A new week is about to begin. And already I am champing at the bit ,raring to go.

The reason will be apparent as you go through part three of this article.

I thoroughly enjoy trading, plus I also enjoy having this website.
Also I love Finding out whatever helpful educational information that I can, for putting onto this site.

Not only do you learn but I do as well. It is a two way street.

And I have never stopped learning and I hope you don’t stop learning either.

Coming up shortly are two informative reports from the “Fat Prophets” who are a well known, prominent advisory group here in Australia.

Now on to the final part three of this great article.

Part Three.

Don’t Trade for the Money.

I have met many successful people, and the one thing that they have in common is that they love what they do.

Many have told me they can’t believe that they actually get paid for doing what they do. They have so much fun they feel guilty taking money for doing it. Many successful people will tell you that they would do what they do even if they weren’t paid at all.

Successful people don’t work for the money.

Work hard and love what you are doing and the money will follow. Successful people work first and count the money later. Sometimes they don’t ever count it, and some don’t even know (or care) how much they have. They just know that they have enough to allow them to continue what they are doing; working hard and having fun.

Love trading for its own sake.

I know that many individuals want to trade because they think that they can make a lot of money easily and quickly. Because of the low start-up costs for trading as compared to other businesses, they think that trading should be the easy road to riches. Their goal is to make a lot of money fast.

These are the people who come to seminars and want an indicator that will guarantee profits. They don’t want to learn the ins and outs of the business; they want the magic indicator that will get them the money they desire. They are doomed to failure.

I remember a guy named John walking into a seminar I was about to teach. He threw up his hands and said, “Ah, Traders! I am glad to be home.” This individual was a successful trader.

John loved going to seminars, not so much for the techniques and indicators, but for the camaraderie. He loved being around traders, talking with traders, analyzing trading strategies and techniques, and learning about the latest and greatest trading technology. He loved learning the latest features added to TradeStation and finding out a new way to use EasyLanguage.

He loved designing new indicators, and spent countless hours working on new and different ways to exit the market.

He was excited about getting up early in the morning to monitor the overnight market information and checking what the S&P was doing in London. He looked forward to calling his broker and putting in his orders. He loved watching his strategy run on TradeStation. He was exhilarated when he had to call his broker and give him a lot of grief for the latest bad fill. He even loved losing trades. Even when he had to take a losing trade, he was still doing what he loved to do—trade.

John is a successful trader. He loves what he is doing. And as long as he can keep on trading, he will be happy. The money he makes is secondary, but he makes a lot of it. He can’t believe that he can have all of this fun and make money as well.

Concentrate on Execution.

All of your market and strategic analysis should be done before the markets open.

The strategy design should be clear in your mind. You should have the historical Performance Summary of your strategy at your fingertips to remind you of the personality of the strategy, how much money it has made over time, and what its largest string of losses in a row has been.

You should know what kind of orders you are going to place, and how you are going to communicate this to your broker.

The last thing you should have to worry about during market hours is where the market is going, and whether to be long or short. Your strategy will tell you all of this.

You should not be concerned about the news, or even if you are making or losing money. You should not be concerned with analyzing the market, always reserve this for when the market is closed.

The only thing you should be doing during market hours is concentrating on effectively executing your strategy. If you can’t execute your strategy effectively, there really is no point in trading.

There are two sides to trading, strategy development and trading execution. During market hours is when you should concentrate on execution and nothing else.

Always Be In the Market.

I have always characterized trading the trend as keeping your costs down while waiting for the big move. We know that to trade profitably, especially for trend traders, you need to be in the market for the big move.

Many traders stay out of the market when it’s quiet and try to predict when the big move will occur. These people invariably miss the big move.

Instead of trying to predict when the big move will occur, your task becomes to minimize your losses and drawdown while you are waiting for the big move to occur. This is a different way of looking at trading that focuses on managing cash flow and risk rather than finding magic indicators and making good predictions.

Trading thus moves from a hobby to a business.

The only way to ensure that you won’t miss the big move is to always be in the market.

Buy High - Sell Low.

Probably the most interesting rule for successful trading is to Buy High and Exit Higher, and Sell Low and Exit Lower.

This is counter-intuitive to what we all have a natural inclination to do, which is buy low, sell high.

Most great trading strategies are counter-intuitive. They are not based on our normal human nature and the normal human reaction to the markets. They consistently make money because they are designed with market sense not human common sense.

In the final analysis, any market is just a collection of individuals making decisions and placing money in the market based on these decisions. Most of these individuals are doing what comes naturally to humans, buying low and selling high. Statistics show that 95% of these people lose money.

To be a successful trader, you have to do the opposite of what this 95% is doing. It isn’t easy, because it goes against your human nature. But any strategy that is successful over time will most likely follow the rule of Buy High, Exit Long Higher and Sell Low, Exit Short Lower.

NOTE: What you have just read has been presented solely for informational or educational purposes. No investment or trading advice or strategy of any kind is being offered, recommended or endorsed by the author or by TradeStation Technologies or any of its affiliates, agents or employees.


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