Trader Mindset

You enter and exit the market with stop orders. No need to be anal and use Limit orders - they make the order less liquid. Your goal is to let the market come to you. Trading otherwise is impulsive. Love yourself and stop looking at 10 minute bars. There's nothing material there. Trading is about making money, not the action. Buying and selling is not trading. Sometimes the best trades are ones yo...

Timing has as much to do with your success as does your trading process. Just because you have a system, does not mean that you will begin harvesting cash. The markets must be amenable and compatible with the rules that you are going to deploy. This is true if you are a credit option trader also. Selling option premier doest not mean you will keep it. Monte Carlo your system to see how it would ha...

You need to monitor your mental health, your amount of sleep, and your diet. Don't be afraid to take a mental health day to reset. This is a marathon, not a sprint.

You are responsible for all your success and failure. That type of integrity will need to manifest in how you handle money - your money and your client money - your investments and your trades. Until you backtest, you don't know your numbers. You need to know the expected value of a trade. You need to know what the probability is of your risk of ruin. You can't get this without a simulator or back...

The sum total of all your trading activity will accumulate in your track record. You can be successful and be making a great deal of money right now, but you still might not be a good fit for a particular allocator. I know a few traders with 20+ years who cannot get big allocations in today's environment b/c their results are too volatile. These traders have their own models and have been trading...

With options you can bet where you think something is going to go and also where it might not. You can backtest and simulate option strategies for outright directional trades as well as multiple option positions. This includes butterflies and condors. Love the VIX? Don't fall in love... You can create a vol trade around any instrument and perhaps better manage your risk. Tony Saliba's new book sho...

Trading Tribe The is a variance between what you think, what you know, and what you feel. Thoughts are creative, knowledge can relate to intelligence, and what you feel is emotional. Your emotions effect your judgement, your judgment effects your behavior, and your behavior effects where you end up in life. We didn't talk about stocks or commodities in the Incline Village Trading Tribe. We didn't...

If you subscribe to get NYSE data, you literally get everything that trades there. You're not likely going to need all those names running through your simulator. I removed all the nonsense that I knew I didn't want to be in. I called that process "raking the data." I removed the following from the data feed: -stocks below $20 per share -stocks above $100 per share -shares with less than 1 million...

Use equity pairs trades to stay in trades longer. If you are trying to increase your holding time but are scared, you can buy one long and sell another short against it. Ideas to Test Look at the strongest equity sectors from a relative strength standpoint. You'd buy the best name long and sell the worst short. You are looking for the long to outperform the short. This is a relative value trade. I...

Human beings are emotional beings. We all have emotional systems. If you are not connected to your emotions, you are likely to see them emerge when you are under the pressure of trading. A system is a set of rules that you can follow. After you get the system generated order, you have to enter the trade into your platform. That's where the fun starts. The Trading Tribe was set up by Ed Seykota to...

Discretionary chart reading is problematic as you can't backtest it and calculate the expected value of a trade. Only trade set ups (the combination of entries, exits, and position sizes) that have positive mathematical expectation. Get a simulator and backtest your trading ideas to find the expected value. The software I spoke about in an earlier episode will do the calculations for you. Expected...

The Average True Range (ATR) is a measurement that professional traders use to adjust their position sizes to normalize risk across all instruments. Normalizing risk allows you to look at Gold the same way you look at Sugar or AMZN for that matter - they are all the same percentage risk to your portfolio. Don't make the mistake of trading with "tiers" as no one optimizes their trading for the numb...

Don't write covered calls. Don't come up with a strategy on the fly. You need to know the math before you put the trades on. Backtesting does NOT predict the future, but it gives you an idea how the idea(s) would have worked out over the last 20 years. What is past is prologue, but at the same time history rarely repeats itself the same way. I encourage you to backtest b/c you can use the hypothet...

I don't trust stocks. Commodities are so much more reliable. David Stendahl - Signal Trading Group   Moore Research  

You have to backtest at the portfolio level - not one security at a time. Simple models are best. If you are testing on Trade Station, you can only test one idea and one security at a time. That might lead you to try 45 indicators or studies onto the name - that's your ego talking and you'll not likely have the same scenario show up the same way they more overlays you have. Again, simple is best....

Entries don't mean anything unless you know your exit and position size. Entries are just prices. Entries, exits, and a position sizing algorithm are the 3 crown jewels to a basic trading system. Don't look at intraday charts - they are worthless and contain the most random data compared to Daily, Weekly, or Monthly charts - in that order. Trading is a game of failure - like baseball. You simulate...

Michael Martin follow-up with many of the questions with a more detailed context than is possible with 140 characters.  If you don't know who you are, any strategy will look good to you - and that is perilous for new traders.  The StockTwits AMA stream has been published at Medium if you'd like to read some of the questions.   

Michael Martin speaks with trading expert Pete Renzulli. Over his career, Pete has held many roles across his trading career. He discusses how he developed his trading edge in this funny and insightful discussion. 

Michael Martin reads and ad libs off an article he wrote for MartinKronicle.com. The post is on how traders and PMs can raise money from investors and allocators. 

Michael Martin speaks with Cornelius Luca, foreign exchange expert. Topics include Brexit and European elections. 

Michael Martin speaks with former CFTC Commissioner Chilton. Topics include position limits, Dodd-Frank, and disgraced FCM heads Corzine, Bennett, and Wasendorf. 

Energy Analyst Brynne Kelly speaks with Michael Martin about the fundamentals of the crude oil market. Brynne puts out daily market analysis on the crude complex and has several decades of experience dealing in the physical crude oil market. 

Michael Martin answers a questions sent to him via Twitter, "Besides Sugar, what are your 3 favorite markets to trade?"  This podcast is the answer.