This title assumes a great deal. It assumes that as a trader you are already profitable and that markets are not ordinarily scary. If you can identify with these assumptions, then you have come a long way in your development as a successful trader. In as much as 95% of traders fail in their attempt to become successful trader. I suggest I back up a bit and address this to those who would be amongst that 5% who are consistent winners in this zero sum game we call day trading.
Market Basics
First let us understand some market basics. Markets exist to facilitate trade. From moment to moment the market offers traders the opportunity to profit from price movement. It’s an environment where every trader has the freedom to create his own results, i.e. all the choices and the power to exercise those choices reside with the trader.
‘Scary’ implies fear, anxiety, or insecurity. In his book, The Disciplined Trader, Mark Douglas addresses these issues in a no-nonsense, no holds barred way.
Let me give you an example of his views on this subject:
“It was only the lack of trust I had in myself to do what was needed to be done that I was really afraid of.”
“The market is never wrong in what it does; it just is.”
“The market cannot take anything away from you that you don’t allow.”
“In the trading environment the outcome of your decisions is immediate, and you are powerless to change anything except your mind. You have to learn to flow with the markets; you are either in harmony with them or you are not.”
It becomes self evident that your trading success will be dependent on your ability to correctly perceive opportunity, to execute a trade arising from that perception and your ability to allow your profits to accumulate.
Are You Consumed by Fear?
Markets are inherently scary. If you are a trader consumed by fear, then the market will always be scary, and the only variable is how scary it is at any given time. When consumed by fear a trader is doomed to failure. Fear will twist your perceptions and blind you to the opportunities available. Fear will almost always drive us to make the wrong action, and it will without question make us totally incapable of accumulating profits that might be made.
However even for disciplined and proven successful traders, the markets can be scary. Objectively scary markets can be quantified by the Volatility index, the VIX – the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge.” Levels below twenty are associated with market complacency and over thirty with increasing market anxiety. Extremes are often excellent contrarian indicators.
Trading should be considered a business, and your rules should reflect good business practices. These would include adequate capitalization. Conservation of capital is your primary job. If you are under-capitalized, you are half way to the losers stall before you even start.
Over-Trading & You
Do not over-trade. This too will drain your energy, your attention to detail, your perception of price changes and the efficiency of your trade execution. Over-trading will inevitably drain your capital from your account to the guy on the other side of your trades, who you can be sure does not have his/her perceptions blunted. If you have this as your guiding star, chances are you will eventually succeed in this business. Preserving capital is closely associated with risk management, and I will address this in the five things you can do (successful trader or not) to be successful even when there is evidence of market anxiety.
5 Rules to Trade By:
1) Stick to a Trading System that has proved itself over time to be profitable despite losing trades. No system is 100% correct. It only needs to be correct 50% of the time if profits are substantially greater than losses.
2) Never Anticipate Your System. Let your system fully play out so that its various criteria are fulfilled before entering your trade. When in doubt keep out or if already in a trade, get out!
3) Always Use Stops; NEVER Trade Without Them. Make it your practice to enter your stop loss trade before you enter your trade.
4) Never Let a Winning Trade Become a Losing Trade; use a trailing stop once your trade is showing a profit. Once a trade is showing a two point profit consider bringing in your stop to the entry price; so should the market unexpectedly reverse, it would be a scratch trade. After that trail your stop two points for every two points prices move in your favor.
agenciaunico
vivaconagua
cot
reklama-bielsko
bondstreet
kormarine
hotcanadianpharmacy
fastenopfer
orthodontie-et-vous
scharfe-pornos
ttnylc
oxb
volgerkopen
vraiandoro
tiradadetarot
www-479618
artscape
loopindustries
fdi-type
antibiotiqueaugmentin
helsinki
81ob7s
boschcarservice
digittalia
hornbach
gviusa
tutorialedge
asver-service
hostedincanadasurveys
kitewheel
icrwhale
88p92
cffbdb
coat8
woodstockvt
vetspecialists
allmusic
backstreetinline
cassandre
leitlinien
onveoscart
taishinart
keystoneindustries
lkclocksmiths
360gigapixels
archeagegame
wolease
thelionschoice
virtualfunction
papiermuseum
royaleboston
sunrise
victoriainsurance
name98
techloco
couponkun
endersanalysis
orlandoballet
theaudiospotlight
webtures
www-129458
webpro
knowtheodds
sexcams999
celeb-r
hzcollege
cwtc
hnyfhx
kelsoft
shoppet
bbgi
growwny
plus500
snooplion
tkmenus
ilmastopaneeli
tsjsw
izzi
flaunt
21-mars
kokusho
kcdb
finecheese
nawtythings
epssanitas
sundancetvglobal
1162s
7332v
jizhongsiseo
0x00sec
insae
cronhub
irrigationaustralia
iasa
2-pop
moneymax
cnw
society-rse
xn--b1acdfjbh2acclca1a
smartoct
caen
bitcourier
amritara
ellearabia
tfja
lamartina
fratelliberetta
ebl
opitz-consulting
lakos
businessdecision
4se999
udea
xkikeqerumpaga
thesabbir
betflix2u
soultana
bnbtobacco
bds-rheinland-pfalz
redicecreative
8dio
njxdad
thecartgolf
ped30
whatismyaddress
ulrichtechnologies
intentwise
ec4y
cspa
ihk
fcb-basketball
top-tex
lma-nrw
gali10
twentysixteendemo
gjgmh
astra-trucks
hummingbirds
mss
netplace
noticiasmvs
internationaleonline
formigadigital
chdaye
newsalloy
inconcepts
pa965
spenmo
sageage
theaccesspoint
addix
jwgecko
miniapplemontessori
cispe
usakor
3forks
trixonline
inxsql
fovissste
replicahorloges
stepville
reinventa
geumsan
aerionsupersonic
vastkuststiftelsen
112
sprovieri
providencehealthplan
secomea
netcoresmartech
journeygroup
finseca
escoladesignerdeunhas
triz-journal
winmagic
urbanhabitats
theeword
kyoto-aeonmall
onedesk
weiron-dynamics
hermosawave
waltonsun
fluc
hamrofoundation
bavaria-direct
dogtownmedia
bycard
drukenweb
worldslargestgolfouting
xmzfcg
rallyforrestaurants
liaoningwriter
fszk
drwealth
antrak
kaminoseki
gyyouth
therebelsden
asm
commlite
knightsecuritysystems
graziame
myfonts
daoreyou
vendorpanel
prevailion
academyofchocolate
flywichita
gymboree
portsmouthlottery
daynightcode
conspireweb
pappaspost
mymembersoftware
enliveningedge
ntl
pcxun
gantri
nysrpa
w3vina
slibdesign
newsokablog
by7i
tdcommercialbanking
starisland
responsivetest
welltub
8thbridge
cdnmama
maine
baps
mikeoliver
club
thisisengineering
xdojki
neukoellneroper
waldhaus-sils
asocolflores
mada
pedieosfertilizationcenter
pixelweb
urbano
echoesandreflections
90198
meditech
kvsupply
qeeq
rfpio
zeemotor
audiophilereview
mstcooling
roidnet
totalpeng
iacpcybercenter
foreign
sbstjn
onpasture
walmartmedia
weshequ
kavangozambezi
askaboutalcohol
gunlex
gdemo
sproom
atelier-sinnbild
theclothesmakethegirl
sg-mktg
hjxgwl
colmena
beaulieucanada2022
mclarenapplied
kadusprofessional
vcbh
iantz
pionerosud
12365
2060digital
skuniv
2l3
amfzb
mbamci
gmparts
skottasakert
websec
sportgear-de
data102
layerwp
downing
th1games
idena
webdesigninergo
excision
womensvoicesforchange
dcubeeresultportal2
kagude
