You have to trade the markets-not let the markets trade You

You have to learn to Trade the markets –Not let the markets trade You! The difference between an average trader and a very good one is how the trader handles the scenario that I will later describe. It’s one that I’ve seen played out so frequently that I can not even begin to count the number of times. Every good trader has to have a solid approach to the markets or they will have no chance of sustained success. With that being said, that alone is not enough. Sad to say, but true; what really separates the real winners in the markets from those that achieve “so-so” results, is the ability for the winners to consistently impose their “will” over the markets. It begins with a “good” idea. What happens is the trader begins market operations with a good idea. This could be an idea about using a particular trading style or possibly a good analysis about the duration and direction of a coming move. It doesn’t matter which idea; the point is that they begin with a good idea that will be correct. They must also have a good initial plan of attack and tactical approach. In the beginning, they are very observant looking for evidence they are wrong in their approach or analysis. This is a very important part of the trading process and you should pay special attention to it. A good trader will never go into any type of sustained market operation assuming they are correct. In fact just the opposite is true, a smart trader looks for flaws within the parameters of the approach and learns he or she is correct by positive P&S statements or Open Equity. That’s the litmus test; negative results or a negative Open Equity means you’re wrong, it’s that simple. This is how you cut your losses short. If rewarded with positive results, a very curious thing happens. They stop doing what was making them successful in the first place. It’s an amazing thing to watch, but it’s just human nature. People, corporations, and even countries tend to stray from what was working. In fact, a psychologist and friend of mine was once a consultant for struggling businesses in Florida and he shared many interviews of clients with me. The interviews would go something like this; he would ask them to detail what they did when things went well. Then he would ask them what they were doing now. If it was different, then he would tell them to go back to what they were doing when things were going well. And the amazing thing is nobody had realized what he or she was doing wrong. People tend to make small, but significant changes without realizing it. Start in one spot and end up in another without even realizing it and for a trader it can drastically alter his or her results. This happens to the average trader all the time but seldom to the professional trader. While the average trader gets sloppy and falls in love with his or her positions, the pro remains sharp and critical at all times. The net effect is that when you start rooting, thinking, and talking your position, you lose the edge you had in the first place; the markets start trading you instead of the other way around. The results are predictable and usually do not have a happy ending. When certainwords start popping in your vocabulary such as: wish, want, hope, or you start praying for a position to go your way – exit right away because you’re not thinking clearly. Take a break and get your head clear and then try again later. That’s the only cure. One possible solution for avoiding this phenomenon is to keep detailed notes and a trade log for constant review. Most traders don’t like to do this, but it’s the only way you can really keep track of what and why you’re doing what you do. Another good idea is to keep track of significant highs and lows of the markets you follow along with the dates or times of the day they were made. Again, most traders don’t like to do these things because they take time, but I can assure you that the professionals do do this and this can help take you to that first step of becoming a professional trader. Till next time!