[screencast url=”http://screencast.com/t/e1E5mU8jC” width=”” height=””]
Over the years I have talked to thousands of traders and heard every single story of the ups and downs that accompany a trader from our 4 day Bootcamp to our 60 day Bootcamp I have the honor of coaching over 30,000 different people. Through this time one of the things that i noticed that we all have in common is that trading is pretty much all boiled down to a few basic things. Every trader till they lock down those few key tenets will struggle immensely. The good thing is that every single one of us will face these same issues. Bad thing is most people are out of the game before they ever figure out how to turn it around. They either blow up all their cash or they mentally have been defeated and cant come back from it.
I was much the same way. The beginning of my career started at the tail end of the dot.com bubble where I started spectacularly. I had built up a very nice size account as stocks were moving 20-30% in a day for no reason! It was an amazing time but I had no skills and it gave me some very bad habits. When the bubble burst I lost my account within 1 week. It took me 1 year to recover from that mentally I was feeling so guilty that I had pissed away all that money that when I finally got back in the game with some new “skills” that I had obtained from reading a bunch of trading books….. guess what?! I blew out even quicker the next time. The past losses haunted me and governed all my behavior. I wasnt trading stocks or the market I was trading my past and those monster losses. I could be up 1-2k on a stock but it wouldnt matter all I could think about was the 50k from the previous account. This caused me to take bigger and bigger risks to make up for the past losses and voila I burned through another account.
At that point I had enough I was mentally burned out. I had been through the yoyo spin cycle of wins then losses then wins then losses for over half a decade! I would literally make money everyday for a month then give it all back in 1 day. It was effecting my job, my relationships with people in my life, and my self worth. Basically I looked and felt like a big worthless piece of shit. At this point I had read hundreds of trading books. Practiced all styles of trading. None of it worked. Then I happened to stumble up on something that changed my life. I started going on a blog called The Market Speculator Blogspot run by a gentleman named Paul Singh. Paul as you know now runs our SwingTrade Service. I had convinced Paul to take me under his wing and teach me his ways. It literally took Paul 5 minutes to figure out what was wrong with me. He said to me “kunal man you know a lot about stocks and your a good stock picker……. but you dont know anything about trading!” In shock I said “Paul then what do you think I have been doing the last 5 years.” Thats when he sat me down and explained Trading has very little to do with being a stock picker. Trading is about developing skill and involves a very specific methodology that governs all your behaviors. In trading there is no green light buy, red light sell type of signals. If thats what your looking for this is not going to be your cup of tea. At any given moment when looking at a stock there are an infinite number of variables that can come into play. That means you need complete mastery over your methodology and the setups that you trade. One of the things that Paul taught me was that if I am trading say a base breakout pattern that beyond just the pattern I need to learn every single thing about that pattern down to the microscopic detail. Only then when the bogey comes in on your play in the middle of the market can you adapt to the conditions and think on the fly. You wont make emotional errors when you have full mastery of all the potential outcomes that could present itself.
Trading Stress causes losses. It leads to emotional and rash reactions when your trading and something doesnt go exactly your way. Thats what ate up so much of my accounts. What I have learned over the years is that the Stress comes from mainly 2 things.
Too large of a position- If you cant leave the computer to take a leak that usually means you have to much size. The size before you can handle it can ruin you as it causes all sorts of emotional decisions
Not knowing what to do..or lack of plan. Or knowing what to do and not doing it!
That part is huge. It goes directly into your knowledge levels and the amount of work you put into your plans. Do you have the proper methodology to come up with a plan of attack to make money and also the skills to call an audible if conditions change. But even harder to fight through is having all those abilities but you cant get your fingers to do what your brain knows it should be doing. Thats the mental part of trading and the hardest part to conquer. It hits every single trader everyday. It just happens to be the best traders only fall victim to that a small % of the time vs all the time.
SEE these are the things that you cant learn in a trading book! You literally need someone to work with you to learn not only the methodology but also to help you train your brain to think like a trader! Someone who sees all the angles.
Paul taught me to focus on the things that I can CONTROL. Dont worry about macro economic news….. who cares trade the price action. Why? Well unless you have 25-50 million dollars and need longterm positions that are not easily liquidated the macro news doesnt matter to us. Our greatest advantage of being retail traders is that we can move quick and audible in 1 second. Paul taught me always to control what I can control. Dont ever fret the rest because I will make money if I can handle these things.
- your attitude
- amount risked
- stop or maximum loss
- target or expected win
- entry level
- setup traded
- time frame for a trade
- position size for a trade
- trade journal and records
- your watchlist
- what news events are important
- news sources you follow
- bloggers and tweeters you follow
- trading tools you use
These ar ethe notes I used to send to Paul. This really helped me get my stuff together. Because I had to actually write out what I was going to do or what I did I found out that I didnt even take 75% of the trades I had originally set to take because by the time I had written them down I realized the trades sucked!
[screencast url=”http://screencast.com/t/VVqtMYBxvyJf” width=”” height=””]
[screencast url=”http://screencast.com/t/372sfw7lfSxS” width=”” height=””]
Here is the youtube playlist for the past P2P webinars
These are the things that took me from big fat losing trader to a winning trader that does what he wants and when he wants! Yes some of my old habits still appear they will always be there as they are apart of me in my personality. But as long as I can control it 80% of the time I can still make tons of money. Thats what we teach in our 60day Bootcamp and to our students that trade in our hedgefund . Trading is about skill development. Its no different then building an Olympic athlete. You have to learn your technique, then build your body, mind. Then it requires hours and hours of deliberate practice to develop expertise in it. He only way you can do that is by having an elite coach. Every elite athlete you see has an elite coach. Kobe Bryant my favorite basketball player had Phil Jackson and then Tim grover for his trainer. He had numerous other coaches to keep him healthy & in shape. He worked with others to develop his skill even in his 30s. I myself am the same way. There are things that I dont know about business but I want to be the best so I have a business coach who goes through the same type of program with me! If this is really a goal for you I think attacking your trading this way will be a big help.
feel free to email me with any questions firstname.lastname@example.org
We have class starting January 25th. 2015 is your year!