R.H.Y.T.H.M Trading Part 4
T - Trust yourself
Trader's need to trust themselves and their decisions. If you can't trust yourself, how can you possibly progress? If you are constantly doubting yourself and your decisions, how can you trust yourself to know to take the trade? If trading resides in you, AND IT DOES, then the personal trust that you must offer yourself is an absolute necessity. If you can't trust yourself to respond to the signals and the setups, you will not be able to trade successfully, consistently. If you are in constant anger about yourself or disappointment in why you took a trade, it reflects upon you and your inner self, your self-control. If this is not in an optimal state of mental control, then you are fighting a battle not only within you, but also within the trade itself. If your thoughts are clouded with anger, the clarity of stock action is clouded to. This will not allow progressions. Trust yourself both in decision and your skills to execute the trade.
H - Harness your strengths and understand your weaknesses.
What is it about you that makes you a trader? Why did you choose this business? What strengths about you provide you with the right temperment to trade successfully? You like risk taking, able to make quick decisions, unemotional, etc.? Here are my thoughts taken from a list that Vadym offered me:
„h The market exists to give me profits
„h Trading is fun, not a frustrating experience
„h If the market doesn¡¦t do what I expect then I must reconsider
„h Money is not the subject of my focus; stock movement is
„h Losing is part of the process of making money. Any particular loss doesn't make me a loser.
„h Trading is a game, I know I can win
„h Every losing trade is an opportunity to learn. I am learning constantly
„h I don't have to be in market all the time. I can wait for an opportunity to come.
„h I don't trade for recognition, I don't have to prove anything, others opinion is not of interest for me
„h These are my strengths that allow me to focus on the trade, which is the only thing that matters once I take it.
What are my weaknesses?
Plenty, but two major ones: Ego and it constantly nags at me. When I am in a great day, such as 3 straight wins on INKT today, I feel less vulnerable. I feel like nothing can touch me. If I was not aware of this feeling, I would certainly have some negative event tell me that I am not this good, usually leading to a large loss. I am aware of this feeling and I control it to some degree, not taking atypical chances. But there are times when my ego inflates my expectations and it's something that needs constant control and awareness.
Another one is the ability to expand my intuitive perception of stock action. I can make 1/4 and 1/2 all day long. But for me, my personal goal and a my ending "nirvana" is to continue the process by which I can take more out of each trade when the risk evaluation is safe and the stock continues to "behave" so to speak. I want to enhance my "rhythm" with stocks that have more potential and it is a very big uphill battle still to do so. It's a weakness, but one that I am aware of and one I continue to develop.
Lastly:
M - Master your emotions
Emotional control is a very tough subject. It comes to me with understanding my traits as a trader. The early emotions of a trader are fear of loss and expectations of great gains. There is no way a trader with these two emotions can progress. The fear of loss does not allow a trader proper risk control having larger stop losses. Greed of great gains in each trade does not allow one to read the stock as it moves. The trader will catch a few nice ones, but the losses tallied in expectations of these gains everytime will outweigh the overall gains. Fear on the other end is a lack of response. The signal says enter, the mind says don't. This is where trusting yourself is big.
Don't think, respond. You think, you hesitate. You ask "really" when "rate cut" is announced and you miss the entries. See the signal, respond. Developing and retaining self-control through proper mastering of emotions will allow you clarity in watching market action as well as individual trade action. Let the R.H.Y.T.H.M become a part of your trading to successfully progress as a trader.
Maybe this strikes a chord with you. If so, great, if not, not everyone has to agree with me anyway. I look forward to any discussion on your views.
Respectfully,
Chris |
