“It’s not ok to not be the best trader you can be.....it’s NOT OK” Mike Bellafiore
You have to be better than your best. You have to continually be getting better. There is no rest for traders. We have to be always improving. Trading is largely a zero sum game, you have to better than the others.
've often stated that any trader who thinks they have arrived as a trader will swiftly be shown the door by the market. It is a continual process of improvement and caution against believing our own hype.
So, what do you do in order to always be improving? The easy answer is a trading journal that you keep and a constant reviewing of your trades.
For me personally I have a journal and track my perfect trades. But as I also only trade for about 10-15 minutes after the 8.30am futures open, I'll often record my screen while trading and I review these videos.
The review is not only checking to see if my entries were good (exits are either at target or stop so automated and not important for this process). Did I get in timeously? Or late or early?
Am I missing information? I am watching the bids/offers and last trades, so not a lot of data. But I can miss data as I move between screens (trade, orders, chart, depth, etc.).What I find at time is that I take a long trade, for example. And it was right, but as I was entering the trade it switches to neutral or even short and I miss that change.
Close all the tabs/browsers and also get rid of all other data on my trade screen, except what I need - depth and last trades.
Point is alway be improving. Alway be checking in on yourself. Always be striving to be better every day.
My last point is to always remember that trading is like a high wire trapeze artists without a net or safety harness. We get no second chances. We can do 99 perfect trades and then 1 horrid trade gives it all back. As a trader we need to be 100% all the time. Not 100% in terms of profitable trades. 100% in terms of perfect execution every time. Because one slip and our money pile is back at the beginning, or as a trapeze artist, we a pile of broken bones on the floor.
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Upcoming events;
Ironman your trading
This is an hour long recording of a live event I presented in Cape Town on Tuesday.
The PDF is here.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
A short squeeze is when a stock surges, usually on some good news - but the surge seems disproportionate to the news.
The theory is that a lot of people were short (had sold the stock to profit from the downside), then the good news sends them all heading for the exits. In order to exit they have to by so you have the positive buyers sending prices higher but you also have the short sellers who're sending the price higher.
This is potentially what we saw on Blue Label on Tuesday when rumours started circulating that they had two potential buyers for CellC.
This is one of the real risks of shorting stocks, you're downside in a short position is unlimited as a stock can go forever.
With options your risk is always only 100% as it is the right wheres other derivatives are the obligation.
One could also see a long squeeze, but this is a phrase I have never heard mentioned before.
This would be when bad news sends a stock crashing as holders of the stock all head for the exits at once, think Steinhoff.
The difference is that short sellers are also short-term in nature. Sure that may be months or even years, but it's never forever whereas as holders could be looking to hold forever.
Also short sellers profit or loss is paid daily whereas long holders losses are only on paper. Real but always a hope of recovery.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
ddd
Goals need process and process becomes habit and achieves goals
In my trading presentations I always talk about goals and the problem of having a single giant size goal that while desirable is frankly overwhelming. My advice is always to break goals down in small bite size pieces, with one example of those bites always being doing a single perfect trade, followed by another perfect trade, and another and another.
This idea applies to everything we want to achieve in life. Truthfully we have the ability to do almost anything. Almost because doing a marathon in under 2 hours is going to be out of our reach - by an hour. But the goal of doing a first marathon is easy enough, if we break it down. First couch-to-5km, then 10km and so on.
Buy breaking a large goal down into small pieces we're able to achieve as we go along and hence we also make it 100% achievable.
Then as we're going along achieving our smaller goals via processes they fast become habits and soon our goals are done.
I started swimming just over a year ago, my goal was a Midmar Mile which I did back in February in a horror time of 44 minutes. But back then my target time was 48 minutes, so I was chuffed. Now my goal for the 2020 Midmar Mile is under 30 minutes. Hard, very hard. But it breaks down into 4 pool sessions a week and every pool session has it's own goal. Distance or speed or technique. So 4 times a week I wake up eager to try and hit my goal and most weeks I end the week having hit at least 3 sometimes all 4 of my goals.
And slowly I am moving forward.
Important is that I really look forward to and enjoy my training sessions, something that 18 months ago seemed like a crazy idea.
Most important is that is that I structure my process to fit within me. So I do not do early morning training, I train mid morning because that works better for me and hence is easier for me to do. If I was also trying to wake up at 5 to be at the pool by 6, it would be way harder.
So we need to move this into our trading and investing. What's the goal? Large dividend paying portfolio? FIRE? Trading for income? It can be anything but then it has to be broken down into small processes that enable that goal.
Want to be successful trader living off trading income.
What would make a perfect trade? Now do one, and another and another.You now have goals that can be broken down into processes.
You'll also notice that none of this results in overnight success because overnight success takes years.
JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.