Master the art of trading
Simon BrownJustOneLap.com
SimonBrown.co.za@SimonPB
18th September 2012
Trading is easy
Stages of a trader•Unconscious Incompetence
•Conscious Incompetence
•Conscious Competence
•Unconscious Competence
Losing money
Being wrong
Desire•To be right
•To confirm ones view
•To get positive feedback from the market
External fearCaused by something outside of you which you are strongly motivated to avoid.
Example: being wrong, losing money
Internal fearSomething inside of you that you link to a negative emotion.
Example: being wrong, losing money
BUT•Life rules and trading rules are different
•We are wired for life rules
•Have to wire ourselves for trading rules
What to measure•Measure success by what we can control•Discipline•Consistency•Monitoring trade•Exit (stop loss)We can not control winning or losing
trades
How to measure•Generate trade•Determine exit strategy•Determine trade size•Enter on confirmation•Monitor trade & stop loss•Exit as planned•Keep a journal
What to loose•Losing trades are a fact of trading, a cost of doing business•Start up capital
•Be comfortable with the potential loss before you enter
What to loose•Stop loss determines Rand risk per trade•Be comfortable with this
•Worse case of 20 losers in a row?
How to trustDiscipline requires trust•Eyeball the system on a chart (at least 20 trades)•20 paper trades•20 real trades with small amounts
•Than the real deal
Greed
Further reading•Trading in the Zone•Mark Douglas
•Mind Power•John Kehoe
Re-cap•You can’t trade with fear•Know how to measure•Accept potential losses•Trust your system
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Master the art of trading
Simon BrownJustOneLap.com
SimonBrown.co.za@SimonPB
18th September 2012
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