Plan your Trade and Trade Your Plan.
Trade what you see, not what you think
Thursday, October 29, 2009
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Trading For A Living
World Famous
Cozumel , Mex
The Ultimate Ride
Trading In The Zone
What is the greatest risk you face in trading?
Is it loss of money?
Certainly, that's what most traders believe. I tend to disagree though. In my opinion we have something much greater at risk, that very few of us consider during the 'learning phase'.
The American political journalist and author, Norman Cousins, is quoted as saying,
'Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.'
Along similar lines, I would argue that loss of capital is not the greatest loss in trading. The greatest loss is what we lose from within.
Loss of funds is recoverable. Losses of self-esteem, self-belief, or passion for the process of trading, are not so easy to recover.
So, think about that next time you feel tempted to widen your stop, or remove your stop. Think about it before you enter your next impulsive, emotion based trade. Think about it if you're trading without a clearly defined trading plan.
If you suffer financial losses at these times, how will it affect your mindset? Will the losses that result from your amateur and undisciplined actions allow you to move forward to the next trade with greater confidence, or will they feed the forces of frustration, anger, depression and fear, further damaging your chances at consistent, confident and disciplined application of your trading plan.
Drawdown in your psychological capital is much harder to recover, than is drawdown in your equity balance.
So, manage your risk! Not so much to protect your finances, but in order to protect your much more valuable psychological capital.
Your whole trading future depends on it.
Is it loss of money?
Certainly, that's what most traders believe. I tend to disagree though. In my opinion we have something much greater at risk, that very few of us consider during the 'learning phase'.
The American political journalist and author, Norman Cousins, is quoted as saying,
'Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.'
Along similar lines, I would argue that loss of capital is not the greatest loss in trading. The greatest loss is what we lose from within.
Loss of funds is recoverable. Losses of self-esteem, self-belief, or passion for the process of trading, are not so easy to recover.
So, think about that next time you feel tempted to widen your stop, or remove your stop. Think about it before you enter your next impulsive, emotion based trade. Think about it if you're trading without a clearly defined trading plan.
If you suffer financial losses at these times, how will it affect your mindset? Will the losses that result from your amateur and undisciplined actions allow you to move forward to the next trade with greater confidence, or will they feed the forces of frustration, anger, depression and fear, further damaging your chances at consistent, confident and disciplined application of your trading plan.
Drawdown in your psychological capital is much harder to recover, than is drawdown in your equity balance.
So, manage your risk! Not so much to protect your finances, but in order to protect your much more valuable psychological capital.
Your whole trading future depends on it.
Posts
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2009
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October
(47)
- Profile Assessment and Outllook Into Next Week
- Another U-Turn in the Market
- Review Of Price Action
- Long Intraday Breakout trade ( ES )
- High Risk Long Position at this level?
- Both the SPX and E-Mini closed below the 50 DMA
- Short from 1088 and 1082
- Projections for the Downtrend
- The Clue was in the Pattern
- Real Long term View of Dow
- Long term View of Dow
- 4am Globex-SOLD 1082 E-Mini S&P500
- Existing Home Sales FALL in September 2009
- Long Term Tech Talk
- Limit SELL 1082 GTC
- Review Of Price Action
- SHORT Swing Position exited by the Bull Reversal
- Mini Miny Moe, Catch the Top and Let it Go, the be...
- Buy the Rumor, Sell the fact
- One Apple a Day....
- Wall Street Smarts
- Hurdles Remain for the S&P 500
- Dow 10,000! Uh Really?
- Target filled at 1078.50 for +13.75 Pts or $687.50
- E-Mini S&P500 ( ES )-SOLD 1092.25 at 8:25pm
- Market follow through as Expected last Sunday
- Picture Perfect SETUP
- Not a bad day-away from the desk....
- The 30yr Bond (ZB) retraced back up to Resistance
- Intel earnings pushed the market higher after the ...
- There is more than trading out there folks
- Trading EURO,Crude Oil and E-Mini S&P 500
- SETUPS are working like a champ today
- Good daytrading action today in three Markets
- Not a bad day for Intraday trading: + 7.25 Pts gain
- Another good day for the BULLS, while the BEARS ar...
- Tech Talk for the 30yr T-Bonds Futures
- Weekend Reading: Market Manipulation
- SHORT from 122-21 ZBZ9 30yr T-Bonds Futures
- Sell Signal In T-Bonds 30yr Futures as expected
- Another great day
- Swing Dynamics On The First Hour
- ES Emini trade set ups that anyone can do and follow
- Weekly Trendlines And The Trend
- Sell Signal In T-Bonds 30yr Futures
- Long from 1013
- Market Timing Strategy BUY Signal
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October
(47)
My Lifestyle
- TraderTopGun
- Fisher Island, Florida, United States
- Placed First in The Strategy Runner International Trading Tournament and First in the Surefire Trading Challenge. The fact that you haven't heard of me is no surprise. I have never been comfortable in the spotlight and have purposely remain "underground". I don't write books... I don't try to get on CNBC, and... I don't go from city to city doing "dog and pony shows" so I can sell a room-full of people my overpriced,untested, piece of crap, blinking light, "black box" software. I'm a trader,a Pilot and an amateur ocean explorer. Trading is what I love and do as a profession. I also enjoy teaching and helping other traders get an edge.
Still short, not sure why some traders are looking for a bounce. I see clear strength in the downward direction to reinforce trend. Staying short probably til close. If u request to follow me on twitter, u can see my tweets. I tweeted yesterday that I was shorting the close heavy despite internals. I might update their from now on since u got me thinking about it. Thanks for your insight, love it.
ReplyDeletephidog
Sold all my short positions at about 1:30pm E.T. Good job on your calls.
ReplyDeletephidog