Friday, May 27, 2016

Unrealistic expectations

Someone who decides to trade using a trend following approach should expect to achieve a win rate between 30% - 40% across a large sample of trades. Depending on the parameters used, this could cover a period of several years.

If this were the case, then the sample would automatically cover the mixture of different market states, be it trending or non-trending, stable or volatile. You may also include in that period a sustained trend in a downward direction as well as an upward direction.

Sunday, May 22, 2016

The concept of acceptance

A critical part of developing the correct mindset in trading is grasping the concept of acceptance.

I first came across this from reading the books of Bob Rotella, a sports psychologist famous for his work with a lot of top class golfers. His first and best well known book in this area is Golf is Not a Game of Perfect.

Saturday, May 21, 2016

Working on yourself

In my previous post, I talked about ensuring you take action, after having a clear plan in place. 

But, for many, this is where any psychological issues start to rear their head, as you start to implement your plan with real money at risk in the market.

Most people solely focus on trying to develop a method that can generate profits from the markets. But, how many market participants do you know who spend just as much time (if not more) working on themselves?

Friday, May 20, 2016

Taking action

Over the years, one thing I have found is that people are very good at talking about what they want to do. Following through and putting any plan into action is a different matter, though.