Reblog: 3 Valuable Trading Psychology Tips From Our Loss In $SQQQ


The mind of a trader

Knowledge has to be improved, challenged, and increased constantly, or it vanishes – Peter Drucker

We couldn’t agree more, especially in the business of stock trading; the more you learn, the more you earn.

As such, much of the knowledge we share on this blog focuses on recapping technical chart patterns of past stock and ETF trades that led to successful, profitable outcomes.

However, equally priceless lessons can be learned by walking through losing trades that did not work as expected.

In this article, we share three insightful, psychological tips (or reminders for experienced traders) from our recent losing swing trade in $SQQQ.

Grab your notebook and continue reading to improve your success as an equities trader…

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Reblog: Trading Limits – You Have to Start Thinking about the money


trading limits

Good traders are known to be masters of risk management. Risk management includes following a detailed trading plan, setting stop and limit orders and managing traders without succumbing to emotions.

Good traders also tend to follow a robust trading plan that focuses more on ensuring that the traders do not lose their capital, while the profits are seen as only secondary. As part of this pursuit in achieving trading excellence, professional and seasoned traders follow the concept of setting limits on their losses, on a daily, weekly and even monthly basis.

Trading with limits ensures that the traders do not end up sabotaging themselves in the heat of the moment as emotions can often override logic when a trade turns into a loss.

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Reblog: 20 Reasons Why 90% of New Traders Don’t Make It


  1. They risk too much to try to make so little.
  2. They trade with the probabilities against them.
  3. They think trading is easy money.
  4. Instead of focusing on learning how to trade they focus on getting rich.
  5. They blow up due to improper position sizing.
  6. With no understanding of the mathematical risk of ruin they are doomed after the first long string of losing trades.
  7. Blindly following a guru that leads them down the road of destruction.
  8. They don’t do their homework.
  9. They trade opinions not robust systems.
  10. They go looking for ‘trades’ instead of a methodology.
  11. They have no trading plan.
  12. They attempt to piggy back on the trades another trader but don’t understand the risks.
  13. Most new traders quit when they realized how much work is involved in trading successfully.
  14. Most traders quit when they learn how many losing trades they will have to have to get to the winners.
  15. New traders quit if they do not have a passion for trading itself.
  16. Many new traders will give up the moment they realize that trading does not have guaranteed income, you are an entrepreneur.
  17. They are not willing to pay the tuition to learn to trade in time, study, and losing trades.
  18. They are crushed by the learning curve that they do not work hard enough to get through.
  19. We lose a lot of new traders when they realize that trading is actually harder than their job.
  20. The traders that don’t make it quit when they were tired, frustrated, and stressed out, the winning traders quit after they had figured trading out.

The original article appears on newtraderu.com and is penned by Steve Burns. It can be accessed here.


Reblog: How To Be A Grown Up Trader


I do not think traders start making money until they mature and understand the big picture. I have been on this journey myself and went through the wild excitement of the internet bubble, day trading and the experience of making a few hundred dollars in a few minutes the first time and the delusion of the get rich quit trading scheme and the expectations of doubling or tripling an account within a year. The game of trading has large amounts of money flowing through the markets that we want to capture for our accounts and can give rise to emotions that make us act immature through the delusion of ignorance, ego, and greed. We can easily become unrealistic and go down the wrong road, it is crucial for success that we stay on the right road.

1. Quit believing all the riches of people promising that you will be rich if you just sign up for their newsletter, seminar, or join their premium service. Look for realistic resources to learn from. The more hype the more the probability of a service being a scam.

2. Quit thinking you are going to double or triple your account in less than a year, even if you do that just means in almost all situations you are taking on too much risk. If you can achieve a 20%-25% annual return then you are among the best traders in the world, these are close to the annual returns of legends like George Soros, Warren Buffet, and Paul Tudor Jones.

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Reblog: 25 Powerful Trading Lessons From Jesse Livermore


jesse livermore

Born in 1877, Jesse Livermore is possibly the most famous trader in history.

He started trading at the age of 14 from bucket shops. His tape reading skill was so good that these bucket shops eventually didn’t want to do business with him.

At his peak in 1929, he was worth $100 million. Ultimately, he lost his entire fortune when he broke his trading rules.

The same trading rules which made him millions, caused him to lose everything when he lost control of himself.

Still, there are valuable lessons to be learned from Jesse Livermore’s trading experience.

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Reblog: Do NOT Look For a Trading Strategy That Suits Your Personality


What Feels Comfortable and Natural Usually Doesn’t Work

Why do almost all speculator lose money? They lose because successful speculation requires that we consistently do that which is psychologically uncomfortable and unnatural” – Richard Weissman

There is a persistent overall tendency for equity to flow from the many to the few. In the long run, the majority loses. The implication for the trader is that to win, you have to act like the minority. If you bring normal habits and tendencies to trading, you’ll gravitate toward the majority and inevitably lose” – William Eckhardt

Most of what we naturally do and think do not work in trading. Here are a couple of examples:

  • We are naturally inclined to cut our winners short and let our winners run

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Reblog: Why You Should Take the Profits and Run!


This article is for those traders (new or experienced) who have trouble booking profits. Do you often see large profits evaporate as the market reverses against you, leaving you feeling powerless and confused? If so, you know how frustrating it can be and you know exactly what I’m talking about.

Poor target placement, lack of experience, greed, arrogance and stubbornness are all issues that can cause traders to not take profits off the table.

I appreciate this article may conflict with some of my core beliefs and teachings on taking profits since typically I encourage people to aim for a 2 to 1 risk reward or greater and to set and forget stops and targets. In theory, this makes sense, but in the real world, as you likely already know, there are still a great number of trades that almost hit your profit target or where a trade has moved quickly in the right direction and you’re staring at a giant profit… and then the next day or week, the market goes the other way and your once giant profit has become a much smaller profit or even a loss.

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Reblog: When Should You Move a Stop Loss to Breakeven?


forex breakeven stop loss

This week’s question comes from John, who asks:

When should a trader move a stop loss order to breakeven?

This is one of the more common questions among Forex traders. It’s also one of the most challenging to answer because it depends on several variables.

And it makes sense that it’s a common dilemma. After all, who doesn’t want to be in a risk-free trade?

But believe it or not, moving a stop loss too soon can be more harmful than taking a full loss.

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Reblog: Candlesticks – Forget Candlestick Patterns – This is All You Need To Know


Understanding candlestick patterns goes far beyond just remembering and recognizing certain formations. Many books have been written about candlestick patterns, featuring hundreds of different formations that supposedly provide secret information about what is going to happen next.

Truth be told, it will make no difference to your trading performance whether you know what the Concealing Baby Swallow, Three Black Crows or Unique Three River Bottom are.

What really matters is that you understand what the candlesticks in front you of you tell you about price structure, trend strength, buyer/seller dynamic and the likely path for future price movements. 

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Reblog: The Disciplined Trader


When an aspiring trader asks me to recommend books on technical analysis he or she is often surprised at my answer.  While I do have a technical favourite or two (besides my own) I am quick to redirect him or her to books on trading psychology.

Technical analysis is worthless without a thorough understanding of the psychology behind winning and losing, buying and selling, fear and greed, risk versus reward, the past versus the future, the knowable versus the unknowable.  Technical analysis is best used as a psychological tool to help the trader manage random price action and the emotions associated with it, not as a way to predict price action and thus confirm the trader’s egotistical need to be right.  Psychology first; technical second.

One of my favourite “go to” authors on trading psychology is Mark Douglas.  Although he is best known for his book Trading In The Zone, Mr Douglas’ first book The Disciplined Trader is a gem of a read also.  I recommend both but start with The Disciplined Trader.  It will help you better understand and appreciate the principles discussed in Trading in the Zone.

The following is from the INTRODUCTION and provides the thesis for the book. In it, Douglas discusses the following:

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