Lessons from the Pros


Keep Calm and Trade On

When we are putting our money at risk in the financial markets it is easy to get nervous and excited. These common emotions can wreak havoc on our trading accounts if not put into check. I was reminded of this while teaching an Extended Learning Track course online recently and thought of the huge benefits of trading with a community of traders rather than alone.

In the class, we set up an intraday trade in the S&P 500 E-Mini futures.  According to the trading plan, I calmly analyzed the trend and the locations of the supply and demand zones.  I then evaluated the zones to see if there was a high-quality trading opportunity.  Once I decided to take the trade, I planned out the exact entry, target and stop levels.  I even talked the students through the strategies I would use for protecting profits by moving the stop to breakeven and also trailing.  Finally, I set the orders into the computer and watched as my trade played out.

The comment that stood out the most to me was when a student said, ‘It is so calming trading with you.’

Trading, when done correctly, should be a boring, methodical process.  Fear and other emotions arise from the unknown.  By planning your trades and executing the trade according to that plan, you should have nothing to fear as you already know the maximum amount of loss you could receive and even the potential gains from the trade.

Trading with others who share the same goals can help you be disciplined and accountable.

Many newer traders are not as confident in their trading abilities.  They may have mixed results in picking quality supply or demand as they gain experience.  Another reason why some students have problems with fear is improper planning for their trades.  So, what is the solution for this problem?  Trading in a group environment is a great way to get these fears under control while you hone your trading skills.

The Extended Learning Tracks (XLT) offer traders the ability to view professional traders employing the same tactics that they also use.  The added benefit of the XLT is that you are trading with many other students who are experiencing the same issues and successes you are also enjoying.  This becomes a support group and can greatly reduce the apprehension you feel while trading in isolation.

Free Trading WorkshopPeople often ask me why is it that I teach trading when I can obviously make a living just trading for myself.  While it is true that there is a great feeling that comes from helping students become successful traders and achieve their goals, that is not my only motivator.  I also need the accountability of others trading with me to maintain my own personal discipline in trading.

It is easy to stray from the path to trading success and become impulsive.  Impulsive trading: not planning trades, chasing price, using mental stops, is a road to trading ruin.  Even when I am not trading in front of students, I still ask myself, ‘Would I want my students to see this trade?’

To keep yourself in check, you can ask yourself on every trade, ‘Would I want to share this trade with my instructor or fellow traders?’  In fact, you can even share your trades to get input on your progress.  The XLT programs also feature special Student Trade Review days where the instructor and class examine other students’ trades and help each other learn what to do and what to avoid in trading.

Calm down!  Relax and plan your trades. Join a community to trade with a peer group instead of alone.  You may just find the calming effect therapeutic for yourself.

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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