Tuesday, January 02, 2007

New Year resolutions

Recently I have been introduced to Market profile charts. And they sure look interesting, especially the way Ensign implemented them. But that's beside the point. It seems I'm at a point in my development as trader, where everything looks interesting and where -after an introduction- I can use nearly everything to trade. I remember 1 year ago these charts made no sense at all, now charts like this 30min DAX make sense to me.


Still I’m not extraordinarily rich, having accumulated huge fortunes.


It’s me, my own lapses, my own shortcomings, which are so difficult to overcome.

What are the worst ones?

Number 1 on a long list
I know this trade will turn around

Number 2
It made not Number 1 as it occurs too seldom, but when it happens, it spells disaster
No Stop and it’s companion Average down

Number 3
Just one more trade.
And it’s brother: I made no trade today, I take a trade now and swingtrade it, if necessary meaning: I hold it at a loss and cover, if I see a small profit

Number 4
It’s moving, take the trade

Number 5
How could I miss this breakout, breakdown. 100 ticks and I got 10

Number 6
A special one, as I trade related markets: IBEX35 moved up, Z moved up…DAX should move as well. The important word is: SHOULD

Number 7
Breakeven is better than no profit at all. That’s a real nasty bastard, as it’s 50:50. Sometimes it’s the best I can do, sometimes I miss a 40 tick profit just minutes later

Let’s make New Year resolutions

1. No trade, if I have to leave the screen within the next 30 minutes

2. No trade, if I have not looked at a chart at all. (Yes it happens as a combination of Number 6 and Number 4 above)

3. No trade, if the market has already made 100 to 150 ticks. V moves are very seldom. Usually a breakout, breakdown is followed by consolidation with a bias in the direction of the break

4. No trade, if I expect distractions from the family or if I have other pressing things to do. Do them first, then trade.

5. Think first about the Stop. At what price is the trade no longer valid. Then what is a reasonable target. A signal might be great, but as long as I’m not trading HSI after +150 ticks the upside might become limited.

6. Three hours maximum at the computer. Then I take a break. And have fresh sparkling water at all times at my desk.

7. No trading after 19.00. No trading SPI overnight. No midnight trades. No overnight swing trades unless the trade shows a profit at the close of the day.

8. Use common sense



Joza said...

best wishes for 2007...

you have made nice list...but you must now work on it...
i have similar list..but it is hard to to things (or not do) from the list...

i still think that big part of trading success is in traders attitude..

have this text on my desk...i read it few times every day

"I am a professional trader. I wait for my signals to setup, when my signals setup I act decisively and trade. if the trade wins I have no more emotions than if it is going against me. When there is no trade setup I am not tempted to trade. When there is no trade setup I feel happy that I'm out of the market as my system works.

I am respected by my peers who look to me for sound advice. when I give advice I give it in a good spirit. I am a professional trader with a good attitude. I stick to my trading plan and do not deviate from it. When I am tempted to trade outside my system I remind myself that good things come to those who wait. I do not give my profits back to the market because I wait for my trading setups. When my trading setups appear more often than not they are good signals. I take the losing trades with the same steely attitude as I take the winners.

When I am in a winning trade I am not under any pressure to close them early. When in a winning trade I move my stop according to my system to capture maximum profit from the trade. I am happy to trade one position a day if the market only offers that. I am happy if there is no trade at all during the day secure in the knowledge that a trade will come along soon. I do not get tense about placing a trade as my system works.

I recognize that the greatest trading mistake is to lose patience and enter early or without a signal. I recognize that professional traders are set aside by two things - discipline and attitude. I have the discipline to only take trades when my system gives a clear signal that my chances of a good trade are favorable. When my chances are not favorable I simply sit back and wait until they are favorable.

When my trade is going against me I do not hold onto the hope that it will turn around. I never move my stop in an unfavorable direction and know that even if this one is a loss maker that overall I will come out positive. I am comfortable with losing trades as much as winning ones. I am a professional trader.

I listen and take note of others but do not allow their thoughts to change my system. I can learn from all my peers even if they are beginners as sometimes they see the obvious. My trading style is good and makes money. I am happy to be a trader. I am a professional trader with a professional attitude and I feel great!"

udo goelzer said...

1. i wait for my setup
2.only trades according my setup
3. i fear that my losses will increase and cut my losses
4. i hope that my profits will increase and let my profits run