Category Archives: Trader

Trader – In this category our interest is in exploring all aspects of peak human performance, including: (a) Examination of the human body and mind and the ways that they impact upon our trading results, both positively and negatively. (b) Exploration of learning theory and the ways to maximise the development of knowledge and skill.

When your Trap Radar needs Recalibration!

 

Let's start with the daily chart for a bit of context…

I know right! When was the last time we looked at a daily chart?

No need to panic. Oxygen masks have not dropped from the ceiling. And we'll only spend a short time at these heights.

<image: When your Trap Radar needs Recalibration>

You know those days where you've got a feeling in your gut that tells you the market is DEFINITELY setting up a trap?

Well my Trap Radar had activated and the alarm was deafening.

My gut feel was "It's a trap! Fade the market!"

<image: When your Trap Radar needs Recalibration>

So let's step down from these heights and get back to the more comfortable Trading Timeframe and watch the opening sequence play out…

<image: When your Trap Radar needs Recalibration>

<image: When your Trap Radar needs Recalibration>

<image: When your Trap Radar needs Recalibration>

Here's the thing…

Way back in the early days I would have shorted this thing at every swing high, grinding my way towards the session stop.

But not now.

I recognise that it's normal to have these strong gut feelings from time to time.

Some people say to ignore them. I don't think we can. Nor do I think we should. Sometimes they're right.

I listen to it. I consider what it's saying. And I plan my trading in case it's right.

BUT… I also have a plan for those times it's wrong.

Having a gut feeling about market bias is fine.

But alongside that you must know the following:

(a) What price action would confirm this bias. And how you will trade it.

(b) What price action would indicate that the bias is wrong. And how you will trade it.

Let's step back to the open:

<image: When your Trap Radar needs Recalibration>

<image: When your Trap Radar needs Recalibration>

So having pre-accepted the potential for my gut feeling to be invalid, I was easily able to drop it and reassess the market structure.

<image: When your Trap Radar needs Recalibration>

For PB and CPB descriptions, see here.

<image: When your Trap Radar needs Recalibration>

<image: When your Trap Radar needs Recalibration> 

<image: When your Trap Radar needs Recalibration> 

Repeating the key points:

Having a gut feeling about market bias is fine.

But alongside that you must know the following:

(a) What price action would confirm this bias. And how you will trade it.

(b) What price action would indicate that the bias is wrong. And how you will trade it.

One of the greatest habits you can get into is always considering, "What if I'm wrong?" 

You are NOT smarter than the market. If it's not confirming your gut feeling, then YOU are wrong. Drop that bias and realign with what is actually happening.

Happy trading,

Lance Beggs

 


 

Embrace the Suck

 

Let's talk a little about mindset. Or more specifically about our expectations leading into the day.

Because I suspect that the way I approach the game differs quite a bit from many other traders.

The market has opened…

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

It's all about expectations.

I expect a really tough day…

and embrace the suck.

<image: Embrace the suck>

Source: Wiktionary

This difference in mindset is important.

Expecting simplicity leads more often than not to disappointment and frustration, as conditions do not turn out the way you expect.

And disappointment and frustration do NOT typically lead to effective decision making, as we analyse the market and identify and manage trade opportunity.

Expecting a challenge leads to a slightly more defensive mindset. One ready to survive through difficult conditions. And yet still open to potential large gains when the market surprises us with more favourable price movement.

Market conditions OFTEN suck.

The sooner you can accept and appreciate this. And in fact EXPECT it, the sooner you'll be able to get on with the job of managing it.

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

<image: Embrace the suck>

EMBRACE THE SUCK!

If the market provides massively favourable conditions… that's a bonus.

If my execution just happens to be flawlessly in sync with the price movement… that's a bonus.

But I don't ever expect it.

Confidence does not come from hoping or praying for A+ trading conditions.

It comes from knowing that even if the market conditions are crap, or your execution at times really stinks, you can adapt and overcome.

Embrace the suck!

Expect it.

And learn to prevail despite it.

That is how you develop unshakeable confidence.

Happy trading,

Lance Beggs

 


 

Resume the Fight at a Time of YOUR Choosing

 

I sent the following post out via social media on Tuesday, prompted by some discussion with a trader who dug himself into quite a hole through doubling down on losses.

This message is so important I thought I'd share it with my larger audience here in the newsletter. And also take the opportunity to expand upon the idea a little.

<image: Resume the Fight at a Time of YOUR Choosing>

This is one of the key advantages you have as a discretionary trader.

YOU get to decide when and where you will play this game.

If the current conditions are not to your liking, NO-ONE is forcing you to play.

Get out of there.

Take a break. Clear your mind.

And come back at a time of YOUR choosing, when the conditions are more suited to your style of trading.

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing>

I have clear guidelines in my own trading plan:

<image: Resume the Fight at a Time of YOUR Choosing> 

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing>

<image: Resume the Fight at a Time of YOUR Choosing> 

 

ACTION ITEM:

Schedule some time to review or amend your Trading Plan.

Make sure to include guidelines or rules for the following:

(a) At what point intra-session will you stand aside and force a break from trading? What changes need to occur before you will allow yourself to resume trading?

(b) At what level of intra-session drawdown will you force a stop for the day?

And longer term:

(c) At what level of drawdown will you force a break from all trading, in order to review your performance and reconsider your plan?

Happy trading,

Lance Beggs

PS: For those concerned that trading should never be a fight… it's simply an analogy that I find particularly useful. See here – http://yourtradingcoach.com/trading-process-and-strategy/trading-is-a-fight/ . The concept is still relevant even if you prefer to not view the game in this manner. If you're out of sync with the market, step away. Come back and play at a time of your choosing, when the conditions are more suited to your style of trading and your preference for market conditions.

 


 

Mindset – You vs Me

 

Your mindset is either working for you or against you. To some degree, you get to choose.

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

<image: Mindset - You vs Me>

NOTE: An essential ingredient in operating with a mindset of wonder is a pre-acceptance of risk. We discussed this recently here.

Before any trade you must pause to confirm that:

  • A full loss on this trade will not break any session drawdown limits, and
  • A full loss on this trade is personally acceptable. I am completely comfortable taking the loss and moving on. (Typically because I expect that any loss will be contained and easily overcome by the next positive trades.)

 

With the above preconditions in place, reframe any nerves you feel as WONDER. And watch fascinated as the future unfolds before your eyes.

Happy trading,

Lance Beggs

 


 

Wait till it’s Clear of Recent Structure

 

I don't know if you're like me, but if you are then you'll have this dark-side of your personality that surfaces from time to time. A side that just WANTS TO TRADE. A side which doesn't so much care about the conditions of the market. Given the slightest hint of opportunity, it wants to get into a position and trade.

And of course, while that will from time to time capture the good moves, it also means you're often stuck in a fight for survival through the all of the market chop that you just KNOW is better avoided.

I'm much better at managing this now. One of the most significant changes to my trading over recent years has been an increasing ability to accept less trades.

But I do need to remind myself of this from time to time. Occasionally that impulsive side of my personality finds itself in control of the mouse, despite my better intentions.

One of these times is the "first day back" after a break. Hence my social media reminder on Monday…

<image: Patience... there is no hurry!>

Yes, often my social media posts are written for me.    🙂

And then again on Tuesday…

<image: Wait till it's clear of recent structure>

But often a simple reminder to be patient is not enough. So here's another of the things I will often do to slow down that impulsive side of my nature.

A tactic I use when first coming back from a break. And also from time to time intra-session if I find myself frustrated and struggling to read the price action.

WAIT TILL IT'S CLEAR OF RECENT STRUCTURE.

Look at either the Trading or Higher Timeframe Charts. Find areas above and/or below recent structure which offer clear space and potential for an obvious directional bias.

Firstly, this gives me permission to "sit on my hands" until an area of the chart with greater potential for ideal trading conditions.

And secondly, this gives me time to just watch price, getting in flow with the movement and the pace, so that when good conditions are present and a trade opportunity sets up, I'm ready to attack.

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

<image: Wait till it's clear of recent structure.>

Define the places you want to trade, clear of any recent structure. Sit back and relax and enjoy the show. Let price do it's thing. Someone else can trade here. Just watch and get in sync with the movement, so that when price decides to play in YOUR playground, you're ready.

Good trading,

Lance Beggs

 


 

Pre-Acceptance of Trade Risk

 

I will NEVER take a trade without having pre-accepted the potential for trade loss.

Because the fact is that MANY will lose.

<image: Pre-Acceptance of Trade Risk>

<image: Pre-Acceptance of Trade Risk>

Pre-acceptance of trade risk means that I am comfortable with taking the loss and will do so immediately without hesitation.

Pre-acceptance of trade risk means that I'm not overly concerned with the monetary loss and can keep my focus on the process of analysis and effective decision making.

My focus remains on process, rather than outcome!

<image: Pre-Acceptance of Trade Risk>

Ask yourself before entry, "Am I comfortable with this trade losing?"

If you're not comfortable with this trade losing then you've likely not yet achieved sufficient confidence in your strategy, or you're trading with too much risk.

You will likely hesitate to take the exit, ensuring a greater than necessary loss.

And you will likely carry some psychological baggage into the next trade, increasing the chance of poor analysis or decision making and greatly increasing the chance of further losses.

<image: Pre-Acceptance of Trade Risk>

<image: Pre-Acceptance of Trade Risk>

Before any trade, pause to confirm:

  • A full loss on this trade will not break any session drawdown limits.
  • A full loss on this trade is PERSONALLY acceptable. I am completely comfortable taking the loss and moving on to the next trade.

 

Because if either of these are not true, then you have no business taking the trade.

Good trading,

Lance Beggs

 


 

Missed Opportunity Mindset Hack

 

<image: Missed Opportunity Mindset Hack>

<image: Missed Opportunity Mindset Hack>

<image: Missed Opportunity Mindset Hack>

The end result is that I still have a profit. And yet I feel crap. And my mind starts beating me up for not doing better.

All part of being human, I guess.

But not ideal if you wish to be an effective trader.

There is very little to be gained by carrying negativity into the rest of the trading session.

So here's what I do.

FIND A POSITIVE. ANY POSITIVE.

Break the cycle of negativity as soon as you can. Actively, consciously, seek out and focus on something positive.

Here's one I use in situations like the above trade example, where I've taken some good profits but left a whole lot more on the table.

Immediately… look left and find an earlier multiple-trade losing sequence.

Does the trade I just took completely cover that multiple-trade loss and still provide profits? If so, that's awesome. Great trade. Move on.

Let's check the charts…

<image: Missed Opportunity Mindset Hack>

If there isn't an earlier losing sequence, then find something else positive. Anything.

Even if it's just something basic like, "There was a time in the past when I wouldn't have caught that at all. I did today. Awesome! Great Trade! Move on!"

Whenever you find yourself with some negativity… break the pattern!

Find a positive. Any positive.

Enjoy the positive.

And consciously declare, "Great trade! Move on!"

There are more trades coming and they need your full attention, with a positive and focused mindset.

Happy trading,

Lance Beggs

 


 

A Shift in Mindset – 2

 

Last week we discussed a common problem with new and developing traders – difficulty accepting losses as a normal part of the game.

<image: Losses are a part of the game>

And we discussed a simple idea for moving beyond this problem, through seeking profits over a larger series of trades rather than any individual trade.

You can see last week's article here if you missed it – http://yourtradingcoach.com/trader/a-shift-in-mindset/

Today, let's discuss another exercise which might help.

PAIRING WINS AND LOSSES!

Let's look at your last twenty trade results. It might be something like this.

<image: Losses are a part of the game>

This is the game. This is how your results will (typically) display over any series of trades.

The number of trades on each side will naturally vary. Sometimes you'll have more winners than losers. Other times more losers than winners.

But any series of trades will likely include both WINNERS and LOSERS.

They're a normal part of the game.

The aim then is to approach trading such that anything on the left side (losses) is small enough to easily be covered by one good trade on the right side (wins).

Let's pair them off…

<image: Losses are a part of the game>

<image: Losses are a part of the game>

<image: Losses are a part of the game>

<image: Losses are a part of the game>

Of course… if you end up with excess on the left then this sequence of trades has no edge. And you've got more work to do.

But this is the ultimate aim. A series of trades which includes both winners AND losers, in which pairing them off leaves you with an excess of winners. Achieve this consistently and YOU'VE GOT EDGE.

It might help you to carry out this exercise each weekend, creating a table with your results from the prior week. Firstly to reinforce the fact that it's ABSOLUTELY NORMAL to have both losses and wins. But secondly, to give you a feel for how much of an edge you have. Or how close you are to achieving edge.

Or… for some of you… it might help to carry out this exercise live. In real-time. As you trade each day. Add your losses to the losses column. Add your profits to the profits column. And pair them up whenever you can. The aim being to keep your losses small enough so that they are easily covered by a single win. And more importantly, achieving a confidence boost when you get a profit on the right side of the table, and have no losses available to pair it with.

Give it a try if you think it might help you visualise your "series of trades". And hopefully reduce any concern over losing trades. After all, they're just a normal part of the win/loss table and easily covered by pairing up with the next win. They're no problem at all. Take the hit. Focus. And move on.

Happy trading,

Lance Beggs

 


 

A Shift in Mindset

 

I love this comment in response to last week's article (see the article here if you missed it).

<image: A Shift in Mindset>

This was the trade Steve is referring to:

<image: A Shift in Mindset>

Too many traders take the loss personally. As Steve says, they're stuck in the mindset of "Aaargh, I did it again."

Their focus is on themselves and their feeling of intense injustice and frustration.

Their focus is NOT on the price movement.

And so they miss the next opportunity, which spirals them into even greater depths of despair, especially when that opportunity is back in the original direction in which they entered.

LOSSES ARE A PART OF THE GAME.

Take the hit. Refocus yourself. And move on. (Provided session loss limits are not hit, in which case you shut down for the day!)

We've talked quite a bit over the years about the fact that trading is NOT about individual trades. Instead it's a game of profiting over a SERIES of trades.

Individual trade results are irrelevant. Series of trades are what matters.

And here's the thing – every series of trades will likely contain a combination of both winners AND losers.

LOSSES ARE A PART OF THE GAME.

Take the hit. Refocus yourself. And move on.

I shared a simple concept once before, which may help create a shift in mindset for some who read it. Let's repeat the idea today.

What if you stopped trying to find winners?

<image: A Shift in Mindset>

Why is that?

Because…

<image: A Shift in Mindset>

<image: A Shift in Mindset>

It's an important difference.

A novice trader is trying to find a trade that will win.

I'm trying to find a trade that is worthy of being one in a series of twenty. 

I don't need a winner.

I place all the odds in my favour. And I take the trade.

If it's a loss, I take the hit, refocus and move on.

It's a slightly different mindset… but one with a whole lot less fear.

I want to share one more idea which might help create this shift in mindset. But this article is long enough already.

Let's continue next week.

Happy trading,

Lance Beggs

 


 

How I Think on Trade Exit

 

Context:

<image: How I Think on Trade Exit>

The trade idea:

<image: How I Think on Trade Exit>

The entry:

<image: How I Think on Trade Exit>

Out:

<image: How I Think on Trade Exit>

How I think on trade exit:

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

All exits are temporary.

Pause and reassess.

Consider re-entry if the premise remains valid.

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

<image: How I Think on Trade Exit>

Sometimes it takes two entries. Sometimes it takes three.

There are no ways around this.

In the uncertainty of market action it's unreasonable to expect that we will always get a perfect entry.

So we're left with two options. Either we spread the entry via multiple parts across a general entry "area". Or we try for all-in precision but accept the fact that sometimes we'll need two or even three attempts to catch the move.

Although I sometimes trade the first method, my preference is for the second. All-in entries, accepting that it may take multiple attempts.

All exits are temporary. Pause and reassess. Consider re-entry if the premise remains valid.

Happy trading,

Lance Beggs