| What makes the best traders successful? Are | | | | probabilities, that any trading system is |
| they "lucky"? Have they discovered some | | | | designed to provide a positive bias over the |
| "secret" indicator? No. They've learned the | | | | long term, then all you have to do is execute |
| truth about trading. Trading success is a | | | | the plan. So what is it that prevents you |
| simple as 1-2-3. | | | | from being successful? You. |
| | | | |
| Step 1 - Understand what trading is really | | | | Or rather, the emotional you. |
| about; | | | | |
| | | | You need to work on developing the mindset of |
| Step 2 - Learn what a winning day trader | | | | a professional trader. Try this routine for |
| does; | | | | 30 days and see how you go: |
| | | | |
| Step 3 - Then do it. Continually. | | | | BEFORE: (At the start of trading day) |
| | | | |
| 1. The Essence Of Successful Trading | | | | Step 1 - close your eyes, and remind yourself |
| | | | of the truths of trading: "Trading is all |
| Trading is all about percentages. You enter a | | | | about probabilities". Write this on a yellow |
| trade because you believe that it's more | | | | Post-It note and stick it to your monitor. |
| likely to succeed than fail. The job of | | | | Permanently. |
| finding favourable trades goes to your | | | | |
| trading system. There are numerous books and | | | | Step 2 - Mentally see yourself following your |
| courses about trading systems. The actual | | | | trading plan. Entering a trade on signal. |
| trading system you use is beyond the scope of | | | | Exiting at the right time. Trading the right |
| this article, but please, please, understand | | | | size for your account. |
| this: If you're searching for the perfect | | | | |
| trading system - you know, the one that | | | | Step 3 - Visualize each trade as a tiny part |
| delivers profits on demand - you'll be | | | | of a big picture. You might want to visualize |
| searching until the end of time. | | | | it as a matrix, with 100 boxes. Each trade is |
| | | | unimportant compared to the overall scheme. |
| Successful trading is simply a game of | | | | Create your own image for this. (Your own is |
| probabilities. Does that disappoint you? Were | | | | best.) Trading is a visual process. The point |
| you hoping for something a little more | | | | is you need a visual metaphor to distance |
| intellectual? Do you know how many academics | | | | yourself from the immediacy of real-time |
| - doctors and lawyers particularly - lose | | | | trading. Anything. |
| fortunes in the market each year? The | | | | |
| positive bias comes from your trading system. | | | | DURING: (When in a trade) |
| Our advice is keep it simple. Find a system | | | | |
| you're comfortable with. Know the setups. | | | | Step 1 - Physically relax. Remember the |
| Understand why and when you enter and exit. | | | | definition of emotion? "A physical |
| Then stick to it. | | | | disturbance." You need to reduce emotional |
| | | | power as much as possible. Prevent it from |
| Sure, some trading systems offer a higher | | | | creeping up on you, and doing something |
| profitability than others. But don't get hung | | | | silly. So you don't feed it. Relax. Be aware |
| up on it. Just don't get too caught up on it. | | | | of your whole body. Remember the last time |
| The real determining factor is your ability | | | | you got stressed. What did it feel like? |
| to follow it. | | | | Tense shoulders? Stomach muscles tightening? |
| | | | Relax those areas now. Know thyself. |
| 2. What Makes A Successful Day Trader | | | | |
| | | | Note - none of this suggests that you should |
| A successful day trader is someone who | | | | be slow about entering or executing trades. |
| follows a trading plan. Your trading plan | | | | Quite the opposite! In real-time trading you |
| tells you when to enter a trade, and when to | | | | must be fast. But you are operating from your |
| exit. An entry point. An exit point - either | | | | rational, thinking mind... and not the |
| a target or just to get stopped out. | | | | panic-induced animal mind fighting for |
| Parabolic SAR, lower bollinger, natural | | | | survival! |
| support and resistance, volatility stop. | | | | |
| Whatever. | | | | Step 2 - Breathe! Some traders stop breathing |
| | | | completely in a trade! Breathe in slowly for |
| Any trader must understand the timeless law | | | | a count of four, hold it for four, and |
| of probability. That with a positive bias and | | | | breathe out for four. |
| a sensible approach to money-management | | | | |
| (cutting your losses and letting your profits | | | | Step 3 - Focus on yourself. Following a |
| run), eventually you'll come out ahead. | | | | trading plan is a "no brainer". You enter. |
| | | | You trail a stop. You exit. Self-talk helps |
| What makes day trading so challenging is the | | | | stay in the state. Remember that when you're |
| speed. You simply execute trades faster, and | | | | watching the price in real-time, there's a |
| compound your profits faster - which is why | | | | tremendous danger of adding emotional fuel to |
| we do it. | | | | a simple situation. Watch how you're feeling. |
| | | | Observe any tension and let it go. |
| That's why a day trader is NOT a | | | | |
| stressed-out, valium-swallowing, adrenaline | | | | Step 4 - Watch your language! Words affect us |
| junkie who lives from one minute to the next. | | | | profoundly. Ever had someone scream at you? |
| | | | Stirred up lots of emotion, didn't it? So |
| A good (i.e. profitable) day trader knows | | | | don't scream at the market. Speak calmly. |
| that it's just another trade. It's all just | | | | Commentate on what the market's doing. Speak |
| statistics in action. | | | | out loud. "The current trade began at hh:mm, |
| | | | the system gave a buy signal at price level, |
| The important point here is consistency. Like | | | | the target is with a stop at.. Stop loss was |
| the heads/tails example, the one time you | | | | moved to break even at as per the plan... The |
| don't take a trade is when the market takes | | | | market is currently in trading range between |
| off and never looks back. Day trading is | | | | x and y..." |
| boring. Keep it that way. | | | | |
| | | | All this helps you to stay objective. Also, |
| 3. How To Develop The Day Trading Mind | | | | avoid "what if" thinking. Creativity has no |
| | | | place in trading! Be mechanical. Beobjective. |
| Every time you sit down at your trading | | | | |
| screen, remind yourself that "trading is | | | | Step 5 - Continually remind yourself of what |
| statistics in action". Nobody knows what the | | | | successful trading is. See the current trade |
| market is going to do next. It's a law unto | | | | as just another trade. on just another day. |
| itself. You follow what works "most of the | | | | Your job is to follow the system -- |
| time". | | | | professionally and without emotion. With |
| | | | practice, you truly won't care whether the |
| When you understand that trading is about | | | | current trade turns a profit or a loss. |