There's a great interview with Mark Douglas, here that one of my students brought to my attention. It's really worth watching and thinking about. This blog entry is based on that video.
Once a trader has a methodology that gives a high win rate, the ONLY thing that he should do when he wants to put the trade on is ask WHAT DOES THE MARKET HAVE TO DO TO TELL ME I AM WRONG?
The one thing that he should not be thinking is WILL THIS TRADE BE ONE OF, say, the 70% WINNERS. There is no way that anyone can know how the sequence of 70% winners and 30% losers will unfold. Yes, we know that there will be 70% winning trades, but we cannot know whether the next trade will be one of those. THE TRADER SHOULD NOT EXPECT ANY PARTICULAR OUTCOME from any particular trade. All we must do is know how much we need to risk in order to find out whether the trade will be profitable or not. I teach my students not to try and cherry pick trades. If the picture fits my trade plan I must take it. Traders are not good cherry pickers. We tend to pick all the rotten cherries.
If you are unable to maintain your discipline in keeping to your trading plan then you must really be NOT ACCEPTING THE RISK. I teach my students to carry out a whole series of steps in order to achieve CP. All the steps are required in order for a trader to quantify, understand and accept the risk on every trade. Using dynamic trade and risk management based on a known trader's profile is, I believe, fundamental to achieving CP.
If you are not achieving your goals as a trader, look at this aspect of your learning. Once you can quantify, understand and accept the risk on every trade in accordance with a discovered trader's profile, the whole world changes.
Sad news from Bearded Ben Bernanke today: he doesn't expect the jobs situation in the U.S. to get back to normal for 4 or 5 years. I am holding my breath that the recovery continues without job recovery. More people are trying to become traders, especially those over 50, as a way of earning a good living. As small traders, we wait for the "they" to move the market for us and we just grab their coat tails for the ride. Our job, as I have said many times, is to learn a methodology that enables us to see that activity.
Videos of part of my day are back starting on Monday unless something happens. They let me explain trades better than just a pic. They won't be every day, but as often as I have the puff.
If you are unable to maintain your discipline in keeping to your trading plan then you must really be NOT ACCEPTING THE RISK. I teach my students to carry out a whole series of steps in order to achieve CP. All the steps are required in order for a trader to quantify, understand and accept the risk on every trade. Using dynamic trade and risk management based on a known trader's profile is, I believe, fundamental to achieving CP.
If you are not achieving your goals as a trader, look at this aspect of your learning. Once you can quantify, understand and accept the risk on every trade in accordance with a discovered trader's profile, the whole world changes.
Sad news from Bearded Ben Bernanke today: he doesn't expect the jobs situation in the U.S. to get back to normal for 4 or 5 years. I am holding my breath that the recovery continues without job recovery. More people are trying to become traders, especially those over 50, as a way of earning a good living. As small traders, we wait for the "they" to move the market for us and we just grab their coat tails for the ride. Our job, as I have said many times, is to learn a methodology that enables us to see that activity.
Videos of part of my day are back starting on Monday unless something happens. They let me explain trades better than just a pic. They won't be every day, but as often as I have the puff.
No comments:
Post a Comment