Competence + Confidence = Having fun making money!
Competence and confidence are the two qualities that differentiate a successful trader from an unsuccessful one. Trading becomes fun when you have these qualities because it takes the stress out of trading. You’re no longer trading with your emotion so it is easier to take the right decision at the right time. That’s when making money start to be fun.
Of these two qualities, competence usually comes first because a trader will learn his system before starting to trade. Since there is a minimum of 50 good trading systems available on the market at any given time, you probably have in your hand a good trading system. Might even be a very good trading system. Why then, aren’t you as successful as you should be?
Because it is not the system, no matter how good it is, that brings success when you trade but the mental preparation. It is your mental preparation that will support you when things are not going as expected or even when things are going your way. It is your mental preparation that will bring the necessary confidence in your system so you will have enough patience to wait for all the ingredients of your trading plan to be in place before pulling the trigger.
Mental training is what you need to change poor trading habits into strong ones, no matter what timeframe you trade, what system you use, what markets you concentrate on.
Look, if you’re ready to make the transition from trading struggle to trading success, then THIS is the program to invest in…YOU… http://tinyurl.com/7mzbeqo
Norman Hallett, the Internet’s top authority on trading discipline, also penned a book that you need to have… and he’s just GIVING IT TO YOU! Norman’s written a terrific downloadable book all about reducing trading risk and really gives some great risk management and money management techniques that you can use RIGHT NOW to hike your trading results. You know how important risk management and money management are to your trading… but are you really applying them correctly… and to the fullest… in your trading? He’s just GIVING the book to you… complimentary…for just a day or two, so don’t hesitate and grab it.
It’s 71 Pages of MEAT. Whether you trade stocks, FOREX, options, futures or onds…Here’s where to go to grab a copy of “Taming Risk – A Trader’s Guide”… http://tinyurl.com/6pwq4xt
With Norman you are in good hands to discover what all successful traders have discovered: confidence is 90% of your success while competence is 10%. That’s how important your mental preparation is to your success.
That’s it for now.
Take care and have fun trading
Phil
What is a trading plan?
A trading plan is nothing more than your step by step way of analysing a chart before taking the decision to enter a market. In other words, a trading plan is your check list of things that need to be in place before you place an order to enter the market.
Said that way, it does not sound complicated, does it? Well it does not sound complicated because it is not complicated. Simplicity is the key word here.
Although, some markets seems to have been voluntarily made complicated, the simpler you are in your trading and the better off you will be and it all starts with your trading plan.
Let’s look at my trading plan so you can see what I mean by simplicity.
Phil’s trading plan (check list):
- Set up: this is where I apply my technical analysis method. Once in place, I start to ask these questions.
- Is the trend clearly defined? If not, what is missing?
- Have I been able to create a corridor for my trend?
- Do I see sub-trend within the larger trend?
- How many waves in my trend?
- Is the market sideways now?
- What is the rhythm of this market?
- What are the monthly and weekly chart indicating?
- Did I trace my trend breaking line? Is the market ready to go through it or is it following it? What is the angle?
- What does Fibonacci indicate? Is the market ready for a retracement?
- Does it worth countertrading with the retracement? Risk – Reward – Ratio
- Do I have my two arrows signal – blue and red? Are they in the same direction or opposite? Is MACD in convergence with my two arrows?
- Where are my entry and exit points? What is my risk? What is my reward? What is my ratio?
- Do I recognise a trading pattern (Blip – IVB – OVB)?
- Am I my ready to pull the trigger? Do I have all the information to place my order with confidence?
That’s it. It does not have to be more complicated than that.
This trading plan can be applied with any trading system and with any trading software. The set up might be different, the indicators might be different but, at the end, you still need to answer these questions before taking your trade decision.
Why having a trading plan is so important?
There are many important reasons why you need a trading plan but the most important one is that a trading plan takes the emotional aspect of trading out of your trading decision. How is that?
Like any other financial decision, trading carries its baggage of emotions and these emotions when not in control can do some damage to your trading. The trader’s motivation is making money and the three emotions that support his motivation are greed, fear and indecision, nothing else. We can easily say that greed drives the market up, fear drives it down and indecision drives it sideways. These three emotions are reflected in the market’s movement at all time.
But, how does a trading plan take the emotion out of trading? A trading plan brings a level of assurance, of confidence in our trading decision that overrule our greed and our fear of the market. With a trading plan, you know that your decision to enter in the market is supported by a number of indicators that all pointed in the same direction. You know that all your subsequent decisions (stop loss-target-exit strategy) will not be driven by emotions but will be based on rationality because there’re all taken care before entering the market.
Does this mean that we cannot be wrong when using a trading plan? Absolutely not, no trading plan is 100% successful. However, a good trading plan will bring peace of mind, knowing that you have taken a sound decision based on facts. If the market, for whatever reason, does not behave as expected you take the small loss and start looking for another opportunity to get back in the market: no damage done, no bad feeling. How do I know it is a small loss? That is exactly why you are using a trading plan, to limit your loss and maximise your wins.
That is what trading is all about: some you win and some you lose. As long as your winners are larger than your losers than you are making money so you are happy with your trading.
One last thing before I go. I did say that a trading plan takes the emotion out of trading. However, there is a very important quality that every trader needs to have when applying his trading plan: patience.
Patience is the one quality, the one emotion that you need to have under control when applying your trading plan. Patience will bring consistency and success to your trading. Once you have a good trading plan that has proved itself (practice, practice, practice) and you systematically apply it with patience then, you’ll know, that you are on the road to success.
That’s it for now. Take care and have fun trading.
Phil
What’s the difference between trading and trading successfully?
What differentiate a successful trader from a non successful one? The technical and mental aspects of their trading activities.
You see, trading in itself is relatively easy to learn. After all, trading is a mechanical activity and if you can read a chart you should be able to trade. Let’s take an example.
Two traders look at the same trading chart and according to what they see or to what their system is telling them, they take the decision to place the same trade. A week later, one of them is making over $1000 and is still in the market while the other one is losing $575 and is out of the market. Why is that? What went wrong?
Nothing went wrong; they both place their trade according to their trading system. However, one had a good plan in place so he felt good placing his trade and his Stop Loss while the other places his Stop Loss to feel good emotionally and got stop out. So one feel good before placing his trade while the other one try to feel good by placing his stop loss at a comfortable level.
You’ve seen this before or you’ve been through this before? I, for sure, when through this deception more than once and I can tell you: it hurts. Particularly when you see the market taking off on you and you’re not in and you don’t have the guts to get back in because you’re not so sure anymore. Sound familiar?
That is the difference between the successful trader and the non successful one. One is in charge of his emotion at all time and places his order with confidence and competence. The other one is driven by his emotion so does not take a decision on rationality but on fear of losing. He has a signal to enter the market but his stop loss is too close and he is out of the market with a loss. But both had a good system to start with.
You see, trading is not as easy as it look on paper. Many promoters of trading systems are trying to convince us that trading will be easy with their system because it is all automated or because their signals are 86% accurate, so if you follow these signals you cannot lose. What these people don’t say though is that it is not where you enter the market that count but how you protect yourself and where you exit that is most important. They don’t say it and few weeks later you wake up and you’ve just lost thousands of dollars and you are still questioning yourself on how could this happen? You have a good system.
If trading was easy, everyone would use an automated system of some sort and be successful. The reality is very much different. It is said that as much as 90% of traders are unsuccessful or have very limited success while 10% rake what the 90% leave on the table. Why is that?
Because trading successfully is not easy. It is not easy because you need to train yourself and to develop your own system. Any system on the market right now is not made for you; it is made for the market. It does not have you in it. It is you that have to develop the strategies that will make it a winning system.
Anyone that is telling you the contrary is lying to you. No matter what system, what signal this system generates, if you are not prepared (technically and mentally) to trading, the market will get at you sooner than later and the money you work so hard to save will be gone before you realise what happens to you. And because I don’t want this to happen to you, I want to share my experience with you so you can learn the easy way what I learn the hard way.
Although I have a good trading system in place to teach you the mechanic of trading, I cannot teach you the mental aspect of trading. There are people that specialise in this aspect of trading and, when time comes, I will point you toward these people. However, you need to practice to acquire the necessary experience to face difficult situations (there will definitely be some hard time in your learning process). There is good news to this though: trading is the only financial activity that you can practice (with real data and in real market situation) without risking any of your hard earned cash.
Moreover, I can shorten you learning curve a lot by preparing you to become a successful trader. This, I will do by sharing with you my experience as a trader. That in itself is invaluable, and that is my goal with BestOnlineTradindInfo.com.
Until then, take care and please don’t pay to much attention to those who are telling you that they have the best trading system to make you successful. They don’t, you do.
Phil
Are markets predictable?
Absolutely, all markets are predictable because markets are driven by emotions which, in term, translate into herd mentality movements stimulated by fear and greed. We can easily say that fear drives markets down while greed drives them up.
Trading being a visual activity, once we know that market tend to repeat their movement, we can apply technical analysis based on the search for repeated pattern within a graphic. Although you can use fundamental analysis to take your trading decisions, it is time consuming and hasn’t prove itself on the long run since, often, by the time you get the information for your fundamental analysis it is already accounted for into the market movement. On the other hand, with technical analysis what you see is what you get, so it can be a lot more accurate to develop a technical analysis system based on the real market movements.
When you apply technical analysis, you rapidly see what the market has to show and you can rapidly identify not only the patterns but also the rhythm of the market at which patterns reoccur. Seeing this will greatly enhance your capacity to identify high probability trades thence greatly enhancing your chance of success.
A good technical analysis will allow you to hear what the market has to say. Technical analysis not only shows what the market is doing but also where the market is in the development of its pattern. With a good technical analysis system, you can easily identify trends and where the market is within the identified trend. The same technical analysis system can be applied to any time frame chart being minutes, hours, days, weekly and monthly chart.
Technical analysis is your best key to know when to enter and when to exit a trade. When apply rigorously, a good technical analysis allows you to take a trading decision with confidence and without stress. Once your analysis is done, you will know everything there is to know before taking your decision. Although there is no guaranty when trading, within yourself you will know that your decision is based on solid information and if, for any particular reason, the market does not behave as expected, you’ll know that you have done your homework and you can go on to the next trade.
Phil
What this blog is all about!
Hi,
My name is Phil Dumont and I have been a commodity trader for the past 20 years.
I suppose that if you are here today reading this blog it is because you are looking for the best information to improve your trading or the best information to start trading. Either way, you are at the right place.
With this blog I intend to give you as much information as I can to help improve your trading and to point you toward resources that will help you reaching your goals as a trader.
Contrary to others that promote the best system or the best method or that pretend to know the “Secret to riches” in trading, I won’t pretend that my system is the best or that I know the “SECRET” because there is no such a thing as the best system and there is no “secret to riches” in trading.
You want to know why there is no secret to trading? Simply because trading is more of an art than a science. And, like any form of art, it is the artist – YOU – that define the system and it is YOU that take the final decision whether you are going to take a trade or not.
So no matter what program you’re using, what strategies you have in place or what market you’re in, it is YOU that will take the decisions and it is YOU that will have to live with the consequences of your decisions. Is it necessary then to say that: YOU are the most important part of your trading system.
So when someone asks me how long it is going to take to learn and implement successfully a new system? My answer is always the same: How long is it going to take you to know yourself as a trader and to define your trading style in line with your trading personality?
Since you are the most important part of your trading system, don’t you think it is important that you prepare yourself the best way and with the best resources if you want to perform at your best?
You will find the best information on this topic and many other topics related to trading on this blog page.
So, stay connected and see you soon right here.
Phil
The secret to trading successfully
Many people starting out in the trading business think that there is a secret to trading successfully. So they start to look for the “Holy Grail” system that will serve them success in a plate with little work and lots of time at their disposition to spend the “fortune” they will make with “THE” system.
They go from one system to another, to another in a no end quest that cost them a lot of money, create a lot of frustration and does not bring them any closer to success because of their lottery mentality.
I say to these people and to all of you that are reading this: stop buying lottery tickets and any other widgets that promise to bring you success, fame and riches “just like that”. Stop and listen carefully: the secret to trading successfully is YOU and the work you are prepared to put on to achieve it.
You are the secret to trading successfully and any trading system that has You in it as the main component will bring success to you. Open yourself to this idea, be teachable and soon you will find the best information and the best system that is suited for your trading personality.
Success demand that you work and that you persevere in your work. However, once you start walking this path, stay alert, because success is now walking toward you.
In my next post, I will present you a platform that has all the features to support you in your trading quest to success. It is the simplest and most user friendly trading platform on the market and it has been around for many, many years.
And guest what? It has YOU in it as the main feature.
Stay tune.
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