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.

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

 


 

What’s Going On when you Hold Past the Stop

 

I'm always fascinated to hear from traders who have trouble exiting a trade at the stop loss. The ones who move the stop loss further away to avoid the exit. And then move it further. And further.

Until eventually, they can't take the pain any more, so they get out of the trade and destroy several days, weeks or even months of profits.

Personally, I don't recall ever holding past the stop, although I have found evidence of having done it once in the past while reviewing old charts.

Hopefully this was a one-off occurrence. Either way, I've clearly learnt from that at some point.

No-one likes a loss. Me included. But you need to be quite comfortable taking them.

For those of you who have yet to learn how to take a loss, let's discuss what is happening when you hold past the stop.

(Noting of course that this is not always the only issue. Maybe not even the primary issue. Everyone's situation is somewhat unique. But it is a significant factor that I see in a whole lot of cases. So if you're letting price run through you're stops, give this some consideration. It may just be the pathway you need to explore to find your way to greater success.)

This is what we're talking about…

<image: What's going on when you hold past the stop?>

<image: What's going on when you hold past the stop?>

<image: What's going on when you hold past the stop?>

<image: What's going on when you hold past the stop?>

<image: What's going on when you hold past the stop?>

<image: What's going on when you hold past the stop?>

<image: What's going on when you hold past the stop?>

In many cases the primary issue is NOT that you fear losing any money.

Often instead, the problem is that you don't want to be wrong.

YOU DON'T WANT TO BE WRONG!

You rationalise that if you just give it a little more room, and a little more time, price will turn around and prove you right.

It's all ego!

What does it mean to be wrong?

Every trade you get wrong is a dagger in the heart, reminding you of every time you've been painfully wrong in the past. Every time you've failed at something. Every time you fell short of your hopes, dreams and prayers.

Every wrong trade is one small step closer to the ultimate failure of your trading business.

And when you're no longer worthy… what will your family think of you? What will your friends say about you? What will your own mind say about you as you desperately try to fall asleep each night to forget the pain?

You don't want to be wrong!

So you move the stop to give it a little more room. But the fear only increases as price continues to move against you.

You give it more room. Again the fear increases.

And then again… you give it more room.

Until finally… acceptance… you know you're wrong.

And now it's about the money.

The loss is big, but fear of it getting even bigger lets you get out. Because you KNOW you're wrong.

Again, please note that this is not always the only issue. Maybe not always the primary issue. Everyone's situation is somewhat unique. But it is a significant factor in a whole lot of cases.

So if you're letting price run through you're stops, give this some consideration. It may just be the pathway you need to explore to find your way to greater success.

Here's the problem, as I see it.

You're playing the wrong game.

You're playing a game of individual trades.

But this business is not about individual trades.

The outcome of any one trade is irrelevant.

We profit over a series of trades.

You need to accept that this game is not one of being right. But rather one of managing a sequence of wins and losses so that over a large enough sample we can produce a profit.

Wins!

And losses!

They're just a part of the game.

What if you accepted that half your trades would win and half will lose. And you made it your aim to ensure that over any series of trades (20+) your average win was greater than your average loss?

To do this, you absolutely CANNOT let your losses run larger than they need to be.

Take your losses, quickly and decisively. Keep them small. It's only one in 20+ trades in your current series. You've got a whole lot of trades still to come. And some of them will more than compensate for the small loss.

By all means, aim for as high a win rate as you can achieve. But seriously… a 50% win rate IS enough. Just aim to ensure your average win is greater than your average loss.

Happy trading,

Lance Beggs

PS. If this article was useful, you might want to read this as well – http://yourtradingcoach.com/trading-process-and-strategy/Winning-Through-Losing-Better-1-of-2/

 


 

The Mindset of a Champion

 

This social media post from last Sunday is just SO IMPORTANT, I thought we should expand upon it and get the ideas out to the whole YTC audience.

<image: The Mindset of a Champion>

This is just a perfect example of a growth mindset, viewing losses as feedback that serve to drive further improvement and growth.

There are two things that I love about this.

1. It is SO ACTIONABLE.

Look to your own post-session procedures and ensure that you are approaching your review in the same way.

Serena Williams:

  • "I'm already deciphering what I need to improve on, what I need to do, what I did wrong, why I did it wrong, how I can do better…"

 

Let's make this relevant to our job:

  • What decisions were less than ideal? (Consider all aspects of today's trading, including your physical, mental and emotional state, your work environment, your ability to analyse the market, to get in sync with the price action, to recognise opportunity and to execute on that opportunity.)
  • Why did I make these decisions?
  • What alternate decisions would have improved my performance?
  • What can I do to ensure I make better decisions in the future?

 

2. It finishes with POSITIVE ENCOURAGEMENT.

After the review is complete and steps for improvement have been identified…

Serena Williams:

  • "OK, I do improve with losses. We'll see how it goes."

 

"I do improve with losses."

Beautiful!

Zero baggage carried forward into the next game.

Consider adding that to your own post-session procedures:

  • "I do improve with losses. Let's see how it goes tomorrow."

 

But Wait… Let's Make this Even Better…

Sunday's post also featured some great points from Nicholas…

<image: The Mindset of a Champion>

<image: The Mindset of a Champion>

If you want to be great you cannot settle for "good enough". You need to CONSTANTLY PUSH TO BE GREATER.

So let's improve the earlier post-session review items, ensuring they consider all sessions regardless of whether we outperformed or underperformed.

Step 1:

  • What decisions were less than ideal? (Consider all aspects of today's trading, including your physical, mental and emotional state, your work environment, your ability to analyse the market, to get in sync with the price action, to recognise opportunity and to execute on that opportunity.)
  • Why did I make these decisions?
  • What alternate decisions would have improved my performance?
  • What can I do to ensure I make better decisions in the future?

 

Step 2:

  • What decisions were excellent? (Consider all aspects of today's trading, including your physical, mental and emotional state, your work environment, your ability to analyse the market, to get in sync with the price action, to recognise opportunity and to execute on that opportunity.)
  • Why did I make these decisions?
  • What can I do to ensure I continue to make similar decisions in the future?

 

If you want to be great you cannot settle for "good enough". You need to CONSTANTLY PUSH TO BE GREATER.

Growth will be found at and beyond the edge of your comfort zone.

Welcome the frustration!

Welcome the pain!

Welcome the challenge!

And use it to DRIVE YOURSELF TO HIGHER LEVELS OF PERFORMANCE.

Happy trading,

Lance Beggs