April 5th, 2014
Not Taking Time Away From Trading
Most successful traders take regular time away from the markets for R&R.
Like most businesses, the business of trading can become obsessive. Many markets are active 24/7. There is always something new to learn and ways to improve. Like any other business or profession, traders need to get away from the business on a regular basis for R&R to recharge their physical and mental batteries. You would be surprised how many good trading ideas you will come up with in a relaxed atmosphere with no computers or internet.
Get A Life!!!
There is nothing wrong with being passionate about your trading business. In fact, success in any business is difficult without a passion for the business. But being obsessive or addicted to any business is not healthy or productive.
When you remove yourself from all the information and related activity for any business, you give your mind the opportunity to relax, experience new things and grow. The outcome is often not as anticipated. You will often come up with new trading ideas or perspectives.
Get Away From A Trading Environment
I recently spent three weeks in Argentina. I did have my laptop but did very little “productive” work. I let the folks at the office know that I would rarely check email. I only checked email one day the first week of my trip just in case there was a problem only I could solve. (There are fewer of these than I imagine.) I didn’t update any data, charts or workspaces. I adjusted my daily routine to the Buenos Aires schedule. Dinner around 9-11 at night. Milongas (social Tango dances) until 2-3 in the morning, sleep until 10-12, dance lessons or sight seeing in the afternoon etc.
April 2nd, 2014
The monthly employment reports are watched closely. There is often volatility the day or the report. Traders react to report expectations, whether the expectations are fulfilled or not. Are the report numbers greater or less than expected? Reactions are not always logical so trade carefully, or better yet, wait until after the announcement before considering a trade.
March 29th, 2014
Not Keeping It Simple
Successful traders usually have a fairly simple trade plan based on a few pieces of key information and just one or two trade strategies.
Unsuccessful traders usually have very complex trading plans (if they have a trading plan at all). A successful trading approach should be relatively simple to understand, to identify the trade set-ups and execute the trades. Having a trade plan and strategy that is too complex is related to Costly Trading Mistake #4, too much technology and information.
From The Complex To The Simple
In the 1980’s, my trade plan was very complex. I was known as one of the prominent Gann and Elliott trading authorities and released a very comprehensive and complex W. D. Gann Home Study Trading Course in the late 80’s. Trade decisions involved dozens of price and time calculations, lot’s of chart geometry and complex E-wave patterns.
As the years have progressed and I’ve learned more, I’ve also simplified my trading strategy. I look at far less information now than I did 20-25 years ago. Trading decisions for any market and any time frame are quickly made because there are only three or four relevant pieces of information regarding the multiple-time-frame, price, momentum, pattern and time position of any market that are needed to make a specific trade decision. A market is either in a low-risk, high-probability trade position or it is not.
March 23rd, 2014
This short video is an excerpt from our weekly DT Reports Video update.
March 22nd, 2014
Relying on Technology Instead of Learning How To Trade
Information overload is a problem, not a solution. Most unsuccessful traders think more information will make them a better trader and never take the time to learn how to trade.
Today, software, data and market information is cheap. When I started to trade in the mid-80’s, most traders did not have a computer or trading software. Those who did, paid hundreds of dollars a month for the software and data. Back then, most of us traders drew our charts by hand each day on graph paper. Some of us either sat in the broker’s office or had a DTN or other steaming data at home and made intraday charts by hand as well.
Today, trading software and data are very cheap. They have become so inexpensive, that the cost of data and trading software is hardly a relevant cost for a trader. Many traders become software junkies thinking they can buy success with a trading program and not actually have to learn how to trade and make trading decisions. BIG MISTAKE!
No Amount of Technology Will Make You Successful
Today’s cheap and abundant technology and plethora of trading software and cheap data is not a substitute for learning how to trade. No software program, advisor or any amount of data will make you a successful trader. Only the knowledge of how to distinguish which information is useful and relevant and how to apply the information to make low-risk and high-probability trade decisions will help make you a successful trader. Trading is exactly like every other business. To be successful, you must have knowledge, information and make decisions based on a plan and experience.