Trading Station

INCREASE YOUR DISCIPLINE

    During the time my great uncle mentored me, he did not teach me how to trade. He was adamant that I had to learn that for myself. Mostly he taught me how to maintain discipline and self-control. He was a very strict disciplinarian, and I was a wild hare -- much in need of both discipline and self-control. He informed me right at the start that I would learn how to trade by trading, and not by trying to do what he did. He laid the foundation, but I had to build on that foundation.

    You will find one thing that is fairly consistent with winning traders: they are self-disciplined. They control their impulses and feelings, and this allows them to execute a trading strategy with ease and perfection.

    I have heard many times about Jesse Livermore and what a great trader he was. But in my estimation, and that of my uncle, Jesse Livermore was a colossal flop. He was not someone whom I would want use as a model for how to conduct a trading business. Livermore was undisciplined, wild, and out of control. He ended his life broke and committing suicide. Is that what you would consider greatness?

    The disciplined trader is decisive. The undisciplined trader, in contrast, wavers. He or she may stick with a trading plan occasionally, while going a different way at other times. Discipline is indeed a key ingredient to success, but not everyone has a high level of self-discipline. It's worth determining where you stand on this trait and, if you lack discipline and self-control, work to build it up.

    Discipline and self-control are well-studied personality traits. Some people are highly disciplined and very self-controlled. They scrupulously follow rules, and are careful to control their impulses. You know the type; they pay off their credit cards every month, are never late for an appointment, and carefully plan every detail of their lives.

    Although these characteristics may be ideal for trading, there's a downside: such people tend to have trouble taking risks. They prefer a sure thing, and trading outcomes are rarely sure things. I have found that winning traders tend to prefer living a little on the wild side. They may not recklessly seek out risk, but they don't mind it. Relative to the "discipline freak," they tend to lack discipline and control, but not to the extent that they endanger themselves.

    Perhaps that's why so many trading books and coaches find it necessary to preach the virtues of self-control. How is your discipline and self-control? Do you have trouble sticking with your trading plan? Do you long for more discipline and self-control when it comes to your trading? If you have trouble with discipline, you may want to try a stimulating exercise to increase your awareness: observe your level of self-control in your everyday life, and try to gain more control. How much discipline and self-control do you practice in your everyday life? Are you late for appointments? Do you spend more money each month than your budget allows? Do you frequently find yourself breaking promises?

    It's not necessarily the case that a disciplined trader is disciplined in all aspects of life, but it helps. The life strategies we use in everyday life may bleed over into our trading life. If you often overspend, overeat, or have an unrestrained need for pleasure, you may find maintaining self-control and discipline while trading a bit more difficult than do others. So try this exercise: spend a few weeks trying to control as much of your life as possible. Pick specific areas in which you can gain more self-control. Control your caloric intake, the money you spend, and/or time spent in leisure activities or some other area in which you see a need for strengthening yourself. See how well you do. It may change your reference point. You may soon discover that you rarely control your impulses, and you can do much better. And this, in turn, may positively influence your ability to stick with your trading plan. It's worth trying. Discipline is the key to trading success, and it's vital that we do everything we can to increase it, but we must also maintain balance between the optimum amount of discipline, and not enough or too much discipline.

No meu tempo vi um filme " A Grande Descida " (de skates - que adorava)

Agora em versão de market:

IF YOU HAVE A PLAN, STAY WITH IT

    Traders often tell me they have trouble sticking with their trading plan. There are many possible reasons. One common reason is not having a clearly defined plan. When a trading plan is not clearly defined, it's tough to follow and easy to give up.

    When you trade without a solid plan, you might panic at the wrong moment. You may be prone to over-thinking your plan, or you may become easily consumed with self-doubt.

    When you clearly define a plan, you can implement it more easily. You can enter and exit with less effort. Many traders say that even when they carefully develop a detailed trading plan, they still have difficulty following it. Depending on your personality, you may or may not have difficulty maintaining control and discipline.

    Even people who are usually controlled and disciplined in everyday life sometimes tend to have trouble sticking with trading plans. Disciplined people are rule followers, and I have found that rule followers prefer certainty. However, anyone who has traded the markets for even a few months realizes that the markets are anything but certain. Normal wisdom seems to work only sometimes. Markets are true only when they decide to conform to normal thoughts and ideas, and the rest of the time they go where they want to go, in spite of all your planning.

    As it turns out, people who are more impulsive in everyday life have less difficulty following a trading plan. They view trading as a "game," and they enjoy risk. They have a natural, carefree attitude when it comes to trading. In a sense, they just don't care. They can easily think, "Why not follow a plan? It doesn't matter if it goes awry." This kind of thinking is useful for a trader.

    Most traders, however, have trouble approaching trading with that carefree attitude. For example, they may see the price rise initially. But then it stalls before reaching their predefined exit point. They think, "How much longer can it go up? There aren't enough buyers. I can't wait. I've got to sell and lock in my profits right now." When they get to that point, they start thinking, "Don't be greedy. How can it be a bad thing to get out early and take a profit?" At that point, it's hard to stay in the trade. I ought to know, it happens to me all the time.

    But it's really important for trading success to stick with the plan. It is a matter of simple mathematics. Although there may be several profitable trade setups out there, finding one is relatively rare. You'll see many more setups that don't work out than those that actually do. When you hit upon one, you must capitalize on it and optimize your profits, getting as much out of the trade as possible. Otherwise, in the long run, your winners won't balance out your losers.

    If you are a natural born risk taker, sticking with your plan is less difficult. Risk takers get a rush from the trade and can't wait to see what happens. The psychological rush is more enjoyable, in some ways, than the outcome. Most people, however, are naturally worried about the outcome of their trades, and a little cautious voice nags them to get out of a trade before it reaches their objective. How do you quiet the voice of caution? It's really hard to do.

    One thing I've discovered is that I am more comfortable and able to stick with my plan if I set very moderate objectives for each trade. That way I get a high percentage of winners, and my success comes from "nibbling" the market, taking small and reasonable amounts from a high percentage of winners.

TRADING CAN BE BORING

    Many people have heard me say that trading can be boring. They tell me they wish they could be bored like me.

    Interestingly, these days, few traders find it profitable to scalp or trade intraday anymore. Increasingly, traders seem to prefer to make swing trades, but swing trading, too, can be boring at times. Depending on your total capital, it is hard to make too many swing trades and also limit risk. You can make only a few trades, and then you usually must wait at least a few days before you can take any action. Assuming that your trade setup isn't completely wrong, it takes a little time to find out what happens. All you can do is execute a trade, or a few swing trades, and wait. (By the way, they used to call swing trading "Position Trading;" I just thought you'd like to know.)

    It takes a certain kind of trader to swing trade - a patient trader. A scalper, for example, wants to get in and get out. Waiting patiently is hard. It's an uneasy feeling. Nevertheless, there are patient scalpers and there are impatient swing traders.  It certainly comes down to a matter of finding your best fit
    .
    It's impossible to put traders into little compartments and call them patient or impatient.  When I'm day trading, I am almost always a scalper, but until I see the trade I feel very sure of, I will let lots of trades go by. Once I see the trade I want, I become very impatient. However, when I'm trading options, I am the picture of serenity. I can wait for days to put together all the legs of a three-part option trade.

    Some traders may like to put on trades for excitement, and they just can't wait to see what happens. In the meantime, the waiting is agony. It can be tedious waiting to see the outcome.

    How can you fight the boredom? Depending on your personality, it is wise to have a plan to fight boredom; otherwise you may try to seek out excitement, and that for some traders may mean making impulsive decisions instead of letting your trading plan reach fruition.

    Some people are natural risk takers, and get bored easily. They may have difficulty making swing trades because there isn't enough excitement or action. If you fall into this category, you may be likely to close out a trade prematurely because you just can't wait to see the outcome. If this is the case, you may want to work around the problem. Unless you have a large account in which you can put on many trades and still manage risk (by risking a relatively small amount of capital on a single trade, for example), you can't make very many swing trades. It may be wise in this case to put in a stop loss order and just commit yourself to waiting a few days before taking any action. Once the stop loss is in place, you may have to just walk away for a while. If you continue to watch the screen, it will be much like staring at a slot machine and trying to avoid pulling the handle. It's like dangling a piece of candy in front of a child. It is hard to resist temptation. You must walk away for a while, and find something else to do. This may be a good time to pursue other ways of making income, or you may want to develop new trading strategies or read trading books. For some people, even this indirect way of trading may continue to be a temptation. It may be necessary for them to walk away from the trading arena entirely to pursue other activities.

    Don't take boredom lightly. We are bored when we feel that the task we are doing is not interesting. Our minds require stimulation, and when we are not stimulated properly, we seek out stimulation. If you feel bored yet continue to trade, you are naturally going to want to find stimulation. That may compel you to overtrade just to get some action. The problem with putting on trades just for fun, though, is that you are likely to lose money in the long run. You'll take low probability setups just because you want to put on a trade. It may be hard to fight the temptation, but it doesn't make sense to put on trades that are unlikely to yield a profit. If your capital is tied up in a few key swing trades, it is wise to just leave it there and not risk any more money. Find something else to do while you wait. Spend time with your family. Get a part-time job. Run errands. Do chores around the house.

    Keep in mind, the perk of trading is that it is possible to put on a few swing trades and spend the rest of your time doing something else while you wait. That's why many people pursue trading. Once you master it, you don't have to work exclusively as a trader. You can do other things while you wait for an outcome. So don't let boredom get the better of you. If you are bored waiting to see what happens in a swing trade or longer-term trade, walk away for a while (but don't forget to use the automatic settings on your trading platform). Take a break and relax. Don't let boredom drive you to make impulsive, spur-of-the-moment trades. Stick with the swing trades you have planned well. You'll be more profitable in the long run.

Here's what I believe:

1. The markets are not random. I don't care if the number of aca¬demicians who have argued the efficient market hypothesis would stretch to the moon and back if laid end to end; they are simply wrong.
2. The markets are not random, because they are based on human behavior, and human behavior, especially mass behavior, is not random. It never has been, and it probably never will be.
3. There is no holy grail or grand secret to the markets, but there are many patterns that can lead to profits.
4. There are a million ways to make money in markets. The irony is that they are all very difficult to find.
5. The markets are always changing, and they are always the same.
6. The secret to success in the markets lies not in discovering some incredible indicator or elaborate theory; rather, it lies within each individual.
7. To excel in trading requires a combination of talent and extremely hard work-(surprise!) the same combination required for excellence in any field. Those seeking success by buying the latest $300 or even $3,000 system, or by following the latest hot tip, will never find the answer because they haven't yet understood the question.
8. Success in trading is a worthy goal, but it will be worthless if it is not accompanied by success in your life (and I use the word success here without monetary connotation).

In conducting the interviews for this book and its predecessor. Market Wizards, I became absolutely convinced that winning in the markets is a matter of skill and discipline, not luck. The magnitude and consis¬tency of the winning track records compiled by many of those I inter¬viewed simply defy chance. I believe the Market Wizards provide role models for what it takes to win in the markets. Those seeking quick fortunes should be discouraged at the onset.

Chart

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Gráficos EOD ou RT

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Be vigilant, guard your mind against negative thoughts.

~Buddha

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