Saturday, 11 October 2014

Stop the Insanity

Yesterday I wrote about Insanity being a full time job.  Today I'm going to give you some tips in the event you have gotten of course and are struggling with trading or perhaps in life in general.

  • Change is the only constant.  First and foremost realize you have the ability to change.  When you want to change the outcome of your trading or life, you need to change your approach.   Is that Starbuck's employee constantly in a bad mood?  Smile at them first.  It's sometimes hard to be friendly first but when you are then others will usually return the favor.  By changing your approach you are changing your outcome.  Having a bad trade?  Stop, think back, and analyze what you did wrong.  And perhaps it's time for a new strategy.  (new approach)
  • Short Term = Tactics.  Don't think just short term.  Even if you are a scalper or prefer short term (day) trades.   You need to think like the general and plan ahead.  You don't want to be the foot soldier in the trenches.  You want to think strategy. Long term.  What is the trend.   Today, this week, this month, this year.   Where is the market moving to. From. How long has it been moving in this direction.  What has, historically, happened in the past (think major trend lines).  Sometimes it's as simple as thinking when do the bullets stop coming, I'll take a break then, or in Forex terms, when does the market volatility (news) stop and I can ride the remaining wave.  Just like in surfing, you want to catch a good wave.   But when the waters aren't choppy and too intense.
  • Long Term = Peace of Mind.  If you are constantly thinking short term and trading on a whim, on the seat of your pants, or better put, you are "gambling" and "making quick decisions" then you need to stop the insanity and calm your mind.  It's all fine if you make a good short term trade. (Catch a good wave)  But when you make a bad trade,  and you end up in a dangerous wave then the undercurrents pull you down, you will panic and regret that decision.  So instead of making quick decisions, make smart decisions.  Think ahead.  Analyze the trend. Analyze the market.  Analyze the news.  And like a trip to the mountains, plan ahead, what will you take with you, how long will it be, if it rains what is your alternate plan.  When do you return, etc.
You need to set S.M.A.R.T. Goals!  More on that tomorrow :)