Article: Thoughts about Full Time Trading
If you are serious about trying to become a successful full time trader, I offer these comments. If not, stop reading. It will be a waste of your time.
It takes a special mental intelligence and ability, as well as a burning desire, and personal discipline to become a successful trader. You can have the best trading template, software, and platform in the world and still may not be successful. Why is that? It is almost always the temperament and control of your emotions that determines your destiny. Everyone needs to work on and improve/change this personal situation to eventually become what they want to be in trading. Trading discipline is born from emotional control. Usually traders are their own worst enemy. That, coupled with their trading environment that is. Trading environment is critical to success, but not as critical as the control of one’s emotions. You must gain control to be successful. There is no substitute for this control. Nothing you can do to offset this deficiency will help. How do you know if you are “out of control”? Trading the “money” is probably the most universal tip off that you are out of emotional control. The lack of ability to stop trading when you are losing is also a good indicator.
How do you control emotions? Simply by trying to develop patience and making your focus the system and not the end results of your trading actions. Stay immersed in the present. In other words, stay immersed in the process of trading. Reading the charts, the indicators, the momentum or lack of it in the market. That’s the way you communicate with the market and overcome emotional urges. Do not try to outguess the market. Stay away from “outcomes” or as I call it “what if” thinking because that destroys your objectivity and focus on what’s important and creates negative thought processes. If a golfer focuses on whether or not he will make a three foot putt and the consequences of missing it instead of the process involved in making the stroke required to have a successful outcome he will surely miss that putt. He places a huge monkey on his back by worrying about the consequences of making or missing that putt. Especially if there is pressure to make the putt such as a double or nothing bet, carrying his share of the load in a two man team event etc. The same thing happens in trading except that there is usually much more pressure associated with that activity. It can be almost a life and death situation if you allow it to become that. This “outcomes” or “what if” thinking causes you to lose your focus on the really important things that will help you be successful. What’s important is the step by step process of trading. It really is as simple as that. At least it was for me. Once I gained that perspective on approaching the market, I had the control I needed and things started to get better. Just remember the only thing you can control in trading the market is how you react to the things you are seeing. Control of your emotions is critical in reacting in the correct manner to what you are seeing.
Let’s get personal here. I had a non supportive family (my wife hated me trading), a small account, and a lot of un-success to overcome when I started trading. Sound familiar? The only way I got out of it was to develop a resolve that I would be successful and disprove all the nay Sayers, no matter what. More importantly, I decided that I would gain a patient attitude and “slow things down” in my trading world. I adopted this concept of “slowing things down” from statements I saw from highly successful professional athletes and some teaching principles I used in teaching Leadership in Army service schools. When Pro golfers, Pro basketball players, and interestingly enough NASCAR drivers are being highly successful, it is like everything slows down and it becomes easy to see what to do and how to do it. Under the tremendous stress of combat, the same thing occurs when a leader is operating properly. It is like everything is in slow motion. With this concept in mind, I picked the AB to trade because it seemed to move slower than the NQ or ES. I tried to select methods and time frames (R100 and R75) that were slower paced in terms of signals. That would slow things down for me and allow me to gain control of my emotions and decision making processes. I got lucky. I found a great chat room where a man named Woodie showed me the way to remain calm in the face of adversity and that “a better trade was surely coming”. I also found a great software company called Ensign Software and was able to develop some fairly good templates that supported those goals. The main thing I did however was to make a conscious decision to grab my emotions by the throat and control them. I wanted to be in control of me. Simple as that. I would refuse to let anything or anyone deter me from that basic goal. It has worked, but every day is a new struggle to accomplish it. But once it has been done, the confidence is there that helps you do it over and over again. It never goes away, this quiet panic that most traders live with. You just learn how to control it. Do this one thing and it will be easier to gain the success you crave.
Article by Jay West
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Last modified 1/21/09 1:16 PM