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Main » 2011 » September » 8 » 15 of the rules Trader: Mantra to work on discipline
15 of the rules Trader: Mantra to work on discipline

Mantra to work on discipline The success of any trader depends on its discipline. Proportion of subjects in a successful trading is 90%.The formula is simple: trade with discipline - and you will succeed, or trade your undisciplined - and you lose.

For 20 years I am a trader and member of the Chicago Board of Trade - Chicago Board of Trade (CBOT). During the successful operation of scalpers on the trading floors I had to trade in different markets: it was the 30-year Treasury bonds at CBOT, S & P 500 at the Chicago Mercantile Exchange (Chicago Mercantile Exchange - CME), as well as securities on the London International Financial Futures ( London International Financial Futures Exchange - LIFFE). And now, to the extent of free time I'm trading futures E-mini Dow at CBOT.

I received a bachelor's degree in business administration from the University of Denver, but the student himself sverhodarennym never considered. Formal education in the field of technical analysis I have not. I can not even build the formulas Fibonacci levels or moving averages - not to mention how all of this trade. Education in the fundamental analysis of markets, I also do not. I do not understand the causal link between the actions of the Operations Committee on the Federal Open Market (FOMC) and the price behavior of treasury securities or other assets.

Then how I get to be successful from day to day trading in the markets for more than 20 years? The answer is simple: I trade with discipline and respect for the market. When the input is incorrect, then the transaction is closed immediately, and when the input is good, then too much greed fades into the background. I was satisfied with a small profitable trades and small losses.

Currently, I teach clients trading techniques, discipline and risk management. And my teacher was one of the most prominent traders who worked at the CBOT, - this is David Goldberg. David scalped for a long time on the site spreads for futures trading in wheat and at the same time was head of the company's Goldberg Bros. - This is one of the largest clearing firms of their time on CBOT, CME and the Chicago Board Options Exchange (Chicago Board Options Exchange - CBOE). It was he who taught me the rules of trading discipline. I listened to his advice and eventually worked with increasing success. But now the student became a teacher himself.

The wheel of success

"Wheel of Success," as I call it as applied to trading, consists of three spokes. The first needle - it's content. The content includes all internal and external market information that traders use to make decisions.

The most important type of content - this is inside information about the market. In fact it is about time and price that can be obtained at the exchange. At the end of a day, we all make trading decisions in this time and start from the time and money. To effectively scalping, we need a live stream of quotations, reliable execution and good trading platform. Without instant access to information about prices and times we'd traded in the dark.

The second arm - it's mechanics. By this we mean how you get access to the market and what methods are using to open / close transactions. To succeed in trading, you need to learn to start mechanics. A common mistake on the keyboard can cause thousands of losses. The whole trading day can be ruined due to an error entering the market.

Master the methods of entry into the market and their performance - it's like to learn how to ride a bike. The process of opening and closing is smooth and moves to the level of subconsciousness. Fast and efficient execution of transactions, especially if you skalpiruete will allow you to make a deal with Bid Ofer or before its competitors. Remember, the fastest survive.

The third and most important spokes in the "Wheel of Success" - a discipline. If you expect to succeed, without discipline, it can not be achieved. Trading discipline must be 100% of the time - in every transaction, every trading day.

Below 15 of the rules provided for the strengthening of trading discipline, always repeat them. You need discipline to do their job again and again, tune in to it. Do you want to - believe it or - no, but many of my clients read through these rules before the start of each trading day. Takes a maximum of three minutes. Imagine that this activity - prayer, it reminds you how to behave during the trading session.

№ 1 MARKET PAYS responsibly.

Disciplined trading will bring you more money than take away. On the market you can say the only true thing: discipline = higher profits.

№ 2 Disciplining BE EVERY DAY, IN EVERY TRADE, AND THE MARKET FOR THIS repay. But do not say that you are trading are disciplined, if it is not even 1% of the time.

Market discipline is essential. But this is not the case when you say that you throw, for example, smoking. If you all are saying that throwing and shooting themselves on a cigarette, it is clear that the habit you have not got. If you are disciplined in making a deal of nine 10, then about any subject is not the question. To spoil the result of the trading day rather undisciplined one transaction. Discipline must be present in every transaction.

When I say that "the market for you to repay it," here we mean the following: you are closing money-losing deal with a smaller loss than stubbornly hold transaction until it is empty your account. So, if I lose on the deal $ 200, not $ 1000, if not shut it down earlier, then we can say that I was "saved" $ 800 for the future, quickly closing the deal unprofitable.

№ 3 LOTS always decreases if the trade goes bad.

All good traders follow this rule. Why continue to lose on the positions of five lots (contracts), if you can save money simply by reducing the amount of the next deal? If I happen two consecutive losing trades, then the next I was always reduced to the minimum lot. If the following two make a profit, the transaction volume increases to normal.

Imagine you're a football player who misses two consecutive terms on goal. But the next time you simply loosen the force of impact, just to set up the sight and reach the target. The same applies to trading: Reduce the size of the transaction and earn her a couple of points (or even play the breakeven), but after two such transactions you can increase your lot.

№ 4 DO NOT LET Trades TURNS loss.

We are all at least once so broke that rule. And we must stand in front of goal - to work so as not to disturb him in the future. We are talking about greed factor. The market was supportive to you and went where you'd expect, but a small profit does not suit you. And so you keep the deal in the hope that the price still goes on, as you had hoped, but the market turns around and goes against you. Naturally, you begin to fluctuate, but in the meantime deal brings greater and greater loss.

You should not be greedy. This is just one of the transactions. During this session you will still have time to open a lot of transactions, and even more in the future. In the market there is always a possibility. Remember: none of your transactions should not drastically affect the outcome of the day with both positive and negative side. You should not be greedy.

№ 5 LARGEST LOSS must not exceed the highest win.

Document every transaction you do. If, for example, you can see that today the largest profit trade has brought 50 points, then do not let the losing trades exceed the 50 points. Do not let the losses exceed the accumulated profits, as in fact the result of such trading day will be a net loss on two trades. Is not good.

Number 6 developed his method and work strictly on it. DO NOT CHANGE THE TRADING STRATEGIES like a glove.

I usually ask of his students that they have compiled a list of specific conditions (patterns, models), which should open the transaction. I do not have to know what methods they use, but I want to be in front of them was a list of rules, templates, or patterns of price behavior that can make a deal. Need to make a game plan.

If you hold a time-tested trading strategy, but today it did not work, drop it and do not look for a new one. If your strategy is effective in more than half the time, then work on it.

№ 7 Be yourself. Should not strive to be someone else.

For all the time in the markets I have never had to open a transaction volume of more than 50 lots. My colleagues, for example, who work on trading floors, open up the position of 100-200 lots in one go. But for such a huge volume of transactions I do not have the emotional or psychological training. And that's fine. I know that my comfort zone - this is where some 10-20 lots per trade. And if you work a lot when more than 20, I instantly "I cut a" deal. Just on an emotional level can not cope with this volume. Such transactions often lead to losses, as I find it difficult to trade on the same professional level as that of a transaction in 10 lots.

If we talk about the volume of transactions, and learn to find work in their comfort zone. You are the one who you are.

Number 8 must always be the solvency of the state to come to the market the next day and continue working.

Do not bring themselves to the precarious state when losing more than you can afford. Worst of all, when you want to trade, but can not because Money merged, and the broker can not trade until you top up your account.

From his students, I demand that every day they have been calculated limit losses. For example, today you can not lose more than $ 500. Once the loss is $ 500, immediately turn off the computer and go to rest until tomorrow. Tomorrow you can always go back to work.

№ 9 RIGHT TO INCREASE Lot must earn.

Too many new traders believe that if they had $ 25,000 in the account, they can open the position for 5-10 contracts E-mini S & P. There is nothing more absurd. If you can not successfully sell one lot, then why do you think that you will sell ten?

From his students, I demand a profitable trade for ten consecutive days, using only the minimum lot. When they do trade for ten days in a row only to profit, in my opinion they deserve a chance to increase a lot - and so another 10 days of trading only in profit.

Remember, if you sell at a loss for the two lots, then reduce to one working lot.

№ 10 OUT OF losers.

You will not be a failure just because now you are running a losing trade. However, you'll be to them, if not close it at the moment, it is recognized that it is unprofitable. I often wonder how accurate market indicator is intuition. If suddenly you have a feeling that the deal could result in "moose" that so soon will be. It's time to tick, I mean.

There is not a trader who performs only profitable trades. I usually happens the day 33% losers, 33% of transactions in zero (breakeven) and 33% of profitable trades. Trades I cut immediately. It is worth it, usually inexpensive. And even if I lose a day or close to zero two-thirds of transactions, you still walk home in the black.


Once you feel that an open transaction can result in "moose", it is better to close it immediately. "While the deal has not closed - do not call it losing" and "do not worry, the price will come back" - so often say traders working at the sites, and not the fact that they know what they say. Once a trader says this phrase, it becomes clear that he understood the fate of the deal - the price is not coming back, it's time to exit the market.

№ 12 Throw HOPES AND PRAYERS. AKA lose.

During his youth, when I was undisciplined trader, many times I prayed, "God of the market" can not even count how many times it was. I prayed, hoping to get out of a sticky situation of the market. I prayed that some deity intervened in the situation, but it never happened. And then I realized that the pleas to the "gods of the markets" were godforsaken thing. Just bring down the market!

№ 13 FORGET ABOUT THE NEWS. Is history.

That's never understood why so many online traders all day listening to or watching the news on CNBC, MSNBC, Bloomberg News, FNN, etc. "Talking heads", which are news programs, in fact, too little versed in the dynamics of markets or the behavior of prices. Only a few of them, and that fact has not had to sell at least one contract at any site or online. But they tend to try to look into his case.

One guy from CNBC, which is now an "expert on markets and trade on them," before the phone clerk on the court, where there is a trade treasury bonds. Well, in that case he an expert! Neither he nor others can not bring you benefit. Think of all this, as it is in reality ... as entertainment.

The fact that the news that enter the program on TV, are already "obsolete". The essence of the news has been reviewed and "employed" professional players long before she "news" was broadcast. Do not trade on news. Too late.

№ 14 do not speculate. AKA lose.

In all the years that I trade and communicate with traders, I never had to meet a successful speculator. It is impossible to speculate and constantly make big profitable trades. Do not speculate. Be a trader.

The answer here - short term scalping. When you trade in kratkosroke - small gains and even smaller losses - then the probability of a profitable day or week is much higher.


This rule is very strong reaction. Traders ask: "How is it like to lose money. Yes, you're crazy?"

No, I'm not crazy. Here we have the following in mind: you have to take for granted the fact that the majority of your transactions will be losses. Trades must be closed immediately. Love the closing losing trades without delay. So you will save a huge commercial capital and will become a much better trader.

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