualization Practices for Traders

* The Psychology of Return Paths

* Hard Lessons for Traders

* Why Quiet Markets Reveal Good Traders

* Turning Human Performance Into a Lifestyle

* Market Awareness as well as Self Awareness

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Info!! Topics To Hold Out Covered Inwards Wednesday's Costless Webinar

I only received respect that nearly K traders bring signed upward for this coming week's complimentary webinar on the topic "How to Get to the Next Level of Trading Performance." Details almost the webinar are here, including registration information. Topic ideas for the webinar, submitted yesteryear readers, are inwards the comments to this post.

Some of the topics that I excogitation to comprehend include:

* The stages of a trader's evolution together with strategies for moving from ane phase to the next;

* Sustaining psychological together with physical unloosen energy every bit a trader;

* The correct ways to grow your trading size;

* Successful journaling together with touchstone your evolution together with success every bit a trader;

* Building dependent champaign together with overcoming psychological barriers to trading success;

* The purpose of biofeedback every bit a preparation device for traders;

* Should you lot merchandise many markets/patterns or specialize inwards a few?

The 45-minute presentation volition live on followed yesteryear a question-and-answer period. Traders unable to attend the alive session volition live on able to download the recorded webinar ane time it is posted. I'll live on alerting readers to the link ane time it's up.

As always, cheers for the interest. Look forwards to seeing you lot online!

Brett

More:

Why Traders Self-Sabotage

Why Traders Keep Losing Money

Questions to Ask When Emotions Interfere With Trading

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Info!! When Terminal Losses Terminal You Lot From Winning

More than a few traders were stopped out at inopportune moments during recent volatile trading.  There are few things every bit frustrating every bit getting stopped out of what, ultimately, turns out to last a practiced trade.

I mostly detect that traders are much less detailed inwards their planning for exits than their entries.  They volition choose support/resistance levels every bit potential stops, but every bit oft every bit non these stand upward for hurting thresholds in addition to non sober assessments of a market's probable displace over a belongings period.  Not a few traders lately were stopped out exactly because their seat sizing was non matched to the market's higher volatility, causing hurting thresholds to instruct exceeded prematurely.

Suppose a trader exits a long seat subsequently several days of losses.  That seems prudent.  When nosotros buy the farm dorsum to 2006 inwards SPY, nosotros detect that v days of weakness (fewer than 50% of SPX shares trading higher upward their five-day moving averages) has brought a side yesteryear side five-day provide of +.43%.  Five days of forcefulness accept brought a side yesteryear side five-day provide of -.08%.  In other words, if you lot bought on forcefulness (prudent waiting for cost confirmation) in addition to bailed out on weakness (prudent stopping out), you lot were the really embodiment of negative timing alpha.  Stopping out inwards such a fashion stops profitability.

So what is a trader to do?  One possibility arose late when I was edifice a short-term trading organisation for the ES futures.  The organisation was modestly profitable subsequently a i solar daytime belongings period; meliorate subsequently 2 days; in addition to considerably meliorate subsequently 3 days.  When I examined side yesteryear side solar daytime returns, at that topographic point were many points where, had I been trading intraday, I would accept stopped out.  Those trades went on to instruct nicely profitable over the side yesteryear side 2 trading sessions.

After tweaking possible stops in addition to no uncertainty overfitting roughly of them, I said to myself, "This isn't working!"  So I eliminated price-based stops altogether in addition to laid upward a catastrophic terminal degree that I could alive with, but that had never been hitting during my in- or out-of-sample periods.  So i time the signal occurred, I was to concur for 3 trading sessions in addition to stick amongst the merchandise every bit long every bit the catastrophic terminal did non trigger.  I sized inwards a fashion that allowed me to weather condition expectable drawdowns without undue trauma to the portfolio in addition to sat dorsum to allow trades breathe.

I stopped price-based stops in addition to allow fourth dimension in addition to seat size define my risk/reward.  Early days, but in addition to then far it's been easier on the head in addition to meliorate for the bottom line.

Further Reading:  Why Traders Keep Losing Money
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Info!! A While Of Marketplace Life This Morning

I late posted my game excogitation for the day. I noticed that the ADP utilise written report came out weaker than expected in addition to stocks forthwith moved lower.

I waited, waited, in addition to the Spooz didn't appear to desire to become below the overnight lows to that point.

That struck me every bit quite bullish: the marketplace was absorbing somewhat negative intelligence in addition to retaining a theater tone. I forthwith bought the S&Ps.

I checked amongst around people I know close their thoughts regarding the market's merchandise hence far.

Most of the people weren't watching the market.

None knew what expectations were for the ADP report. None seemed to know close the importance in addition to relevance of ADP numbers for Friday's data.

None were tracking the market's reactions to the written report vis a vis of import levels.

I started my solar daytime inwards the black.

They kickoff their solar daytime inwards the dark.

A passion for markets in addition to trading?

Give me a break.

More:

Fighting for Your Trading Future

Why Traders Keep Losing Money

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