Trader Mindset

You are powerless over the markets, regardless if you have 30 years of experience or only 30 days.  Focus on your process, because you can't control the outcome.  I believe you need to have positive intention about your trading as "intentions equal results."  Your intention is closely related to your attitude and your attitude affects your judgment, judgment affects your behavior, and behavior pre...

In this episode, Michael Martin has a frank discussion about what you need and what you don't need at the beginning of your career.  In one sense, your job is to survive. That means going slowly and playing superior defense.  Many traders keep a full-time job to make sure they can pay their bills before going solo. 

Michael Martin discusses the "triumvirate" that every trader needs to succeed long-term trading the markets. 

In this episode, a reader asks Michael Martin about some of the markets he's trading. 

Most allocators know that you are powerless over the markets. But if you tell them the markets you trade, they'll have a good idea of where your performance should come from. 

Be mindful of all your trading activity and non-activity. Growing too slowly can be problematic, but so can growing too quickly. 

You don't have to double your position to have added to a winning trade.  Try adding 20% to see how it feels.  For best results, you'll have to backtest in a simulator to determine the best location and position size for adding to your winners.  If you believe, like I do, that most markets don't trend and that trends persist, this might be a good tactic for you to look at. 

The hardest part of investing (and trading) is knowing when to take profits. In my trading, I'm using systematic exits. Harder, is when I have a long-term buy and hold in my investment portfolio and I have to let go of a name that I've had for ages.  See the corresponding video on Disney. 

You can create some interesting spreads between weekly and monthly option expirations. Some traders buy the longer dated options and sell nearer expirations to pay for them.  Get the MartinKronicle Android App - it's free.

There are traders whose sole responsibility is to create alpha in only one sector or in one commodity group. Sometimes, it might be in just one contract such as natural gas, for example.  Since most markets are not trending, focusing on one sector can be a challenge if there is no direction or trend. Unless you've been trained... These particular traders have learned to make money in natural gas r...

I don't believe there is anything that can be called "advanced trading." Most of the time that I see that expression, it's in marketing literature.  The best trading rules that make your money are easy to understand and simple to execute. Words like "advanced" are there to feed your ego.  My take is that if a trader has a strong sense of self, then finding the right trading methodology is easy (or...

There were times when I invited huge vol to my portfolio. It would run up 20% and then dive-bomb to -20%...that's intraweek! The portfolio comprised of outright directional trades including long/short futures, debit option trades, and long stocks.  What I found over time though, was that all this ebb and flow created an equity curve that looked like a heart monitor. I had to find a way to create p...

Frustrated about your trading? Maybe you're fine right where you are and you just have to accept "what is" and take life on life's terms.  I see this a lot in traders who always want to be somewhere else when they are doing fine right where they are. If this sounds like someone you know, listen in...

In this episode, Michael Martin discusses the evolution of your trading rules and system design.     

Although it takes a bit of time and effort, building a systematized set of trading rules is worth it in the long run. Instead of reading charts to come up with trading ideas subjectively, each evening you'll run your trading rules to generate orders which you'll enter the following morning.  In this episode, Michael Martin recounts how he developed his original model and how it evolved into what h...

Start with long-dated Call options and turn them into a Bull Call spread by selling the upper strike when the underlying reverses down. Cover that leg when the vol crashes.  You can create other structures too, such as condors or butterflies all based upon a core holding of long dated calls. 

If you put every dollar you have to work, you don't give yourself any room when Murphy's Law kicks in.  If you keep some dry powder, you'll be able to able to withstand some shocks to the system, as well as have capital to deploy when something falls into your lap.

Michael Martin interviews options trader and portfolio manager Hari Krishnan on the current environment and how traders can position themselves with options to capture greater profits.  Krishnan is the author of The 2nd Leg Down: Strategies for Profiting after a Market Sell-Off. 

Crypto investing is missing some key components that an investor's are used to in trading equities, options, and futures.  In this episode, Michael Martin discusses what's missing and why you should measure 8 times and cut once in the crypto space. 

With the likelihood of the fed tightening, investors who rely on certain instruments for income are in a tough spot. They can use options to transfer the risk and hold their current positions.

Key inflection points can happen with the fundamentals as well as the technicals. 

I've seen too many traders try to trade something on a hunch because they thought earnings were going to be a blowout. It's much more complicated than that.  There's the EPS, top-line growth, expenses, one-time charges, and forward-looking statements that get reported.  I've seen companies beat by $0.02 per share, but the forward-looking statements are bearish or cautious and the stock sells off. ...

If you believe the adage that "good trading is boring," then system trading is boring to the nth degree.  There are days, sometimes weeks, that I don't generate an ORDER, never mind a trade. Then there are times when there are so many orders, you have to write them all out first in a general ledger and number the tickets.  On the flip side, system trading is also very peaceful because I'm able to...

Focus on your process and stay out of the results - you're powerless over them.  All you can do is control the "controlables" - that is, your behavior.  

Seasonal commodity spreads can be very a reliable type of trade for your portfolio. While commodities are surely not for everyone, commodity spreads are considered "hedged" because the trader is simultaneously long and short the same commodity but in different expiration months.  A great source of information on spreads is at Moore Research Center. You can find them on the internet at www.mrci.com...