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Get Back on Track

This is good advice outside of Trading as well.

"Have you ever had a bad day and wanted to stand aside until the feeling passed? Sometimes it is a good idea. It may be necessary to take a break, relax, contemplate, and refocus on the task at hand. The winning trader trades freely and effortlessly and it is vital to trade with such a mindset. Traders are similar to star athletes who perform at their best, or musicians who are virtuosos. What these people have in common is that they can focus their attention on the task at hand; inadequacies, conflicts, or current life stressors do not easily distract them. The more you can remove stress and anxiety in your life, the more easily you can trade effortlessly with a focused, concerted manner. Some of the conditions you need to address are unconscious and involve a certain amount of reflection, but other conditions are just a matter of the right attitude. A winning approach to trading is often just a matter of approaching trading by following some basic guidelines.

A key guideline is to think in probabilities. Don't focus on the outcome of a single trade. Think optimistically about the bigger picture. You may lose on a single trade, but if you are trading with sound trading strategies, you will come out ahead across a series of trades. It's this long-term perspective you need to focus on, not the short-term transitory outcomes. Remember that your overall success is the bottom line. You must strategically execute trade after trade in a calm and logical manner to make the law of averages work in your favor.

It's also vital to control your risk. Successful traders risk only a small percentage of their trading capital on a single trade, for example. Limiting the risk on a single trade further relieves some of the pressure; you are less likely to feel that every trade must pay off big. Trading a detailed trading plan is also important. When you know what you are going to do and when you are going to do it, you'll feel more in control. If you leave parts of your trading plan unspecified, you'll feel a sense of uneasiness. And in all likelihood, you'll not be able to follow your plan easily. Your discipline will falter. It's essential that you plan out when to enter and when to exit. Once you have a clear idea of when you'll decide to enter a trade and what signals indicate you should exit, you will be able to focus more easily on monitoring the trade and taking decisive action.

There's also a psychological aspect to trading like a winner, and sometimes it's important to just remember some common human tendencies to think "irrationally." For example, there's a human need to avoid loss and this need is often manifested in the need to be right. But don't be afraid to admit you are wrong. And don't think that you must capitalize on every opportunity to make a profit. These expectations are so high that they can be cause fear and anxiety. When you hold such high expectations for your performance, you place too much pressure on yourself, and it interferes with your train of thought. By trading under the right mental conditions, you stay calm and trade more profitably."


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Master Trader Joe Ross wants you to learn trading and he created products to do just that, teach you how to trade. Go to our website to find which ones best fit your trading style. Let's learn the art of trading Joe Ross' way!

 

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Wednesday, 07 December 2022

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.