Get good at one thing first and expand from there

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When I was coming up there was no internet nor mobile technology.

I had two sources of information: my older friends on the trading floors and the bookstore.

Today it must be a daunting task to know where to start or what to focus on – there’s too much information.

If you find yourself stuck or in a rut, I’d remove the inessential items.

With information being a click away, it’s both a blessing and curse.

Everything you’ll ever need to lookup is a click away.

However, you can end up chasing your tail and spending a great deal of time and effort on things that are interesting, but not beneficial to your development.

Get good at one thing first and you can expand from there.

And with that, I’d focus on longer-term trading and get good at that.

Once you have that down, try another asset class or another time frame and expand from there.

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How to simplify everything about your trading and become as successful trader

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Trading is too hard to be great at everything – you need to pick one thing and focus on it.

Most trades represent sub-optimal risks, so you should be eliminating as many names from your list as possible.

They all don’t represent opportunity, so delete them. (How does that feel?)

You can further simplify your risk management by using Stop orders.

They are the Swiss Army Knife of trading.

Focus on one asset class and one trading style therein.

Lastly, I would learn a longer-term trading strategy as there is more proof in the public domain that they work better than daytrading or short-term strategies.

You’ll be giving yourself more room to be wrong by trading smaller

You can learn those later but start with a longer-term strategy, get good, and build your confidence, and then work on the short-term tactics if you want.

There are more successful traders trading longer-term strategies than day traders.

Remember, the losers don’t show up.

They are out working other jobs now.

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What Stops Can do for you and your trading

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Systems don’t remove emotion from your body, but you can learn to trade methodically with some practice.

One way you can do that is to develop a habit of entering your buy stops above the market and let the market come to you.

In doing so, you can put yourself in the place of having to feel some strong emotions and concurrently NOT taking other actions.

Easy to write about, harder to do.

Do this long enough and you will be in effect systematizing your trades.

Do it even longer and you will have put yourself in the habit of solely following your rules and not sabotaging your trading.

At that point you can say that you’re very close to being a purely systematic trader.

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Growing into your optimal bet size

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There are a few reasons why you enter a trade in several stages.

You can keep your ego in check.

Or you might want to have a larger position on as a trend unfolds.

Adding systematically to your winners is a way of keeping your sense of greed in check.

You can test your ideas to see (and feel) what’s best for you.

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Why defense is more important that offense

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Amateurs and the uninitiated come to the market with dollar signs in their eyes and quickly find out that they lose more than then win.

In my experience they are initially drawn to the markets for the excitement and the promise of making money.

They think in terms of dollar signs, looking at the big dollar swings in names like TSAL, AMZN, and AAPL.

Professionals first try to uncover as many blind spots as they can and learn over time that survival in trading comes down to playing superior defense.

They think in terms of percentages and are promiscuous in what they trade.

If they can’t express their edge, there is no trade.

Protecting your capital is your primary concern.

If you have big loss, you’ll be angry, bitter, despondent, and about a million other things that aren’t part of a professional traders emotional vocabulary.

Two, if you lose big, you won’t have any capital to trade in the ensuing days, weeks, or months and this is a game of longevity.

This will lead to your shutting down emotionally.

If you lose your confidence, become a philanthropist – at least your can direct where the money goes.

It’s a marathon.

Know what you’re going to trade the day before and don’t sit in front of the computer screen all day.

Put your stops in and go away.

You can’t steer the market.

Whatever you’re trading is going to go where it’s going whether you’re watching it or not.

When you turn off the screen you have peace and free up enormous amounts of mental energy that you can use in other rewarding areas of your life.

Click here to get your free copy of The Inner voice of Trading audiobook.