Tag Archives: Learning Process

An Exceptional Example of Historical Chart Study

 

Today I want to share with you some examples of the work done by Johnny, as he learns to read and trade the charts as taught in the YTC Price Action Trader ebook series.

Chapter 17 of Volume 5 of the ebook series provides a graduated development plan.

Before you trade live you must prove success on the sim.

And before you trade on the sim, you must ensure complete understanding of the analysis and trade concepts via historical chart study.

Johnny is working through that first stage, through detailed study of prior sessions in his chosen market (YM) and timeframe (3 minute TTF, 1 minute LTF).

His work so far is of the HIGHEST STANDARD. So much so that I absolutely had to seek permission to share it.

If you're just starting out in your journey as well, whether with my strategy or with one you developed yourself, set Johnny's work as the benchmark that you try to also achieve.

Imagine doing this for 100 prior sessions, before you even hit the sim. Yes, there are completely new challenges at the hard, right hand edge of the screen. But you'll be tackling those challenges with complete confidence in knowing what it is you're looking for. And more importantly, why!

The following charts have been compressed in size in order to fit on the webpage. If you click each image it will open a larger copy in a new browser window.

You'll note that they all examine the exact same price sequence, from a number of different perspectives – (a) Trend Assessment, (b) Clues and Observations, (c) Changes in Sentiment, (d) Changes in Structure, and (e) Setup Areas.

I hope you get great value out of this. If it inspires even just one of you to improve the quality of your own learning, this will have been a massive success. Thanks Johnny!

Enjoy…

 

TREND

An Exceptional Example of Historical Chart Study 

CLUES AND OBSERVATIONS

An Exceptional Example of Historical Chart Study

CHANGES IN SENTIMENT

An Exceptional Example of Historical Chart Study

CHANGES IN STRUCTURE

An Exceptional Example of Historical Chart Study

SETUP AREAS

An Exceptional Example of Historical Chart Study

LOWER TIMEFRAME CHARTS  (note: there is some overlap from one chart to the next)

An Exceptional Example of Historical Chart Study

An Exceptional Example of Historical Chart Study

An Exceptional Example of Historical Chart Study

An Exceptional Example of Historical Chart Study

 

Happy trading,

Lance Beggs

 


 

Before Making Changes to your Strategy, Ask These Questions…

 

We're one week into the new year. Are you already trying to tweak your strategy, or your trading process, based upon a bad session or two?

Before making changes to your strategy or process, ask yourself the following questions:

1. Is the change the result of deliberate analysis of past performance, in order to improve upon a recognised deficiency or to further enhance a current strength?

A Deliberate Process

2. Or is the change a result of looking at a few different indicators or settings and thinking, "This might be a good idea"?

I know it will work this time!

It better be the first one!

If not, the major problem is not with strategy, but with your growth and development process. Yes, the strategy may well need further work. But without an effective growth and development process you'll likely never find the right solution.

Let's fix it now.

First, review this article – http://yourtradingcoach.com/trading-business/dont-break-the-chain-a-simple-tool-to-improve-consistency/

We're going to use this method to try to force some consistency. But with a tracking sheet designed just for this purpose.

Right click to save a PDF copy

(Larger copy: http://www.yourtradingcoach.com/products/ebooks/consistency-tracker.pdf)

And second, commit to a better process.

Review this article – http://yourtradingcoach.com/trading-business/its-time-to-fight-to-get-to-the-next-level/

Print out the article if necessary.

And take action.

A Deliberate Process

Your trading success requires consistency in application of your plan… and an effective process for driving growth and development.

You can do it!

Happy trading,

Lance Beggs

 


 

Stretching to the Next Level – Followup

 

Let me start by sending out a massive THANK YOU to the whole YTC community.

I believe last week's article set a new record for the amount of feedback it received.

And all positive, which is nice to see!  🙂

Check it out here if you missed it – http://yourtradingcoach.com/trading-business/stretching-to-the-next-level/

The aim of the article was to have you bring your goals closer.

Closer in time. And just a small stretch above and beyond your current capabilities.

This ensures that you receive quicker feedback. And most importantly, that you have a greater chance of achieving the goal.

Small wins, received often, do wonders for your mindset and self-belief.

Plus… it's just the way that progress works. So many things in life are achieved through small, incremental steps. For some reason we tend to forget that when it comes to trading.

I was most excited mid-week to see a new blog post by Dr Brett Steenbarger, which ties in nicely with our "stretch goals". Dr Steenbarger has for a long time been one of my favourite trading educators. His writing is of the highest quality. Every blog post is something I never miss.

I recommend reading the post in full here – http://traderfeed.blogspot.com.au/2016/12/how-to-trade-with-peace-of-mind.html

But the key points, as they relate to our article last week are:

  • "…the way in which we set goals greatly impacts the probability of our success and the mindset we're likely to come away with."

  •  "…the importance of keeping goal-setting flexible and doable. Flexible means revising goals at intervals: for example, setting monthly goals rather than annual ones. Doable means that both the number of goals and their difficulty be set in such a way as to set us up for success rather than frustration. Many big goals can be broken down into a sequence of smaller ones that create an ongoing sense of progress and momentum."

  • "Over time, the accumulation of small goals creates large changes. The idea is to make each day a win, regardless of the P/L of the moment. That creates peace of mind, and peace of mind frees us up to trade with open minds."

I'd like to also share with you an extra step to the "stretch goals" which I shared with a couple of traders via email last weekend.

It's the idea of having TWO TIERS of goal-setting.

Why?

To ensure an even greater likelihood of success and peace of mind.

The aim of our "stretch goals" last week was to ensure that it targets something only a slight reach beyond current capabilities. But this of course doesn't mean we'll achieve it.

Stretching to the next level

And that's fine. The reality is that we won't always achieve this new level of performance.

But we will learn. And we can review our plan for achievement of the goals. Or even amend the goals themselves, bringing them another step closer. And then we launch ourselves off on another attempt.

The problem is…

Stretching to the next level

This is where it can help to have two tiers of goal setting.

Our stretch goal is the second tier. It's the one we're really pushing for. It's the one we put all our focus and attention on achieving.

But it's also something that we completely accept we may not achieve. Or may not achieve, just yet.

But we NEVER judge our self-worth on achievement of this goal. EVER!

Because, although it's just a small stretch, it might take a lot longer than we expect.

This is where the first tier can help.

Set something that is so damn easy that you absolutely should achieve it.

Something like SURVIVAL.

However you want to define that is fine. For me it would be – "My aim this week is to ensure that my family is safely provided for and my trading business is not threatened in any way. I survive to trade another week!"

Stretching to the next level

Don't under any circumstances allow failure to achieve Tier 2 to influence your self-belief. You achieved Tier 1. That is awesome. Well done. Now, examine Tier 2 and find out why you didn't achieve it. And set in place plans for the next assault at that target.

It's all about maintenance of a positive mindset, while at the same time always pushing yourself to expand to new levels of performance and skill.

Tasks for the Christmas / New Year week:

  1. Review the prior article, if you missed it – http://yourtradingcoach.com/trading-business/stretching-to-the-next-level/

  2. Review Dr Steenbarger's blog post. And subscribe to his RSS Feed, or find some other way to get all his future posts.  http://traderfeed.blogspot.com.au/2016/12/how-to-trade-with-peace-of-mind.html

  3. Consider the use of two-tier goal setting in order to maintain a positive mindset, while still stretching to reach the next level.

  4. And set your goals. Trading recommences in early January. What are your goals for the first week? Do not start trading until they're clearly defined.

Go for it!

Lance Beggs

 


 

Stretching to the Next Level

 

Do you have trading goals?

Stretching to the next level

Whatever it is, that's fine.

As long as you're making progress towards that goal.

Let's be honest though… are you actually making progress?

I hope you are!

But I speak to a lot of developing traders and the fact is that MOST are not making progress.

Here is a problem I see over and over again:

Stretching to the next level

The target is just too far away to be able to see any real progress.

And even worse, there is no solid plan for how to get there.

Stretching to the next level

Wrong!

Stop it!

Let's fix this now!

How?

Step 1: Bring your goal closer in time.

Much closer. No more than a month away. Ideally weekly.

Let's say for example that your goal is to achieve $100k per annum. But you're not yet able to ever achieve a positive week.

GOAL: $100k per annum

"That's too far away. Bring it closer."

GOAL: Ok, I will aim to achieve $8k months.

"Which is how much per week?"

GOAL: I will aim to consistently achieve a weekly average of $2k.

Step 2: Reduce the size of the goal till it's just a slight stretch beyond your current capabilities.

A goal of $2k per week is fine. But if you're not yet even achieving positive weeks, it's kind of pointless.

If your goal cannot be reached from your current location, within three or four attempts, then your goal is crap. You'll just churn away week after week getting more and more frustrated. 

Your goal should stretch you just beyond your current capabilities.

And it should be something you feel that, with improvements in process, you might have a chance of achieving in three or four attempts.

GOAL: Ok. Let's reduce the weekly target to a much more achievable $1k.

"Too much. You can't even achieve breakeven."

GOAL: Fine. My goal this week is to achieve a breakeven week.

"Good. You're close to that already. It's just a small stretch. Remember, when you achieve that, and can prove it repeatable, you will then set further goals to stretch to the next higher level. And so on and so on until eventually you're achieving your original goal."

Step 3: Focus on process improvements required to achieve this outcome.

Break the trading process down into as many smaller sub-processes as you can.

Find the one part that, if improved, will provide the greatest impact upon results.

And then set your goal to improve that part of the process.

It might not be sufficient in and of itself to reach your monetary goal. But it's a start. Once achieved, with consistency, you can then find the next area of improvement.

"Break the whole trading process down into parts for me. However it makes sense to you."

"Ok. How about (a) quality trading ideas, (b) quality entry and (c) quality trade management."

"Fine. Which area is currently contributing to your inability to achieve a breakeven week?"

"All of them. But ok, perhaps the trading ideas. Too many, when looked at with hindsight, are just in poor chart locations. Far too late in the move. In retail zones, I guess you could call it. Definitely not where the professionals are trading."

"So what process changes can you make, and what daily goals can you set, to give you greater chance of trading in good chart locations?"

"I can spend some time this weekend defining "quality trade locations" including the point at which entry is too late. I can put something in checklist form. And then I can then work this week with the following goal:"

GOAL: This week I will focus SOLELY on ensuring the vast majority of my trades are attempted in quality trade locations, in accordance with my new checklist. Quality entry and management are of little importance. I can work on them next. But first, I will aim to ensure I'm at least trying to trade in the right areas. I will consider this a success if by the end of the week, 80% of the trades are in areas that meet my definition of "right area" as best it can be determined at the right hand edge of the chart.

"Awesome."

Ok, I totally made up that conversation. You knew that right!  🙂

But the point is that it takes the goal from something outside the realm of immediate possibility, to something that is much more achievable in a short timeframe.

Progress won't be guaranteed, of course. It might take three to four attempts, with further improvements to the process each weekend.

But if progress is not seen after several attempts, break down the process goal even further to something even smaller and more achievable. Your aim is to start accumulating small wins in the direction of your original and ultimate goal.

And if our trader achieves consistency in trading in better trade areas, but still fails to achieve breakeven weeks due to poor entry or trade management, then the process goal shifts to these areas. At some point, a breakeven week will be achieved. The goal might shift then to repeating this same level of performance, just to prove it's not a fluke.

And then… maybe aiming for something greater. Maybe three out of four weeks positive, with the losing week smaller than the average winning week.

Each step just slightly beyond the current level of achievement.

I don't know what your goals are. And I don't know your current level of performance. But whatever they are, if you're just churning away week after week without any clear evidence that you're closing that gap, you need to take action.

Step 1: Bring your goal closer in time.

Step 2: Reduce the size of the goal till it's just a slight stretch beyond your current capabilities.

Step 3: Focus on process improvements required to achieve this outcome.

Stretch… just a little bit.

And fight to get to this new level.

Stop accepting failure. Redefine your goals so that you can achieve small incremental wins.

One step at a time.

Stretch!

You can do it!

Lance Beggs

 


 

Trade Less; Review More!

 

Day Traders

If you're not currently profitable, or achieving the level of success you wish to achieve…

Is your current situation something like this?

Trade Less Review More

WRONG! WRONG! WRONG!

I know there is a LOT to be learnt through live trading. But it's the review process which drives growth and development.

You'll see things during a review session, after the fact and away from the emotion, which were not visible in the live market.

You'll discover things within your stats, which were not visible in the live market.

If you want to progress, time for an effective review session is NOT negotiable.

You must make a choice.

You either HAVE TO cut something from the time outside of trading, to allow for an effective review session and ongoing learning.

Trade Less Review More

Or you have to cut your trading…

Trade Less Review More

Trade Less Review More

Longer Timeframe Traders

The same applies to you.

If you're not currently profitable, or achieving the level of success that you wish to achieve…

Is your current situation something like this?

Trade Less Review More

If you want to progress, time for an effective review sessions is NOT negotiable.

You must make a choice.

You either HAVE TO cut something from the time outside of trading, to allow for an effective review session and ongoing learning.

Trade Less Review More

Or you have to cut your trading…

Trade Less Review More

We all want to trade more.

But if you're not yet consistently profitable, or not yet achieving the standards of success you believe you are capable of achieving, then your priority must be ensuring an effective review process as well as time for learning, testing and development.

You can always trade full-time again in the future.

But for now, less is more.

Trade less. Review more.

Happy trading,

Lance Beggs

 


 

Review and Improve

 

You might like to consider your review process as the vehicle which drives your trading business to its ultimate destination.

Whether that destination is ongoing improvement and eventual success… or continued mediocrity, frustration and failure… is completely up to you.

If you've got nothing in place, here is a simple process to get you started.

Once you're comfortable with this, there is great scope to expand it to new areas of review. It doesn't solve everything.

But again, if you've got nothing in place, consider implementing this process RIGHT NOW.

Review and Improve

Look at your last 20 trades. Study them with the benefit of hindsight.

Examine 50 if you prefer. Or 100. Find the right compromise for sample size, which is large enough to be statistically significant and small enough to ensure your review process occurs on a regular basis. But not less than 20. I would suggest that is the absolutely minimum.

Once you've gathered all the trade data and charts, let's check the quality of the setups.

How many of your trade ideas were in chart areas which DID offer potential for multiple-R profits (2R minimum)?

It doesn't matter whether you actually managed to profit, or not.

We're checking the general concept. The trade idea.

We're making sure you're trading in the right areas of the chart.

Did price move from the setup area a sufficient distance to provide multiple-R returns?

Take note of all the trades within the sample which achieved this goal. And now let's check the quality of trade entry.

Now consider those trades that were in good multiple-R setup areas. How many were you able to enter at a place and time which offered good potential to catch those multiple-R profits?

Again, it doesn't matter if you achieved a profit or a loss.

With the benefit of hindsight, given where you entered, is it reasonable to expect that a successful trader could manage that position to achieve multiple-R profits?

How many of these trades would you classify as having a good entry?

Take note of them… and let's move on to check the trade management.

Now consider those trades that were in good setup areas and which were entered well. How many of these were successfully held from entry to the first target level?

How many were you able to hold open to the initial target point, avoiding all temptation to scratch the position early?

And then…

Of those which did achieve the initial target, how many of these were held to a further "hindsight perfect" exit point?

Again, take note of how many achieved this aim.

And now let's use this information to drive our business forward.

Looking at these figures, which area do you need to improve when trading the next sample?

It's important that we focus on one area at a time.

And that we work in order.

Get the setups right first. Are you happy with the number of trade ideas that are actually providing multiple-R profit potential? If not… focus on improving the quality of your trade ideas.

Then work on entry.

Then initial management.

And then ongoing management.

Find the first area that disappoints you. Examine why. Determine a course of action for the next 20 trade sample.

And repeat.

Happy trading,

Lance Beggs

 


 

Trader Performance Drills – Part Two

 

It's six years since we last looked at this topic. Wow!

So it's definitely time to revisit it.

Check out the prior article if you want to see the original drills – http://yourtradingcoach.com/trading-process-and-strategy/trader-performance-drills/

Today we'll discuss a drill that I've quite enjoyed from time to time over the last six months whenever I've had a spare hour or so to "play".

It provides practice and learning opportunity in real-time assessment of context and market bias. And like all good practice drills you'll received rapid feedback on your decisions.

In particular this drill works to develop the following skills:

Entry:

  • Skill in timing an entry close to the turning point through recognition of signs that either (a) the context suggests further movement is unlikely, or (b) the nature of price movement suggests that the move has exhausted it's potential.

 

Trade Management & Exit:

  • Skill in contextual placement of price targets.
  • Skill in real-time assessment of the ongoing validity of these targets, or the need to amend them.
  • Skill in real-time recognition of danger and the need to either partially reduce risk or immediately scratch a position.

 

Let's set it up…

 

The Chart Overlay

  • Open a five minute chart. Clear it of all indicators and overlays.
  • Add an EMA(5) based upon the high price (not close price). I colour it green but this is not important to the drill.
  • Add an EMA(5) based upon the low price (not close price). I colour it red but this is not important to the drill.

 

The result is a very tight channel around price as shown in the image below.

The chart overlay

The indicator parameters

 

The Performance Drill

Open your Market Replay application.

Select any random date and time.

Now trade with the following plan:

(a) You can ONLY enter trades at or beyond the channel boundaries. You can ONLY enter short ABOVE the channel. You can ONLY enter long BELOW the channel.

(b) EXIT TRADES anywhere you feel necessary in order to both minimise loss and maximise gain.

(c) AIM TO PROFIT over whatever series of trades you complete during this drill exercise.

Entry zone - short

Entry zone - long

Exit as necessary to minimise loss...

... but also to maximise gain.

Additional notes:

1. By all means examine your usual charts alongside this. Feel free to refer to your usual higher and trading timeframe charts for context. And your usual lower timeframe chart to fine-tune your decision making. Market internals or orderflow tools are fine as well. In fact… whatever you normally use for your trading is absolutely fine for this drill. The 5 min EMA channel only provides the limits to the buy and sell areas.

2. I highly recommend speeding up the replay at all times except in the entry zone. For entry, set the real speed so that you can "feel" the movement of price as it would feel in a live environment.

3. You do NOT have to enter on every excursion beyond the channel. In some cases you will miss it anyway as price just tags the channel and moves back away from it. In other cases it would be wise to stand aside, such as fading a strongly directional market. Avoiding a very low probability trade is a good decision!

4. Stop losses – I like to keep this tight in order to practice timing the entry as close as I can to the extremes. I set them at around half the width of the channel. NOTE: Re-entry is always an option if you get stopped out.

5. Remember – the aim is not to profit on every trade. Just like real trading, we aim to profit over the larger series of trades. So take your losses but keep them small. One or two winners should more than compensate for these losing trades.

 

Real-time Contextual Decision Making

At times this will be easy.

At other times, it will be quite a challenge.

Your only restriction is that you must enter at or beyond the channel boundary. Ideally with quite a tight stop.

Everything else is open to your best judgment, based upon your assessment of context and real-time reading of market bias.

How will you enter?

Will you place a limit order and let it be hit? Sometimes this will give incredible entries. Other times you will be run over, if you misjudged how far price would extend beyond the channel.

Will you wait to see how price behaves beyond the channel before entering at market? Sometimes this will result in a missed trade, when price just tags the entry zone and rapidly moves back into the channel.

Will you scale in? Or go all in on one single entry?

There is no right or wrong.

Just play!

And learn!

That's the beauty of the replay tool, allowing you maximum trade entry and management decisions by speeding up the data in-between trade opportunities.

And in providing rapid feedback to each and every decision you make.

This is not something you will do every day. No-one has time for that. But from time to time when you find yourself with an hour or two available, and a desire to play with some historical price charts, go for it.

And who knows… if you enjoy this you might just be able to expand the rule-set and create a whole trading methodology out of it.  🙂

Other markets

Other markets

Other markets

And other timeframes

Happy trading,

Lance Beggs

 


 

CONSISTENCY – It’s a NECESSARY part of the process!

 

In a previous article we discussed the various levels you need to pass through on the way to achieving your long-term trading goals:

It's Time to Fight to Get to the Next Level

See here if you wish to explore this path in greater detail – http://yourtradingcoach.com/trading-business/its-time-to-fight-to-get-to-the-next-level/

And we also discussed the process required to drive your development through each of these levels:

Manage your growth and development via twenty trade groupings

This has been discussed a number of times, but I believe the flowchart was first used here – http://yourtradingcoach.com/trading-business/you-can-do-this/

20 trades is of course the absolute minimum required. Feel free to increase it if you prefer larger sample sizes. But do not reduce it. Any less that 20 and your sample size is too small to provide useful data.

Anyway, today I want to discuss a NECESSARY component of this 20 trade review process.

I had a chance to speak to a trader this week who was not progressing well, despite tracking stats for 20 trades at a time.

Here's the thing though…

(more…)

Finding The Places Other Traders Got It Really Wrong

 

I really like this statement from last week's article, where we discussed how I use "the other trader" to identify good trade opportunity.

  • If I can't feel someone on the other side of the trade getting it really wrong, there is no trade.

Step one in implementing this idea into your trading, is to learn to find these areas where "the other trader" might have got it really wrong, with the benefit of hindsight.

And to achieve that, I recommend you use one of my old favourites – your Market Structure & Price Action Journal.

Let's add a new category to our journal entries – "Places Other Traders Got It Really Wrong".

Print your trading timeframe chart. Cover it with notes. File it. And review it often.

You don't have to find every single occurrence.. Just the obvious ones which really stand out to you. Anything which immediately screams out to you, "that was a dumb place to trade!!!"

Here's an example covering the first hour and a half of the most recent session.

(Click on the image to open a full-size version in your browser)

Finding the places other traders got it really wrong

What if you did this every session for the next few months?

Could the potential improvement in your edge more than justify the five minutes it may take each day?

What are you waiting for?

Happy trading,

Lance Beggs

 

PS. It's important to note that in trading like this I rarely enter via a limit order placed ahead of time in the area of interest. My personal preference is to let price enter the area where I think other's might have got it wrong. And then watch to confirm the behaviour. Ideally I'll see some sort of stall or exhaustion, indicating a failure to continue further in this direction. That's my cue to enter. Sometimes it comes VERY quickly. Other times it provides a nice stall structure which allows entry as it breaks. With experience you'll know whether it has potential to snap back quickly or not. First step though… learn to see them with hindsight. So get started on your Market Structure & Price Action Journal.

 


 

Miscellaneous Thoughts on Making Progress as a Trader

 

One of the things I love about what I do here at YTC is the opportunity to chat with other traders, at all stages of their development.

My email archive provides an absolute treasure-trove of information and ideas spanning all areas of this business from strategy to peak performance to business management.

I was reminded of this by two different email conversations in the last week, in which two traders both achieved a similar breakthrough in understanding. I'll share these right at the end of the article, so that we can finish on a real positive note.

But this got me thinking. I don't dip into the email archive enough for inspiration for articles or social media posts.

So let's rectify that today with a surf through my Sent Mail folder.

I thought we should start with a search for some miscellaneous thoughts related to the challenging task of making progress as a developing trader.

When Overwhelmed…

Let me start with a phrase that is often repeated in my email replies; perhaps more than any other. It's short and to the point. I'll let it stand on it's own without further commentary. You'll know if it's relevant to you and your circumstances.

Excerpt from an email reply:

When overwhelmed… SIMPLIFY!

 

Quality of Effort is Perhaps More Important than Quantity

Sometimes less is more!

If you're putting in a whole lot of effort, but finding no consistency in results, perhaps this email conversation will help you refocus in a new and more effective way.

Excerpt from an email reply:

If you're inconsistent in application of your strategy then I think you seriously need to consider WHY you are trading a full session.

If your inconsistency is leading to doubts about the strategy, then again, seriously consider WHY you are trading a full session.

Yes we need to maximise our exposure in order to grow.

But quality is important as well.

At the moment you're trading a full session but life is providing limited time beyond that for effective review processes.

Is there perhaps a better way to use your time?

What if you traded only half a day and used the remaining half for a more effective and thorough review and learning process?

What if you narrowed focus even further and just traded the opening hour?

Let me run with that idea for a second. What if you did this:

Focus on the first hour of the market open. Learn to trade it well.

Trade for 1 hour.

And then follow that up with 3 hours of review and REPLAY.

Study the session from a strategic perspective. Study the session from an execution perspective. Study the session from a human performance perspective.

Find the setbacks. Study them. What happened? Why? Is there a pattern of behaviour repeating here? What can you do to improve in future?

Find the successes. Study them. What happened? Why? How can you achieve more of this in future?

Replay the hour with the benefit of hindsight. What can you learn in comparing your actual performance, with hindsight perfect performance?

1 hour of FOCUS. 3 hours of QUALITY review.

And you've still got half a day then to allocate towards other areas – general reading and study, idea generation, testing and development, personal development. And occasionally, reward yourself with a half day off.

Start with increasing efforts to trade the first hour well. Find consistency and success in this small period of time. Later you can consider expanding this to 2 hours. Then 3. Then 4.

Inconsistency doesn't just disappear because you found an awesome new affirmation. If you're inconsistent in the first hour, you'll be inconsistent in every hour of the session. Narrow focus. Fight to get the first hour working. Then expand.

 

Stop Comparing Yourself With Others

We all do this. It's natural. But it serves no good at all.

This idea comes up often in my email conversations.

Excerpt from an email reply:

Stop comparing yourself with others. Their results are irrelevant. And for God's sake, ignore what (name removed) says he achieved.

There is no race against others. Only against yourself.

All that matters are your own results.

Whatever they are… accept them. And work to improve from there.

Have you improved when comparing with your abilities a year ago? Great. You're winning. Keep improving. This is the ONLY comparison you need to make.

 

Work With What You've Got

It can be tough to fit trading around a full-time job and family responsibilities. It seems we can never find enough time to work on our dreams.

But it does no good to dwell on it. Accept it. And find a way.

Excerpt from an email reply:

So you can only manage to trade one half-day per week. Fine! It is what it is. Family and income needs have to take priority.

But you've got one half-day per week.

That's 50 sessions in the next 12 months.

50 sessions to trade. 50 sessions to review and learn from. 50 sessions to get better than you are now.

And maybe next year you'll be able to manage a whole day. And the year after that you might be able to manage two.

Maybe this year you'll do 50 sessions on the sim.

But then maybe next year you'll be able to do those 50 sessions live, with a small single contract position. Building gradual success. Slowly increasing confidence.

Maybe the year after that you'll be able to increase size.

And maybe the year after that, success will lead you to new opportunity and new ideas, allowing you to trade more days per week.

The next year is going to pass anyway. It's your choice how you use it.

The next five years are going to pass anyway. Where you find yourself then, will be a direct result of the decisions and actions you take now.

You've got one half-day per week. Go for it. Use it well.

 

It's All About Learning To Perform in an Environment of Uncertainty!

Let's finish on a real positive note by sharing excerpts from TWO different email conversations in the last week, in which two different traders both achieved a similar and related breakthrough in their understanding of this game.

I was fascinated that I received these emails within two days of each other. This was what provided the inspiration to dip into the archives for today's article.

Initially I wrote this section with just "notes" taken from my reply, but in editing I've come to realise that unlike the above sections it reads best when you get to experience the breakthrough in the words of the sender.

The lesson for us – sometimes our progress as a trader comes not through small incremental growth, but through sudden and massive leaps of understanding. A paradigm shift!

The thing is though, typically these paradigm shifts are just the end result of long months of trading, review, thought and reflection. Underlying a paradigm shift is often an whole lot of work that remains unseen by other observers. So if you're putting in the work and not seeing results, keep your chin up. Perhaps you're still just setting the foundation for your next breakthrough in understanding.

Enough from me… let's just share the email conversations and wrap up the article.

Excerpt from email:

Strangely enough I was also going to email you yesterday as I also had a significant aha moment.

You said in your book something along the lines of we are operating in an uncertain environment and therefore looking for certainty is never going to work – all we can do is try to enter at good structural locations, with strength and against weakness, and manage our risk accordingly.

While this made sense to me immediately, last night I was looking through some charts and all of a sudden realised that I was guilty of doing exactly that. How the hell do we know what all the other traders in the market, and therefore price, is going to do next? All we can do is assess weakness/strength, get in with the strength and 'likely' future trend and manage the risk as best we can. The R/R will take care of the rest.

I now realise that I was far too focused on winrate and avoiding losses without even realising it and while I'm obviously not going to go all gung ho now, something has definitely shifted subconsciously and I now genuinely feel so much more comfortable with the mindset of expecting the the next trade I place to lose, and the next one, and the next one and not being obsessed with finding the perfect A+++ entry.

Absolutely fascinating how these things just happen from no where (albeit after 100s of hours of chart time and thinking).

Except from reply:

I'm glad you've come to this realisation. It's one of those things that everyone rationally understands and says they get, but it's clear from their actions and behaviours in the market that they don't REALLY get it. I'm not sure it's possible to teach. It perhaps just requires experience and loss and a whole lot of self-reflection and pain.

I'm reminded of something Mark Douglas said in The Disciplined Trader (his first book). "Most people like to think of themselves as risk takers, but what they really want is a guaranteed outcome with some momentary suspense to make them feel as if the outcome had been in doubt."

Trading success is not about achieving certainty. Rather it's about accepting and managing our imperfection within an environment of uncertainty. Expect losses in the short-term. Play to win over the long-term.

Excerpt from email:

Really enjoying your book, just thought I'd share some contradictory concepts & thoughts I didn't expect that are encouraging for me. Besides getting much needed "structure" from your work, (which I lack in all areas of my world), I never expected to experience the comfort in seeing professional traders actually missing opportunities and taking losses. Over the years I've noticed this underlying gut feeling of anger when I get stopped out or miss an entry, no matter how often I've heard to expect losses & missed trades, it never erased or cleared it mentally for me until now. It's been liberating to take the time to heal an issue I never really noticed how much was holding me back.

I've noticed it's been going on for a while and realized I've held a belief that "perfection is the only way to succeed" and it's been keeping me from progressing. It's comforting to read successful traders also go through this every day, and clearly for me it's taken until now to actually feel and connect with this unconscious nemesis and address it.

Thanks for sharing you're weakness as well as your strengths !

Excerpt from reply:

Thanks for sharing these thoughts. It's great stuff. I love hearing when people have these breakthroughs in understanding.

You're right. Belief that "perfection is the only way to succeed" is almost a guaranteed way to fail. It's setting an impossible standard. It's much better, in my opinion, to believe that "accepting, forgiving and learning to manage our imperfection is the only way to succeed."

Now begins a new stage of your trading journey! Exciting times ahead.

There is no greater "personal development course" on the planet, than trading the markets! 🙂

 

Happy trading,

Lance Beggs