The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers.  By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one pertinent question asked by one of our students on the forum and give you our expert response, so YOU can benefit from what our students are learning.

This week’s expert is Vadym Graifer, who is know as an expert Tape Reader (it’s an old-school art) … but we know him as an expert in Trading Plans …

“Vad” as I know him (and you will, too), is the author of several trading books, including “The Master Profit Plan”, on the topic of Trading Plans… http://www.realitytrader.com/masterplan

I own it and you may want to, as well.

Take a look at this week’s question from our student and the response from Vad:

The Question:

Vadim,

In my trading plan (psychology part) I use some of your trading mantras from Trader’s Intuition chapter of TTR. Do you have any additions/changes to these mantras (may be more specific to 2008-2011-? market conditions, or just from your experience as a trader and mentor for extra 7 years)?

Any suggestion, hints would be very useful for us.

Andrey

The Response:

Andrey,

My mantras haven’t changed other than some language corrections. After all, they are just templates, a trader can make some variations to them. What I did change though is: in A Taoist Trader course I introduced so called Trader’s Routines, where mantras are included as one part of the standard procedure designed for situations a trader faces frequently. Let me site an example of such routine, you will see how the mantra is incorporated in it.

1. Routine for Revenge trading.

Situation: A trader encounters a loss at the start of the day. Not willing to accept the loss, he starts pushing hard for remediation, initiating trades where there is no valid setup for them, digging the hole deeper and, again, pushing harder. As a result, the day ends with a sizeable loss, much bigger than the initial one that caused the spiral of self-destructive behavior.

Diagnosing the problem: Finding out the trigger for revenge trading – an exact number of losing trades or dollar amount of a loss that triggers the harmful behavior.

Philosophical foundation: Our knowledge is limited – we can not know all there is to know. We can not predict the future, thus there is always room for an unforeseen turn of events. It means that losses are unavoidable and a certain percentage of losing trades and days are expected. Cyclical nature of all phenomena also means that winning trades and days will take turns with losing ones. Losses are a normal, natural and inalienable part of the trading process. Not every day must be a winning one; there is no need to be alarmed by a loss and try immediately to remediate it.

Revenge Trading Prevention Routine.

1.   Leave your computer for 30 minutes. Go outside, do a breathing exercise. Recite the part of your trading philosophy describing the place and role of losses in trading. Your mantra:

The only reason to put on a trade is a valid setup in terms of my system. Being down for the day is not a reason to trade. The market doesn’t care about my being up or down. It generates profitable opportunities every day. I wait for the market to create a situation I can recognize. I am not eager to find the trade. I will know when it comes along. I  don’t have to win back immediately what I lost earlier. I will win it back when the right trade comes along. I sit and wait for the right opportunity.

2.   Return to your computer. Start observing market action trying to view it as a fresh start, as if your day just started.

3.   Make your next three trades a paper trades. Pay special attention to the reason for the trade – make sure that your entries are based on real setups, not on wishful thinking. Staying with paper trading will give you back your discipline – discipline of stopping yourself from harmful behavior, taking back control over your action.

4.   If your trades continue losing, stay with paper trading till the end of the day. If they are winning ones, start trading real money again but with half of your usual position size.

5.   When you establish firm pattern of returning to setup-based trading as opposite to emotion-based right after returning to your computer, you may switch back to real trading skipping paper trading stage, but with half lot position size.

Hope this helps,

Vad

Did Vad’s response help you?  Let us know.  Leave a comment below…

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers.  By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one student’s pertinent question from the forum and give you our expert’s response, so YOU can benefit from what our students are learning.

This week’s expert is Joe Ross!  Joe Ross has been trading and investing since his first trade at the age of 14, and is a well known Master Trader and Investor. He has survived all the ups and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.

Joe Ross is the creator of the Ross hook™, and has set new standards for low-risk trading with his concepts of “The Law of Charts™ ” and the “Traders Trick Entry™.” Joe was a private trader and investor for much of his life, but a serious health situation in the late 80′s caused him to shift his focus, and that is when he decided to share his knowledge. After his recovery, he founded Trading Educators in 1988, to teach aspiring traders how to make profits using his trading approach.

Joe Ross has written twelve major books and countless articles and essays about trading. All his books have become classics, and have been translated into many different languages. His students from around the world number in the thousands.

Now learn from our student, as he asks Joe his pressing question…

The Forum Question:

Hi Joe,

Discovering our REAL personal comfort level is such a critical fundamental element to finding out how to build our trading business/plan.  I find it an abstract matter to answer this aspect of ourselves.

I’d like to tap your experience of how you go about doing this in terms of:

1)  Risk

2)  Trading style

Thanks,

JC

The Response:

Hi JC,

Just today I finished tutoring a student, where throughout the 3 days of our time together these very same questions came up. I’ll take them on one at a time.

The most important single consideration when it comes to risk is to determine your own personal risk tolerance. How much risk can you handle, physically, mentally, emotionally, and financially? What exactly would put you in a corner in the fetal position, sucking your thumb and wishing you had never been born?? To come up with that you must give it a great deal of thought, no matter how long it takes. The answer to that question is critical, not only to how you will trade, and what you will trade, but also to your trading style.

Once you know your personal risk tolerance, you can then seek a market and time frame with sufficient momentum and volatility to match your personal risk tolerance.

It may be that because of financial tolerance that you decide to trade intraday, daily, or even weekly or monthly charts. You may decide against trading all day long due to physical intolerance. You may find it difficult to focus mentally for long durations. You may discover that emotionally you cannot handle a certain type of trading. In any case, it is essential to match your personal risk tolerance to the market and time frame you will trade.

Once you have made the match between personal risk tolerance, market(s) and time frame(s), you must then decide the kind of trading that makes you the most comfortable.  Is spread trading for you? Do you feel good when you trade options?  Are you possibly a swing and position trader? Are you most comfortable day trading? Will you be a scalper?  Will you be a short-term trader? Will you be a long-term trader? Your trading style is going to depend on an accumulation of these decisions, decisions only you can make.

Best,

JR

What do you think of Joe Ross’s response?  Comment below!

ANNOUNCING THE WINNER…

We always enjoy holding our newsletter contests.  It gives us all a chance to learn from one another.  This contest was no exception…

We had several GREAT posts!  Wow, what fantastic ways to visualize!

All of the posts had merit, THANK YOU to everyone who participated.  BUT we felt one post in particular stood above the rest so we’re awarding one winner this month…

Congratulations Nagib!

Not only did Nagib share with us his method of visualization he gave specific examples that anyone can apply to their life.  Nice job!  Nagib will receive a stylish The Disciplined Trader Mug for his efforts!

*******************************************************

ORIGINAL POST:

We here at The Disciplined Trader believe in VISUALIZING SUCCESS in life and in trading. It’s proven to work for us and we know it can work for you too.  That’s why in this month’s contest we want to hear from you…

What are some of the techniques that you use to visualize yourself being a wise and discipline trader? 

For instance… do you see yourself calm and collected while facing a trade going bad?  Do you visualize your bank account balance at a certain number and that keeps you focused?  Do you imagine leaving your day job and trading full-time?  It’s important to see yourself as successful, so it’s important to know what that looks like to you.

Let us know what you visualize and you’ll be eligible to win a “The Disciplined Trader Mug”.  We’ll announce the winner (it’s usually hard to pick just one… so we’ll probably have “winners”) at the beginning of next month right here on the blog.

The Disciplined Trader Mug

Ok… Get Posting!  Just click the ‘Comment’ link below and share your visualization techniques.

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers. By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one student’s pertinent question from the forum and give you our expert’s response, so YOU can benefit from what our students are learning.

We are proud to announce that this week’s Expert is Paul King, an expert on “Risk/Money Management.”

Any experienced trader knows the value of “staying in the game”… meaning avoiding “blowout trades” and trades that result in unexpected losses due to lack of solid risk management and/or money management.

KNOWING that you have solid risk/money management techniques in place as part of your trading plan results in a much easier path to being The Disciplined Trader… let alone watching your account grow rather than continue to experience “boom and bust”.

Paul King is owner, head trader, trading coach, and financial consultant at PMKing Trading LLC.

Paul’s background is in Information Systems, but he moved from technology to the business-side as a consultant to Wall Street companies.  His last real job (some time ago) was as a business analyst at a leading Electronic Communications network (ECN) in Times Square, Manhattan, NY.  Paul is passionate about trading and helping traders improve their performance through his international mentoring program.  Paul has trained clients all over the world including USA, Canada, South America, and Australia.  Paul has written a book about what he has learned developing PMKing Trading called “The Complete Guide to Building a Successful Trading Business”.

As well as writing articles, mini-eBooks about trading and articles published in Futures Magazine, Paul is very interested in personal finance and helping his clients (both globally and locally in Vermont) become wealthier (i.e. closer to financial freedom by reducing fixed expenses and increasing passive income).

Paul enjoys poker, wine and beer (but not the night before a trading day!), vegetarian cooking, chess, backgammon, and organic gardening.

Paul’s philosophy on trading and life in general is summed up by the old Chinese proverb “Those who say a thing is impossible should not interrupt the people doing it”.

Paul does not like to be called a Guru or and Expert.  He’s a no-excuse trader whose passionate about helping other traders experience the success that he has had.

We’re lucky to have him as part of our team of forum administrators… I’m sure you’ll agree.

Now learn from our student’s question…

The Question:

Hi Paul,

Would you give any practical suggestions of how to balance time/effort commitment to “regular” stream of income ( in my case full-time day job) and to learning of trading, system development and self discovery? How to avoid or at least minimize the effect of “catch 22″?

Thank you,

Andrey

The Response:

Trading is like any other expert profession – it requires directed study, research and development, and significant practice and real-life experience to become proficient.  In fact, a common rule of thumb to become “expert” in anything is that it takes 10,000 hours (which would take about 5 years at a full-time 2000 hours per year on average assuming you have a mentor to guide you).  The only way to significantly reduce this time is by finding someone who can help you climb the steep learning curve more rapidly, and also help you avoid spending countless hours on futile efforts.  Knowing what doesn’t work can be very valuable in its own right.

In terms of how many hours you can dedicate to trading versus your “real” job, that depends on your overall financial situation and what percentage of your fixed expenses are covered by passive income streams that don’t take any of your time and effort.  For most people, the interest on their checking account balance is the only truly “passive” income they have, so it represents a teeny tiny fraction of a percentage of their fixed monthly expenses.  My advice would be to have a plan to replace x% of your “time for money” income with passive income each year until x gets to 100% – at that point you will be free to spend all the time you wish on trading activities (or anything else for that matter).

Passive income streams do not spontaneously come into existence normally – you have to have a plan to actively work on them and develop them.  This is not a thing that comes naturally to most people because they’ve generally been conditioned to become “time for money” employees since the day they were born.

One question you could ask yourself is “Why is all my income time-for-money and none of it is scalable, passive, recurring, or repeating?”  If the answer is “because that’s what I’ve chosen to do”, then all you need to do is make different choices to change things.

Hope this helps

Paul

Did Paul’s response help you?  What do you think of this post?  Just hit the comment link to share your thoughts!

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisors.  By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one pertinent question asked by one of our students on the forum and give you our expert response, so YOU can benefit from what our students are learning.

This week’s expert is Vadym Graifer, who is know as an expert Tape Reader (it’s an old-school art) … but we know him as an expert in Trading Plans …

“Vad” as I know him (and you will, too), is the author of several trading books, including “The Master Profit Plan”, on the topic of Trading Plans…  http://www.realitytrader.com/masterplan

I own it and you may want to, as well.

Take a look at this week’s question from our student and the response from Vad:

The Question:

Vadym,

Any comments about potential internal contradiction between being flexible by “listening” to the market (as well as life in general) and sticking to the rigid clearly predefined rules even based on backtesting (or previous life experiences).  Is it just my internal conflict or something more general  in nature and how to deal with it?

Andrey

The Response:

What a beautiful question! As a practitioner of Taoism in trading, my eyes light up when I hear the word “contradiction.” Of course there is one – in EACH and EVERY phenomenon there is contradiction, otherwise it couldn’t exist. No side of any aspect of life and nature can exist without opposite one, balancing it out. Daylight makes sense only because of night darkness; crops need both winter and summer; uptrending markets are created by buyers accumulating long position – but each such position is a future sell order, thus a seed of a bear market coming at some point.

Understanding of this combination of polar opposites as necessary for any phenomenon has two important roles:

- first, it takes away emotional response to any of them. A trader who professes anger with market drop for instance doesn’t comprehend that without bear market his beloved bull market wouldn’t exist. It’s selling pressure of the bear that creates a void in long positions and puts enough cash on a sideline to create bullish reversal at some point – thus, both are necessary, no need for emotions.

-second, it creates a practical way of dealing with paradoxes. Realization how world works in terms of opposites supplementing other provides practical foundation for finding one’s way between them.

Let’s see how to combine it in the case you mentioned.

“Rigid clearly predefined rules” create a structure to to your actions. They establish a set of IF-THEN scenarios: IF market does this, THEN I do that. Great, now that you established such set and tested it, you have all you need to operate – UNTIL market changes. As your experience grows, you encounter more and more various market conditions, and your set of scenarios grows in the process. More and more events fit into your “been there, seen that, lost on it, learned no profit from it.” BUT (you knew there was a BUT coming, didn’t you), a Taoist also knows that his knowledge is finite – there WILL be something that he has no recipe for. That’s why he stays humble, ready to admit that he doesn’t know it all, careful and sensitive to changes. If he can identify the change, he reacts on it accordingly to his understanding. Practical result of his reaction is his measurement tool to tell whether his reaction is right. If it’s not and he can’t identify the reason, he accepts that this development is beyond his comprehension and steps back, ceasing trading and going into observation mode, paper trading, testing new ideas how to deal with change.

Such combination of rigidity and flexibility is a sure sign of a mature trader. It starts with understanding of the contradiction as natural part of life. It continues with studying how opposites interact; it ends with working out the recipes for dealing with paradoxes, to stay safe and profitable. I will spare you from quoting whole pages from A Taoist Trader course, but just look at a few chapter names to see how this theme goes throughout this philosophy:

2. THE RISE OF RELATIVE OPPOSITES
3. ACTION WITHOUT DEEDS
9. THE DANGER OF OVERWEENING SUCCESS
40. THE PRINCIPLE OF REVERSION
63. DIFFICULT AND EASY

There are more but you get the idea. After all, the very concept of Yin and Yang with corresponding famous symbol came to us from Taoism.

There… that’ll teach you how to ask good questions.

Hope this helps!

- Vad

How do you deal with internal contradiction?  Tell us your thoughts… just hit the comment link below!

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers. By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one student’s pertinent question from the forum and give you our expert’s response, so YOU can benefit from what our students are learning.

We are proud to announce that this week’s Expert is our very own Founder and CEO of Subconscious Training Corporation AND producer of The Disciplined Training and Support Program… Norman Hallet.

As many of you know, Norman has developed numerous successful startup companies, including the investment firm of Hallett Commodities, Inc., and the Introducing Broker operation, NCH Commodities, Inc.

Mr. Hallett holds a BA in Mathematics from the University of Cincinnati. His fascination with the investment industry lead him to grow several firms in his 21 year career in the financial arena. His high-profile style resulted in him being a frequent guest of the Financial News Network and culminated in his popular radio talk show, “Risky Business”, which had a strong 5 year run.

Now learn from our student, as he asks Norman his pressing question…

The Forum Question:

Can you discuss other methods and approaches we can take to become aware of our strengths and weaknesses? I don’t necessarily mean the major components as I should be more than aware of those by this point in my life. I am looking for those nuances that will lead to ‘aha moments’. Those quirky little things that come out when I don’t notice and affect me in a way I don’t realize.

Trading has brought awareness to several components of my personality in which I have been oblivious. And my trading journal will continue to capture a few specifically related to trading as time progresses. But, they don’t need to specifically trading related as I feel understanding the “whole me” is related to the psychological development of my business. I have asked a few of my friends and family for help but they tend to be biased. I have tried questionnaire’s in the past but they tend to be very basic. I have been on a quest to “know myself” as I feel it is the best way to work the kinks out of my trading and nurture the life I really want.

-PocketChange

The Response:

Hello PocketChange,

I often talk about the value of coaching … I know I did a lot of that in ‘selling’ The Disciplined Trader Training and Support Program.  In fact, I have several coaches.  One coach, my Entrepreneurial coach, to whom I pay $20,000 a year (yes, $20K), would believe your question is an EXCELLENT one.

I’ll answer for him, here.  I’m going to answer from an ‘angle’.

It’s important that you discover your Unique Ability… meaning what, in your core, you were meant to do.  Your natural talent, if you would.   The idea is that when you discover your unique ability, you can spend your time in that space (re: trading, this would mean constructing a trading plan the utilizes it a central theme) and look to delegate everything else (re: trading, perhaps that would mean to automate it).

Since I view (and your should, too) your trading as business, then as an entrepreneur, you need to identify your Unique Ability and spend as much time as you can doing things that are in that wheelhouse.

What IS your Unique Ability?

To find the answer, I recommend 2 things…

Take the KOLBE “A” Test.  You can find it at http://www.kolbe.com   The people at Kolbe have made helping find your unique ability a science.  I’m a 4-3-9-2.  I won’t tell you what that means. You’ll know after you take the test.

I will say that the 9 means that I’m a creative person at the core… always looking for new ideas… for me, that means creating my own trading plan (and not relying on others) works for me.  Now, there’s a lot more to what that number means, let alone the other 3 numbers.

The KOLBE test is a 35 question test that you can take in 15 minutes and it’s worth the 40 or 50 dollars you’ll pay.  All of the employees in my firm have taken the KOLBE test… this way I know the kind of tasks to assign to them to keep them happy and productive.

THE OTHER THING I would do is to read the book…Strengths Finder…another process to peer into your inner self.  After reading this short book, you’ll go online and take another test, as above that will reveal even more about the inner you.

I think that’s enough for now!

Good journey!

Norman – Administrator

What do you think of Norman’s response?  Let us know, comment below!

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers. By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one student’s pertinent question from the forum and give you our expert’s response, so YOU can benefit from what our students are learning.

We are proud to announce that this week’s Expert is Al Abaroa, an expert on “Journaling: Tips and Techniques.”

Al Abaroa brings over fifteen years trading experience. He is the author of Options Pro Essentials (Futures Press 2008), The Commodity Wire – A Market Weekly and Senior Strategist at OptionsPro, Corp.

He has appeared on TV with analysis of the futures markets and equity market directional forecasts. He has been quoted in Barron’s, the Wall Street Journal, Reuters and Trader-Source magazine. He served as sector editor for  Mega Trends, the all markets monthly publication distributed by Dow Jones News.

He lives inPlantation, Fl with his wife and their three children.

Although his credentials speak to the options arena, Al is well versed in all modalities of trading and is passionate about the importance of Journaling…

Now learn from our student, as she asks Al her pressing question…

The Forum Question:

Dear Al……I have just gone back and read my journal from the past few months. I journal on an Excel spreadsheet with time, entry, exit, profit or loss and then a line or two about the trade. At end of each day I write a line or two about the days trading and what I usually did wrong. So many days and trades say “I was not focused”, “I need laser focus”….I did not follow my plan”, “I went in too soon/too late”………Everyday I say to myself this is the last time I will enter a trade without all my indicators being in line…and every day I seem to make the same or similar mistakes…….I have made lists of mistakes I have made for a month at a time and they are the same ones over and over. I am an intelligent, aware and committed to trading woman!!! I so need to learn to put the whip down…….and stop beating myself up….(I cannot believe I just said that!)…

I am finding that there is an illumination happening with Tisha’s affirmations…I am following the program exactly and definitely am getting better…I awaken in the morning with the affirmations in the front of my mind…It is great……I am totally sure that I am at the right place…and the answers are coming every day….

I am just taking a leap of faith and writing these very personal and often painful thoughts……I am willing and able to do whatever it takes to become the consistent and disciplined trader that is inside..

Thank you for your thoughts and suggestions about my journaling.

Tigerlady

The Response:

TL-

I have a simple question for you. You wrote the following: At end of each day I write a line or two about the days trading and what I usually did wrong. So many days and trades say “I was not focused”, “I need laser focus”….I did not follow my plan”, “I went in too soon/too late”………Everyday I say to myself this is the last time I will enter a trade without all my indicators being in line…and every day I seem to make the same or similar mistakes…….I have made lists of mistakes I have made for a month at a time and they are the same ones over and over.

If you went back over the last month and looked at all those trades what would have the net result been? Would you have been profitable?

I ask the question for a variety of reasons. First, if your trading plan is working, but you are getting in your own way…move over. Yes, it is easier said than done. That’s why you journal. A successful journal will help you spot the flaws of your day. The most difficult to overcome is the mental side. Emotions run high when you place money on the line. The “laser focus” is essential.

I so need to learn to put the whip down…….and stop beating myself up….(I cannot believe I just said that!)… I’m not sure what you mean by this. I think self evaluation…better said, honest self evaluation is extremely productive. Only you will know how truthful your are being with your evaluation. Use your intelligence, your awareness and your commitment to succeed.

Perhaps you should place a post-it on your screen of the non-disciplined P/L, along with the disciplined P/L. It might serve as an excellent reminder.

Good Luck!
AA

Did Al’s response help you with your journaling?  Let us know, comment below!

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisors.  By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one pertinent question asked by one of our students on the forum and give you our expert response, so YOU can benefit from what our students are learning.

This week’s expert is Vadym Graifer, who is know as an expert Tape Reader (it’s an old-school art) … but we know him as an expert in Trading Plans …

“Vad” as I know him (and you will, too), is the author of several trading books, including “The Master Profit Plan”, on the topic of Trading Plans…  http://www.realitytrader.com/masterplan

I own it and you may want to, too.

Take a look at this week’s question from our student and response from Vad:

The Question:

Hi Vad,

As you would agree , a trader goes through some stages such as conservative to mid aggressive to Most aggressive. As I understand it, conservative would imply trading less number of lots and trading highest probability patterns and Most aggressive would be the opposite.

Can you please share your thoughts about milestones that must be met before one can graduate from say conservative to Mid aggressive?  Would it be appropriate to say in the trading plan that I would make the transition upon doubling/tripling my capital or is it based on a good winner:loser ratio after X trades ? Can  you please throw some light on this and any other thoughts on this matter?

Regards,

Kris

The Response:

Kris,

I would have defined the degree of aggressiveness somewhat differently. See, you consider the position size to be a function of aggressiveness – to me it’s a function of skill. I view a beginner as a trader who should operate with small shares, no matter what his personal level of aggressiveness is. It’s simply a common sense and instinct of self-preservation that should keep a newer trader on a smaller size. Control your risk tight while you don’t really know what you are doing. A surgeon doesn’t perform a triple bypass as his first operation, right? He starts with fixing smaller and easier things, collects experience, moves on to the bigger and more complicated…

Trading more frequently, jumping on marginal setups – well, it’s too a matter of discipline rather than deliberate aggressiveness. Why take a so-so setup, trade questionable odds and pray for luck instead of going after the highest odds? In both cases, size and odds, let the common sense and discipline guide you.

Now, here is what I would consider a deliberate choice of aggressiveness as trading style: http://blog.realitytrader.com/2007/07/how-aggressive-are-you.html

This is really a matter of choice, of personality dictating your preferences, going after what suits YOU best with reasonable expectations and after careful consideration of trade-offs.

- Vad

Tell us what you think… Did Vad’s response help you?  Leave us a comment below.

Today We announce the Winner… in this Case Winners!

What a great effort!  Thank you to all who participated in this contest!  We had so many great entries it was difficult to pick just one… so we didn’t!  We’ve selected 2 winners! 

CONGRATULATIONS to Suzanne and Dave P!  You’re now the proud owners of a quality leather bound The Disciplined Trader Leather Journal!

Suzanne great job at breaking through a TRUE Writer’s block…and Dave P for admitting men don’t like to be told what to do.

Also we’d like to give honorable mention (and our stylish The Disciplined Trader baseball cap) to Nigel Harvey for uploading his hand written journal and opening up to all!

Again THANK YOU to all who commented!  This gives our community a great resources to look back on and learn from.

======================================

The Contest Has Been Extended!

UPDATE: We’ve been collecting some GREAT responses over the past 2 weeks!  Since journaling is such an IMPORTANT topic we’re going to keep this contest rolling another 2 weeks to make sure we give everyone an opportunity to answer the questions below… So if you haven’t posted your response, now is your chance!  Don’t pass up the opportunity to win our quality leather bound TDT Journal (read all the details below).

==========================================

It’s contest time!  Lately we’ve been talking about keeping a journal of your trades and I’ve been sharing with you my techniques for trade journaling.  (If you missed those techniques be sure to watch weeks 13 & 14 of the 4-Minute Drills for Traders.  You can find both videos right here on the blog.)

NOW is your opportunity to give us some feedback and post your opinion for all to see! AND of course we’ll reward you for it!

REMEMBER this not only helps us deliver the best and most appropriate information to you, it also gives you an opportunity to help others by writing about your experience.

Please answer one OR BOTH questions below:

1. What do you think is the most important part of your journaling routine? (i.e. Is journaling before and after your trading session most important?  Is making sure you’re in a quiet room with no distractions most important?  Do you find that making a positive statement at the end of your journaling is most important to you?  There is no right or wrong answer here, we just want to get your perspective and hope that others will learn from it.)

2. What have you learned from journaling or if you’re not journaling what do you hope to learn when you start to journal?

By answering one or both of the questions in the Comment Section below, you’ll automatically be entered into a drawing. We will collect the suggestions over the next few weeks. The drawing will be held July 27th and we’ll post the winner (or winners – sometimes it’s hard to pick just one) right here on the blog.

The PRIZE?…

a high quality, leather bound, engraved “The Disciplined Trader” Journal!

The Disciplined Trader Journal

The Disciplined Trader Journal

Don’t be shy!  By answering the question(s), not only will you have a chance to win the journal, but you’ll have an opportunity to help others by sharing your thoughts…

Just hit the comment link below.

The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers. By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one student’s pertinent question from the forum and give you our expert’s response, so YOU can benefit from what our students are learning.

We are proud to announce that this week’s Expert is Paul King, an expert on “Risk/Money Management.”

Any experienced trader knows the value of “staying in the game”… meaning avoiding “blowout trades” and trades that result in unexpected losses due to lack of solid risk management and/or money management.

KNOWING that you have solid risk/money management techniques in place as part of your trading plan results in a much easier path to being The Disciplined Trader… let alone watching your account grow rather than continue to experience “boom and bust”.

Paul King is owner, head trader, trading coach, and financial consultant at PMKing Trading LLC.

Paul’s background is in Information Systems, but he moved from technology to the business-side as a consultant to Wall Street companies.  His last real job (some time ago) was as a business analyst at a leading Electronic Communications network (ECN) in Times Square, Manhattan, NY.  Paul is passionate about trading and helping traders improve their performance through his international mentoring program.  Paul has trained clients all over the world including USA, Canada, South America, and Australia.  Paul has written a book about what he has learned developing PMKing Trading called “The Complete Guide to Building a Successful Trading Business”.

As well as writing articles, mini-eBooks about trading and articles published in Futures Magazine, Paul is very interested in personal finance and helping his clients (both globally and locally in Vermont) become wealthier (i.e. closer to financial freedom by reducing fixed expenses and increasing passive income).

Paul enjoys poker, wine and beer (but not the night before a trading day!), vegetarian cooking, chess, backgammon, and organic gardening.

Paul’s philosophy on trading and life in general is summed up by the old Chinese proverb “Those who say a thing is impossible should not interrupt the people doing it”.

Paul does not like to be called a Guru or and Expert.  He’s a no-excuse trader whose passionate about helping other traders experience the success that he has had.

We’re lucky to have him as part of our team of forum administrators… I’m sure you’ll agree.

Now learn from our student, Paratrader as he ask Paul his pressing question…

The Forum Question:

“Paul,

I tend to not scale out of positions and take the whole exit.  However, I notice with that this also curtails profits, and I miss out on huge moves. When is a trade worth holding onto?

A lot of times I will buy back the trade only to be at a higher risk…missing out on the move is painful!”

Thanks!

Paratrader

Paul’s Response:

“I tend to not scale out of positions and take the whole exit.”

That is good – my research has shown that scaling in (or out) does not generally improve results, but does increase implementation costs if you use a broker that charges a “per trade” rather than a “per share or contract” fee.

“However, I notice with that this also curtails profits, and I miss out on huge moves.”

If you are missing out on large moves and have a small average winner size it is not because you are not scaling out – it’s because your stops are too tight relative to the “noise” of the instruments you are trading.  Consider trading with wider stops that increase the average size of your winners (but also give up significant open profits when a trend reverses).

“When is a trade worth holding onto?”

When you exit strategy says “stay in”. In some cases if a trade becomes inactive and you’re taking risk and nothing is happening then it’s a good idea to get out, especially if there is another opportunity to trade something that isn’t inactive.

“A lot of times I will buy back the trade only to be at a higher risk…missing out on the move is painful!”

Again, this is a symptom of stops that are too tight and cause you to get stopped out part way through a major trend which then resumes its previous course.  In order to capture large trends you have to use relatively wide stops but be prepared to give up significant open profits – this is psychologically difficult for most traders.  It’s not win percentage that’s important in profitable trading, it’s the average size of winning trades.  The only way to determine the correct stop size for you trading method is to simulate your trading program historically and examine the effects of altering the stop width.

Hope this helps!

Paul

Don’t be shy!  We’d love to hear what you think of this post, comment below!