Trader Mindset

Subscribe to the show   Trading systems have different accuracy rates and ratios between winners and losers.   Knowing these ahead of time might better help you determine which is most suitable for you - at least to start with.   A trend following model might have 30% winning percentage with winners being 3 times the size of the losers.   A chart reading model might have a 70% winning percentage,...

Subscribe to the show   Your data feed might only include what we call normal trading hours or "outcry only."   For some of you, it might make sense to analyze what happens in pre-market and after-market activity.   You may be able to define a small edge to either improve your entries or exits.   For your exits, you might be able to effect a trade in the pre- or after-market to improve your price...

Subscribe to the show   Most system traders can screen for tickers by price, volume, and volatility. You can also add some overlays if you want and test those parameters also.   Here are a few thoughts on running screens.   Be mindful to find the data on the securities that don't trade anymore and add that data into your overall data to screen.   Else, you'll only be looking at survivors and it wo...

Subscribe to the show   Most system traders do not just increase their bet size on a whim.   Many have their risk systematized to be a fixed percentage of their overall equity conjugated with the volatility of the instrument.   They increase their risk systematically and only trade larger when their capital base grows due to gains or from adding capital to their account.   Chart readers can do the...

Subscribe to the show   In this episode I recall how I got stopped on CSCO for a loss and why that was a great trade.   Click here to get your free copy of The Inner Voice of Trading audiobook .

Subscribe to the show   If someone you know is bearish and they're not short, they're full of it and probably like to hear themselves talk.   Do them a favor and call them on their nonsense.    Ask them where their stop orders to enter the market are.   I find this happens with people who are looking for attention and trying to show you how smart they are.   What a snooze.    I don't care about op...

Subscribe to the show   Selling short on valuation at historic highs is a quick way to lose a great deal of capital fast.    Selling long on valuation is a quick way to incur staggering opportunity costs and missed opportunities.    Don't try to be smart - focus on making money.   Click here to get your free copy of The Inner Voice of Trading audiobook .

Subscribe to the show   Buying a pullback works in raging bull markets until it doesn't work anymore.   Is it a 2-stage pullback...or is it the end of the trend?   You don't want to be buying when the trend reverses.   Know what you're going to do beforehand.   Click here to get your free copy of The Inner Voice of Trading audiobook .

Subscribe to the show   It's easy to get blinded by our success when we're in boom times like we're in now.   If you get used to it, you can lose perspective and forget that sometimes what's around the corner is going to be more than just a short-term pullback.   In this episode, Michael Martin remembers what happened during previous boom times in his career for context.   Click here to get your f...

Subscribe to the show   You want to trade rules that are robust.   That will give you a better chance of surviving when the markets inevitably change.   Backtest your rules with a minimum of 10 years of historical data.   Click here to get your free copy of The Inner Voice of Trading audiobook

Subscribe to the show   I don't worry about trying to make realized gains each day.   It's not my goal to reinvent myself each day - I want the market to do the work for me.   Focus on process and the results will follow.   Click here to get your free copy of The Inner Voice of Trading audiobook

Subscribe to the show   Raise you hand if anyone from your clearing member has called you when you're in a protracted drawdown or are overtrading and they tell you to stop...   Click here to get your free copy of The Inner Voice of Trading audiobook

Subscribe to the show You can count on "the other guy" to do the wrong thing most of the time. Click here to get your free copy of The Inner Voice of Trading audiobook

Subscribe to the show   So let's say you get five signals. You don't know which one to take. Will you take all of them with the requisite amount of risk that you're willing to take, then you let the market activity unfold. The market will tell you which one's going to be the best one. You can count on it.   So if you're taking it home with you, you have your protective stops, whether you're tradin...

Subscribe to the show   Focusing on your process can keep you placated as we said yesterday.   It can also help you improve your attitude.   When you're not chasing your tail or going outside the boundaries of your trading rules, you're conserving a great deal of energy.   When you don't react, you develop of quiet sense of confidence about you.   It doesn't mean you're infallible, but you're in c...

Subscribe to the show   Focusing on your process can keep you placated.   It can also help prevent you from getting too emotionally invested in an outcome that you don't have any control over.   This is good advice and something that can help in life also.   We talked about having an expectation about a trade that you've been stalking for several weeks.    One where you saw the set up a mile away,...

Subscribe to the show What parts of your process can you delegate and even improve your results? You can learn to trade and make money without being there. Click here to get your free copy of The Inner Voice of Trading audiobook .

Subscribe to the show You can spend weeks stalking a chart and have the set up work perfectly, only to have the name reverse, sometimes in the same day. You put all this work in and the name doesn't have the common courtesy to go up... How do you feel about that? For some of you, it can lead to disappointment or anger. If that's the case, you can sometimes become derailed and trade on those emotio...

Subscribe to the show It happens from time to time that you make a huge win.   You should celebrate it and understand that they don't happen all the time.   Many traders will intuit that they are "on to something" and without any thought, start to trade larger.   They also start trading names or asset classes outside of their core ability.   Plan to grow methodically and not get to invested in the...

Subscribe to the show   What does trading mean for you in your life?   What do you want your money to do for you?   When you know the answer to some of these type of questions, figuring out the best asset class and trading style will be easier.   Know and master yourself first, then figuring out the trading part is much easier.   Click here to get your free copy of The Inner Voice of Trading audio...

Subscribe to the show   Attitude is the one thing that I can't teach you.   I can help you change your paradigm and that in turn can help you have a good attitude.   However, you're going to want to do the work.   Sometimes attitude can carry you when nothing else is working. According to General James Mattis, to the "USMC, attitude is a weapon system."   Think about that for a minute...   How do...

Subscribe to the show   If you know someone who trades across asset classes and trading styles, they are likely gambling.   A person becomes the casino when they stick to one asset class and one style of trading, and get that down cold.   Making predictions, fading the Fed, and fighting the tape are all examples of gambling.   Tell them to keep their opinions to themselves and focus on getting goo...

Subscribe to the show   Many traders learning the craft are governed by the need for success for public purposes.   Some like to peacock.   Some are just flat-out greedy.   You'll make a more progress sooner if you're clear about what your motivations are.   In the end, consistent behavior predicts where you end up in life, not throwing around size trying for hero trades.   Click here to get your...

Subscribe to the show A trader can gun for 100% RoR, but at what cost? You need to conjugate what you're doing with risk (and time). Your open trade equity shows allocators the risk that you're taking for the returns your endeavoring. Most allocators are looking at daily vol and risk-adjusted returns. If your ethos is to chase hero-sized returns, you have to know that those are often a result of g...

Subscribe to the show Commodities are cyclical whereas equities are secular. You can take advantage of that cyclicality by trading seasonally or by trading commodity spreads. When you combine that with good risk management and maybe some trend following tactics, guess what happens? Click here to get your free copy of The Inner Voice of Trading audiobook .