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Your Winning Attitude- The Most Critical Element in your Trading Success

The material below is a compilation of Michael Douglas's outstanding book, "Trading in the Zone", Michael Parness's book 'Rule the Freakin Markets' and my own life learning experiences. I urge you
to buy and read these books several times. Parness turned $30,000 dollars into 7 million in less than 2 years.

First Let's Examine Common Losing Behaviors

Some thoughts on a winning attitude from 'Ruling the F. Markets. Parness correctly asserts (in my humble
oppinion) that we all have a self destruction tendency he calls the 'Knuclehead Within'. Freud said that deep inside us we all have a death wish, Parness asserts we all have a financial death wish, the difference between winners and losers is how well they control it.  If you haven't read it once you will hear it a hundred times, 2- emotions motivate traders: Greed & Fear.

1.  The most common blunders losers make is intial exuberance ingnorance. When a loser makes a winning trade he/she becomes exuberant, breaks their rules (if they had any), overtrades, becomes reckless and takes unwise risk.

2. Fear: Douglas states that fear is so ingrained deep within our personality that only 10% of traders recognize and regulate this emotion. Fear can cause us to not take good trades and not get out of bad trades. Fear, according to Douglas, inhibits our ability to sense the flow of market information and to harnes this information using it to guide our trading activity. Fear does not permit us to accept the real risks of every trade: Every trade has an unknow outcome and every trade can lose. Our acceptance of this truth is the start of developing a winning attitude that focusses on the probability of successful trades and moving fast to get out of losing trades.

3. The PERFECTIONIST, according to Parness refusese to accept smal losses and turns small losses into  disasters.

4. Both authors agree that traders can experience mood swings betweeen invincibility and panic. The winner knows how to accept winning and losing and control his emotoions.

5. The Winning Trader does not trade on bad days. There are calendar days that trading is known to be choppy. Your own mental, emotional and personal health dictates the days you should trade and the days
it is wiser not to turn on your computer.  If your personal work ethic is you must work 8 hours/day, 5 days
a week no matter how you feel.  You have doomed your trading to loss. If you have persoanl or family matters that will distract you -YOU MUST NOT TRADE!

SELF ANALYSIS ...................WHO ARE YOU............WILLL YOU BE HONNEST WITH YOURSELF

There is a sayng that your trading account balance does not lie. We may decieve ourselves with self-delusion that we are good traders but the only definitive messure is our trading account and recordes.
Take a look at PureTick's Winning Records: approximately $450,000 winning tades in one year, over
200 winning days averaging over $1,600/ day and only about 8 days of $450 losses.

1. Identify your weaknesses. Do you overtrade, take unnecessary risk, be brutal and honnest the market
does not spare the self dellsioned.

KEEPING IT REAL

1. Know your limitations: Don't believe the hype about trading systems making you millions overnight.
Tarding is one of the most mentally difficult careers -that is why only about 10% of would be traders
succeed.  If you have a small account (under $10,000 dollars) making $1,000/day is not realistic but making $100-$350/day is possible.

2. Time Limitations : You don't have to trade from market open to market close to succeed. In fact many
successful traders only trade the opening and closing hours, TRADING PART TIME CAN BE VERY LUCERATIVE.

3. LEARN TO MANAGE RISK BUT EXPECT LONG TERM SUCCESS............its a marthon not a sprint.

4. MONEY MANAGEMENT: If you are trading a small account, trade 1 dow contract per $5,000 dollars.
Don't leverage to the maximum. Build a strong base of success. Follow the PureTick Trade Procedures:
Simulate trading for at least 2 months before using real dollars.

 

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