Month: April 2014

3 Parrots Trading Strategy, Cross Convergence, and Persistence Wins

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Nothing in the world can take the place of persistence.  Talent will not; nothing is more common than unsuccessful men with talent.  Genius will not; unrewarded genius is almost a proverb.  Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” – Calvin Coolidge

Though I fall a thousand times, yet will I rise and walk again, for I believe that God saves those who persevere.” – Gandhi

There’s really only one secret to making a million dollars – Persistence.  You keep after it, you’ll get there.  Another quote, whose author I can’t recall at the moment, is, “If you pursue something hard enough, it will begin pursuing you in return”.  (Although I guess that one could be good or bad.)

Forex Million Dollar Journey Report: Well, I apologize, boys and girls – I got blown out by a much-more-severe-than-expected reaction to the Australian CPI numbers.  Basically I was overmargined, but nonetheless I would have survived on anything less than a perfect storm against my position.  Still, one must respect the unexpected in trading.  Oh well, I said in an earlier article that I’d love the chance to buy Aud/Usd around .9250, and I got it – it’s just too bad that I got beat up all the way down to that point.

Anyway, reboot, start again.  I reloaded the account, and we’ll get a fresh start Monday morning.  We can do this – I am going to make this work – and I certainly don’t mind chipping in another $50 to get it rolling again.  I mean, come on, when we’ve got our million dollars, is it really going to bother us at all that it cost an extra fifty to get there?  So now I guess I’ve only got 17 months, instead of 18, to make it happen, right?  No problem. 🙂

Hopefully at least some of you have just been trading the Dance strategy straight up, and are in much better shape than your Forex Million Dollar Journey guide here.  (I should possibly consider following my own strategy, right?)  Well, I learned something about trying to start with only $50 – don’t violate your own money management drawdown rules, Jack! – and no matter how tempting trades may look, don’t overextend yourself on margin.  So with those lessons firmly in hand and mind, onward and upward we go.

I wanted to try this week to get positioned well in short trades on Usd/Sgd and Usd/Nok (mentioned in my article on “Three Currencies” for long term trades).  But the Usd/Nok just seems to be way too spiky and have too large a spread to navigate successfully with a small stake, so for the moment I’m setting that one aside.  Usd/Sgd did, in fact, retrace to between 1.2580 and 1.2600, as I thought it might, and I took a position at 1.2585, but while it didn’t go higher, it didn’t convincingly break to the downside either.  I’ll definitely be watching that one again next week for another possible short entry.   

Before I reveal my treasured 4-hour trading strategy, let’s talk about cross convergence.  (What kind of convergence did he say??)

Using Cross Convergence

What is “cross convergence”?  Well, since I just made that term up, I suppose I should explain what I mean by it.  Cross convergence is a term I use to describe a situation where a currency faces multiple lines of support or resistance across different pairs.  For example, say that Eur/Usd is up against strong resistance at 1.3850 at the same time that Eur/Aud is hitting up against strong resistance at 1.4900 and that Eur/Gbp is hitting a resistance level at .8300.  That’s three different fronts on which sellers are going to be attacking the Euro – that’s a lot of resistance to overcome.  And therefore it’s less likely that the Euro will be able to overcome it than if Eur/Usd were merely up against resistance on its own.  (If it does overcome the resistance in such a situation, that would be a significant sign of strength.)

I’m not suggesting that you watch every currency pair just to keep an eye out for cross convergence, but I am suggesting that if you have multiple Euro (or Gbp or any other currency) pairs on your screen, then it is something worth paying attention to, another factor to consider in your market analysis.  For instance, I regularly have both Aud/Usd and Aud/Jpy showing on my monitors, and before taking a position in either one, I normally at least take a glance at the other pair in order to see how Aud is doing there.  Or you might check Eur/Gbp before taking a position in either Eur/Usd or Gbp/Usd.  Of course, the various pairs of a given currency don’t necessarily always move together, but a currency’s performance on one front is still something to consider in evaluating how it’s likely to perform on other fronts.  And that tends to be more so the case in regard to significant price movements – when a currency is showing very strong upward movement, it’s usually strong across the board, i.e., against virtually all other currencies.  Checking cross convergence can be an additional note in checking general currency strength (which you can do right here at Winners Edge with the Forex Power Indicator).

The “3 Parrots” 4-Hour Trading Strategy

(I got that name from Chris’ article on strategy creation.  He didn’t use it, so I thought I would.  Thanks, Chris!)  I decided to go ahead and implement my 4-hour trading strategy in addition to the 15-minute Dance strategy.  Sure, it’s a bit dicey to do it with less than $300 or so in the account, since it necessitates running significantly wider stops, but I figure it’s not any dicier than some other stuff I’ve done so far, so why not give it a run?  I will, however, at least initially be trading very small positions in that time frame, probably just a couple of micro lots.

Trading off the 4-hour charts can be a wonderful luxury as a trader, as it frees you up from having to watch the pip by pip market action for hours at a time.  When you’re trading a 4-hour strategy, about the most diligent you need to be is taking an hourly glance at the markets, and you can probably get by with just taking a peek once every 2-4 hours.  And you’re only going to miss one 4-hour candle close while you’re peacefully asleep.

The “3 Parrots” refer to the 3 indicators I use on my 4-hour charts…and I don’t even know what 2 of them are.  Seriously.  2 of the 3 indicators I use are from a “black box” system – “black box” means the providers of the system/template don’t tell you what the indicators are – you get the indicator lines on your chart, but you don’t know precisely what they represent.  I found kind of an explanation someplace, that read in part, “It uses an extremely particular algorithm…with a custom price action filter”.  Uh, yeah, whatever.  All I know is that it seems to work pretty well.  I tweaked it by adding the Hull Style ADX (shown at the bottom of the chart).  The Hull ADX often seems to indicate a direction change just a bit earlier than the other indicators, and in any case serves as a good confirmation indicator.

Here’s a screen shot of one of my 4-hour charts:

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You can download the indicators and template for free here, and I’m sure you can find the Hull Style ADX someplace easily enough.  Those arrows do repaint, so the performance is not as flawless as appears after-the-fact on the chart.  Nonetheless, overall it seems to perform well, and those cute little horizontal rows of dots can provide nice, clear markers of near-term support or resistance, as well as provide simple points for initial stop-loss placements.

The best trades are the ones where the buy or sell indication comes when price is right around the lines crossover point.  A good example of this is the blue up arrow you see toward the right hand side of the chart.  In contrast, looking at the highest point that occurs on the left hand side of the chart, although that does turn out to be a near-term high, still, you don’t get the best or safest entry point (the signal only appears after there’s already been a huge down candle), and you would have had to endure a significant retracement back up before eventually seeing a profit in the trade.

Referring to the Hull Style ADX that I use, note how (looking right about the middle of the chart) it can be a good 2 or 3 candles ahead of the main buy/sell indicator arrows in foretelling a turn in direction (which is why I’ve got it loaded on the chart).  For an even earlier possible indication, I often flick the chart back to the hourly time frame to check what the ADX trend looks like there.

How this trade should go when it works:  Once a trade in this system starts moving in your favor, you usually will not see price cross back over the red indicator line, against your position, by more than 10 or 20 pips at most (and often that will just be a brief spike) – so that can guide your stop adjustments as you ride the trade.  Note how, in the best possible trade – the move up displayed on the right side of the chart – price never crosses back over the red line at all until the trade actually tops out.

One of the best things about this particular system is that it is precisely the kind of system that can get you in – and keep you in – on a long term trend, enabling you to catch a significant amount of the possible pips in an extended movement either up or down, while at the same time doing a pretty good job, trading within a 4-hour timeframe, of minimizing your risk.  Like any system, it’s not perfect and it will see some losses, but on the whole I’ve found it nicely profitable since I began using it a couple of years ago.  And, well, that’s about all I can tell you.  It’s worth a look anyway – check it out and let me know what you think.

P.S.  Trading a longer time frame like this, I would suggest paying attention to major support/resistance areas and to daily pivot levels to help guide you in both entering and exiting trades.

Just to sum up:

–   Watch for Cross Convergence providing additional support or resistance

–   When trading higher time frames, it’s important to be able to place stops that minimize your risk, but that also allow you to stay in an extended trend

Coming Up Next Week: Well, hopefully a very profitable report, one that points out some strategy adjustments I’ve made.  And maybe we’ll take a global look at the long term picture for the Euro.

As always, I wish you the best, and eagerly await your thoughts, comments, condolences, and encouragement.  It means a lot to me, seriously, to have you guys (and girls) on board for this journey.

Stay hopeful.  I do.

Jack Maverick

The GOOD Art of Speculation

How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen, author of “Creating Wealth”

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Burn that observation into your brain.  Don’t listen to the negative “savings account people” who tell you that you’re a foolish gambler for trading forex, and that you should just be like them and park your money in a savings account (currently earning a whopping 0.01% annually in the U.S.).  Those people will never help you make a million dollars – forex trading can.

You’re not a bad guy.” – Franny, to Jeff, in the movie “Kiss the Sky”

I get very, very tired of hearing people – people who have virtually no understanding of the financial markets – use the words “speculation” or “speculator” as if they’re “very bad things”.  They’re not.  Speculators provide the market liquidity that makes for relatively smooth adjustments of value and price in the markets.  Speculators aren’t bad guys, they’re helpful guys.  Speculators are the people who create fortunes, nourish ideas, businesses, and economies, and who help create “the next big thing”.  Bill Gates and Steve Jobs were speculators; Warren Buffett is a speculator.  All venture capitalists – the people who fund start-ups for new ideas and new businesses – are speculators.

Speculators are the good guys, not the bad guys.  Consider Paul Tudor Jones, one of the most successful speculators of all time, who parlayed a career as a cotton futures trader into becoming one of the 500th richest men in the world today.  In 1988, he used his fortune to create the Robin Hood foundation to fight poverty, one of the most innovative and effective charitable foundations ever created, and one that contributes over $200 million a year to alleviating poverty and helping people achieve their dreams.  Uniquely, the board of directors pays all of the foundation’s operating costs, thus enabling a full 100% of donations to go directly to poverty-fighting programs.

Be proud to be a professional speculator.  Don’t let people make you feel like you should slink around in the shadows with your coat collar pulled up to hide your face.  Rather, you should walk with your head held high – like a championship athlete, a famous actor, or an accomplished writer.  You are a member of a profession that only a few people even aspire to, and even fewer are notably successful in.

Speculation – the Road to Riches

People who really know how to create a fortune – people like Robert G. Allen, quoted above, or Robert Kiyosaki, author of “Rich Dad, Poor Dad” – will plainly tell you that –

A)You’ll likely never get rich just working at a job – very few people ever do, and

B)The best way, and the easiest way, to build a fortune is to put your money to work for you creating more money, and that involves speculation

Think of virtually every legendary “rich guy” – Rockefeller, Vanderbilt, whoever else you can think of – they were all speculators, men who took risks in order to build incredible fortunes.  And aren’t those the people that you aspire to be like in the financial arena of your life?

Modern usage has made the term speculator a synonym for gambler and plunger. Actually the word comes from the Latin ‘speculari’, which means to spy out and observe. I have defined a speculator as a man who observes the future and acts before it occurs. To be able to do this successfully — and it is an ability of priceless value in all human affairs — three things are necessary: First, one must get the facts of a situation…Second, one must form a judgment as to what those facts portend.  Third, one must act in time, before it is too late…If action is delayed until the need is apparent to everyone, it will be too late.” – from “My Own Story”, by Bernard Baruch

Investopedia notes that there is a critical difference between speculation and just plain gambling, as speculation involves taking a calculated risk, and the outcome of speculation is not dependent upon mere chance.  When I buy Aud/Usd, I’m not just hoping it will go higher, I have logical reasons for believing that it is more likely to go higher than it is to go lower.  And not only that, but I have calculated the risk/reward ratio and determined that my potential profit significantly outweighs any potential loss.

I’d like you to particularly note Baruch’s observation that speculation is “an ability of priceless value”.  People who take the necessary time and make the necessary effort to become successful speculators are like professional athletes.  They are the cream of the crop, the top 1% who stand head and shoulders above the crowd.  Speculation is indeed a profession, and it is both an art and a science.  The science part involves analyzing the data and calculating the potential risks and rewards; the art is developing a feel for the markets and for trading, the kind of feel that allows you to detect the earliest rumblings of a coming earthquake-like shift in price and value, and to act on them.

So, what are the keys to being a successful speculator?

I’ve found that luck is quite predictable. If you want more luck, take more chances.” – Brian Tracy

I will tell you how to become rich…Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett

In investing, what is comfortable is rarely profitable.” – Robert Arnott

After analyzing the available data – which, in trading, includes fundamental factors and news, along with price action and technical indicators in the markets – you should first calculate the potential risk/reward, profit/loss of various investment opportunities.  Then add in your intuitive feel for the market, developed through the time and effort actually spent trading.  You should view every trading day as an athlete views practice and games – that is, as valuable time spent honing your skills and making yourself a better “player”.  And then, as Bernard Baruch teaches, you must act, before future price movement has become clear to pretty much everyone on the planet.  Take a calculated risk that promises potential rewards that are significantly greater than the accompanying risk.  This may sometimes necessarily mean pressing the boundaries of your comfort zone – buying when others are selling, or selling when others are buying (as Buffett stated, “be fearful when others are greedy”).  Speculators aren’t expecting to be right on every trade; they’re merely aiming at making massively more money when they are right than the amount of money they may lose when they’re wrong.  Again using the example of venture capitalists, they don’t believe that every business they invest in will ultimately be successful – but they invest their money having carefully calculated the odds that the profits from just a few of their investments will be significantly greater than any losses incurred from investments that don’t work out.  Warren Buffett follows essentially the same formula – Berkshire Hathaway hasn’t become massively profitable by being right 100% of the time, but just by seeing a lot more on the profit side than on the loss side.  Carefully calculating rewards and risks, having the courage to act, and minimizing losses while maximizing gains are the characteristics that define successful speculators – and that eventually make them wealthy beyond their wildest dreams.  (By the way, those characteristics also guide the Double Trend Trap strategy that you can find here at Winners Edge.)

Dare to dream.  Dare to be a speculator.

One of the main characteristics that distinguish professional speculators is that we’re willing to risk losing in order to win; willing to take a few losses in order to make the colossal gains that create genuine wealth.  Not everyone is willing, or has the stomach, to take those risks.  “Savings account people” don’t.  But people like Rockefeller, Buffet, and Bernard Baruch do.  Which group of people would you rather belong to, be associated with?  Would you rather make a 1000% return on your money…or just 0.01%?

Me, I’m a speculator.  And happy to be one.  I have my own business – my trading business, that is; as a speculator, I’m not dependent on anyone else for my income; and I have the ongoing opportunity to make more in a month, or even a week, than most people make in a year.

Jack Maverick

Winning Trading with a Good Short Game

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In trading, as in golf, the importance of having a good “short game” simply cannot be overstated.

It remains true that the majority of traders seem to have a built-in prejudice against selling short, and a corresponding predisposition to buying long.  This has been particularly unfortunate for some traders in the recent past – using the futures market as an example, virtually the entire market was essentially a bear market throughout the last two decades of the 20th century.  If you weren’t a good short seller, that’s a 20-year period during which it would have been very difficult for you as a trader to make any money.  (I’ll just note here, for those of you who may be trading it, that the overall bull market in basic commodities that began around the turn of the century is likely to continue for at least another three to five years.)  However, even bull markets have down cycles in them, and so it’s still important to be ready to go short when it’s appropriate, even when the overall market trend is up.  (Cocoa, in the 1990’s, after rocketing above 20 for the first time in decades, came almost all the way back down to its original take-off point before shooting back up – the perfect play would have been buy-sell-buy, much more profitable than a “buy and hold” strategy.)

The first step in becoming a better trader is simply an awareness of this basic prejudice that most of us have toward playing the buy side over the sell side.

The interesting fact is that it’s really easier to make money from the short side than from the long side, as markets always tend to fall more rapidly than they rise.  Markets climb up, but they fall down.  Investors are much more prone to panic selling than they are to panic buying, and just as in the physical world, it’s simply easier to fall down a mountain than it is to climb up one.  Therefore, if one correctly enters a market on the short side, he or she is more likely to see a quick, significant profit than is usually the case with adopting a long position.  I also believe that a study of historical market statistics would reveal that a bear market tests tops, both long term tops and swing highs on the overall way down, less frequently and intensely than a bull market tests long term or retracement lows.  What this means for a trader is that, when selling short, one generally doesn’t have to take as much heat worrying about being stopped out of a position as is the case when buying long, and therefore a trailing stop can be more effectively used – protecting one’s overall equity while ideally keeping one in the market for more profits.

Take a look at the two 4-hour Eur/Usd charts below, the first one showing a recent market top and the next one a recent market bottom (the top and bottom are located right around the middle of each chart, respectively), and note the following differences:

1 – The first dramatic down candle from the top (note that it, and a subsequent big down candle about 20 4-hour periods later, are larger/longer than any up candle showing on the chart).  Even though the market retraces back up after that initial drop before falling lower, it never gets within 50 pips of revisiting the top.

2 – The brief time the market gives you an opportunity to get in on the short side at the top vs. how long it lingers near the bottom.

3 – A perfect illustration of the trading maxim that “markets fall faster than they rise” is shown in the second chart.  Look at the 10 or 11 candles just before the market bottoms out, and then see how takes the market almost 40 candles – four times longer! – just to get back up to the 1.3650 level from where it had recently fallen.

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It may help to remember things like the fact that the two most legendary (and profitable) trades of the great master trader Jesse Livermore were both short sells.  What’s the absolute best trade, the most massively profitable killing that anyone could have made in the last century? – Selling short the stock market in 1929.  Livermore did just that, and reportedly made $100 million in the space of just a few days during the October, 1929 crash, while a lot of other traders were going broke.

I have tried a number of methods over the years to help traders get over their innate prejudice to be buyers rather than sellers.  One has been to try to get them to just look at their market choices in other terms besides the traditional notions of “up” and “down”.  Try thinking, instead of choosing between up and down, choosing between “right” and “left”.  Or look at the two options of market prices going either up or down as being like the two options of “red” and “black” in roulette (fortunately, we don’t have to worry about zeroes or double-zeroes on the wheel in market trading).  At any given moment, with every new spin of the wheel, the odds are perfectly even between the two choices.  Such new perspectives, just a little twist of the kaleidoscope one views the market through, can help one more clearly see that the market itself has no built-in preference for price movement up or down.  Once you clearly realize that fact, it becomes easier to adopt and maintain a similarly neutral position, one that’s not overly inclined to favor long positions over short positions.  I’ve said it before – One should love and hate all currency pairs equally.  Don’t fall in love with Usd, Aud, or any other currency to the point where you always and only play the buy side – be ready to pounce on the short side and sell it to death when that’s the way the market is clearly going.

There are not very many guarantees in the world of trading, but I can absolutely guarantee you this: Your trading will be more successful when you are just as willing to sell a market as you are to buy it.

As always, I am open to receiving your thoughts and comments.
(If anyone’s feeling particularly generous, I could also use a new Corvette.)

Jack Maverick

Jesse Livermore Tells Us How to Make a Million

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“The only time I really ever lost money was when I broke my own rules… What beat me was not having brains enough to stick to my own game.”

“A trader has to fight a lot of expensive enemies within himself.” – Jesse Livermore

In light of my horrific trading performance last week (thank God for a NEW week!), I decided to take some valuable counsel from the legendary Jesse Livermore to help me get back on a winning track.  After all, nobody ever mastered trading better than Jesse did.  So I’m going through a few of the trading principles from this master trader, and working to freshly implant them within my slightly addled brain – feel free to join me in that endeavor.  The very first one noted above is simply stick to my own rules.  You don’t have to follow everyone else’s rules, but you should at least follow your own!  My worst rule violation last week was ignoring my basic money management rule of cutting my losses at, worst case, a 20% drawdown on the day.  Even the most unfortunate of traders should rarely, if ever, experience the 7 or 8 trading days in a row of maximum drawdown that it would take operating under that rule to completely wipe one out.  If I had abided by that rule, Monday might still have been a bad day, but it wouldn’t have rolled into becoming a catastrophic week.  Bad trading days are just blips in equity; bad trading weeks take a lot more work to overcome.  Instead of abiding by my money management rule, I allowed my emotions to get the better of me (see second quote above) and just tossed common sense and good trading wholesale out the window.  I hope and pray that I will never make that mistake again – it’s just a foolish waste of trading capital.

“I must be physically well rested and free of stress in order to have the necessary energy and focus to trade well.” – Jesse Livermore

It’s no crime to occasionally not be in an ideal trading state of mind.  Some days you’re just not in “a good space”.  The crime is in not recognizing that fact and acting accordingly, which means either successfully adjusting your state of mind or staying the hell away from the trading floor.  Me, I did neither, and sure enough it resulted in an abysmal trading day.  Focus – that is, successfully focusing your mind solely on the market and the day’s trading – is essential to success in forex trading.  Ordinarily, I do not allow anything else of consequence to draw my attention until after I have finished trading for the day.

“A trader who didn’t make mistakes would own the whole world in a month.  But if he didn’t learn and profit from his mistakes, he wouldn’t own a blessed thing.”

“Losses are the necessary tuition fee you pay to learn how to become a better trader.” – Jesse Livermore

I had to laugh for a second – That’s true, if a trader never made a mistake, never entered a losing trade, he would indeed probably own the whole world in a month.  But that just doesn’t happen.  Even the best of us make mistakes, no one ever trades perfectly, so the next best thing is to learn from our mistakes.  With that in mind, I did finally summon the courage to take a (cringing) look at my trading journal from last week, which confirmed massive violation of my own trading rules and strategy.  For instance, I ignored the guideline of “3 consecutive candles in the same direction indicates a trend in that direction”, which left me trading against the immediate trend, stubbornly and unwisely sticking with trades that then turned into much bigger losses than they had to be.

”It is emotionally difficult to review your mistakes, since the speculator must wade through his own bad trades and blunders. And these are not just simple blunders; these are blunders that cost money. Anyone who has lost money by investing poorly knows how difficult it is to re-examine what occurred. The examination of a losing trade is tortuous but necessary to ensure that it will not happen again.” – Jesse Livermore

Keeping a trading journal is one of the best practices a trader can develop.  Yes, it takes a little time to review your trading, but that time is a well spent investment in becoming a better trader.  How successful would a sports team be that never bothered to look at the game films of their losses?  A forex trading journal enables you to very clearly see where your trades went wrong – or where they went right!  You can learn things from reviewing your trading journal that you’d likely never have thought of otherwise – for example, I knew one trader whose review of his trading showed him that he won more than 80% of the trades he put on between 10 and 11 A.M., while he lost almost 80% of the trades he placed between 1 and 2 P.M.  That’s just something that one wouldn’t ordinarily even think to look at, but that can jump off the page at you when reviewing your trading journal.  Another helpful bit of information that can be gleaned from reviewing your trades is the amount of your average profit per trade.  Let’s say that a review of your trading over the course of a month or more clearly shows that your maximum profit is rarely more than 30 pips.  Then you might consider in the future taking profits whenever you are 30 or more pips ahead, knowing that, historically, you’re more likely to be stopped out than you are to make additional profit on the trade.  Finally, something else you may learn from a trading journal is which currency pairs you trade best – maybe you’re just a flat out genius at trading Gbp/Usd, but you don’t trade Eur/Usd worth a flip.

If you don’t already have a trading journal, you can download the same one I use, absolutely free, at http://www.profitscenario.com.au/Free-FX-Trade-Log-Book.html.

“Taking a wrong step in the market is nothing to be ashamed of.  But this time, having taken the first wrong step, I then took the second and the third, and of course it muddled me all up.”

“Emotional control is the most essential factor in playing the market…Don’t get too confident over your wins or too despondent over your losses.” – Jesse Livermore

I, unfortunately, did not stop at one wrong step early last week – I let “bad” snowball its way to “worse”.  But the challenge for me now is to follow the second note of advice there and not excessively fret over the losses.  It happened, accept it and move on.  Being upset about losses won’t bring the money back – what will bring the money back is resolutely seeking to learn from your mistakes and trade better going forward.  It’s okay to give yourself a good, solid kick in the butt for making mistakes that you know better than to make, but it’s dangerous to your future trading success to let that anger or frustration linger, as its psychological and even physical effects can interfere with your ability to make objective analysis and trading decisions.  The acceptance of losses is a key discipline for winning traders.  So go ahead and beat yourself up a little, but then you’ve got to let it go and get back to making money.

When I’ve fallen into a losing streak, while it’s important to take at least a brief break, for me the only way to get back to winning is to continue trading until I feel myself successfully getting back into the groove of nailing trades correctly – I have to recover trading well in order to escape trading badly.  Not to compare myself with the incomparable Michael Jordan, but Jordan always said that the way to overcome a shooting slump was to keep on shooting until you felt yourself getting back into “the zone” of shooting well.

So, what now?  Now, having hopefully learned something and become a little wiser, get back to making money.  After all, we’re still just a little bit short of our goal of a million dollars. 🙂

The teachers of neuro-linguistic programming, people like Anthony Robbins, stress the importance of using positive affirmations to achieve success – affirmations like “I am a winning trader”.  The trick is that you have to actually believe that, not just say it, but sometimes saying it repeatedly to yourself can help you believe it.  (You certainly don’t want to be telling yourself that you’re a losing trader!)  Well, I am a winning trader, so my plan for this week and every other week in the future is to trade smarter, win and make money.

Accept the losses, learn the lessons, and go make a million.  After all, that’s exactly what Jesse Livermore did.

“I got up to fifty thousand, and two days later went broke. But I had no other business and knew no other game, so there was nothing for it but to start again.”

“I was on my way to a bigger fortune than I had lost.” – Jesse Livermore

Jack Maverick