Hosted By
Robin Dayne
"The Trader's Coach"

16 years as a trading and life coach

Coaching for:
 Individual Traders - all levels
Trading and Hedge Firms
 Brokerage Firms

Trading Mindset Focus:
 Managing Loses
 Establishing a Game Plan
 Removing Mental Blocks
 Reversing a Losing Streak
 Overcoming Fears
 Improving - Consistency
 Confidence and Certainty 

"Top Ten Trading Mistakes/Solutions
Mistakes #8
They Don't Take Responsibility for Their Trading and Blame Everything Else
 
By Robin Dayne

Last week we covered the seventh topic related to traders who trade with their emotions which usually stems from an emotional "block". This is probably the most common challenge of all traders. The mistakes discussed come from the top ten that come up repetitively in my conversations with traders.

Mistakes that apply to new traders will be marked will "N" where as all the rest apply to all traders at any trading level but all are important to be aware of.

Mistakes

#1(N) No Financial Preparedness
#2 (N) A Solid Trading Strategy - There is none or too many
#3 - Trading is Easy – early wins
#4 - They neglect to develop a detailed game plan to win
#5 - They neglect to set rules that will keep them safe
#6 - Traders possess patterns on how they dealt with success and failure in the past that now effect there trading today 
#7 - They trade with their emotions and NOT their intellect

Note: Mistakes will be list in priority order with the most important being the last.

As a reminder here is the Re-Cap of 1 through 6:

· Have a plan for how your money is spent in your trading day and life
· Set up rules to stick to the plan
· Minimize your losses and manage them
· Focus on one strategy till it's mastered
· Become a "digger" and fine tune each trade
· Trading is what you make it, have fun and learn
· Be a learning sponge
· Be flexible and change with the markets
· Create a detailed game plan to win – Profits, risk rewards, targets, why you are trading, markets, size, rewards, penalties
· Create Rules that will protect your cash. Find distinctions that fine-tune a trade. Work to be as precise as you can.
· Your past beliefs, experiences, successes and failures will show up in today's trading.  Just being aware of them helps to keep them in control.
· Know when you are trading from an emotion verses your intellect. Work to break the pattern and get help if you can't

Mistake #8 – They Don't Take Responsibility for Their Trading and Blame Everything Else.

This is a topic that I used to see in the trading room when I was on Wall St. but is not isolated to trading rooms, it's just that I would hear this in conversations around a room full of traders verses now being home alone trading.

When a trader was doing poorly and can't seem to get ahead they would blame the market conditions and would say things like. "Oh, it was a bad week because the numbers came out on jobless claims and the market didn't react the way it should have."  Or "The market always does this when that happens and this time it was just off."  Losing and blaming other things around the trade are what some people do to avoid facing reality.

Another favorite excuse is my system was giving me trouble or the Broker was the problem because I couldn't get filled or I didn't get any sleep last night because the baby kept me up and my trades were just bad. 

One excuse after another after another and never taking control never taking responsibility for their actions can keep a great trader from success. Also these types of reactions can also be a sign that the person is in "victim mode". Where all the other things around them, are in control of their lives, they are not in control themselves.

Their job is controlled by their boss. Their love or happiness is controlled by their spouse or their trading is controlled by the market. They have absolutely nothing to do with what's going on and life just happens.

After working as a volunteer 10 hours a week for 3 years in the NH Federal Prison for Women I came across many, many victims. Yet, at the same time, when I was working on Wall Street, I saw the same behaviors of traders and finally came to some conclusions as to WHY?

Funny, how I was seeing some of the same symptoms with my traders as I was seeing with the inmates. The pattern was to use a series of excuses for their short comings. Additionally, after many years of coaching and seeing this pattern repeat over and over I came to realize that this could be related to the baby-boom generation as the ages of those doing this behavior also demonstrated the same patterns.

Dare we blame this on our parents if we are boomers? When you look back on the TV sitcoms it is a bit scary. Leave it to Beaver, Father Knows Best, all showed the women as victims and this could have been passed down to the boomer generation easily since it was all around us.

With that said what's a trader do to?

First, is to take responsibility for all your actions. No one is doing it to you. The market is what it is on any given day, dealing with its changes is just part of the game.

Next take notice of the parts of your trading and what you are blaming. Ask how can I be in control of this part?

Also if you are in the blame game it could also indication that you are not examining trading in detail. This process of analysis is the key to a solid trading strategy/set-up, emotional confidence and continued success.

It's also important to notice if the trading pattern of blame is a pattern that carries on into your normal day to day life. If it does then stepping up and taking responsibility overall, is critical.

Remember many patterns in trading come from the patterns in the rest of life and life patterns end up showing up in trading patterns.  So if someone is anxiety ridden in other parts of their life than being anxious will show up in their trading style.

Not taking responsibility also is an indication that facing the reality can cause some sort of pain.  So the excuses become the easy way out than facing what really needs to be addressed. Facing the responsibility of your actions takes courage. It takes the discipline and confidence and by stepping up what usually happens is, things become easier. 
You might be saying WHAT? Easier?  And yes easier is what happens because now you are in control and you have direction and obstacles become small things that need to be handled, instead of huge insurmountable mountains.

Related to trading, when huge challenges are minimized to something manageable then they tend to disappear faster rather than letting them grow, compound, get so big they never get fixed.

Steps to Taking Responsibility.

• What parts of trading are you blaming on something else?
• Example your losses, - blamed on the market
• Exits or entries – blamed on the broker
• Take each part and work something out to gain control of it. Remember there is always a way we just have to find it.
• Set up rules if you need them.
• Create whatever routines you need to create a great pattern that works
• If the first solution doesn't work try something else and get creative
• Be flexible in your approach a chameleon
• Gain control where you can

Have fun!  AND Great Trading!

Disclaimer/Nondisclosure 

ALL the information in the Robin Dayne Newsletter is for educational purposes only and is the sole property of Robin Dayne Inc. (RDI) and may not be duplicated, recorded or reproduced in any way and includes: verbal, print, e-mail, or any media vehicle without the written permission of RDI.

Trading Room Update ( S&P)

All that I am hearing and reading from the very good, day trading, crowd is last week was a tough week to trade.  It will improve.  This is what trading is all about. 

Thought for the Week: "Get through the tough times with patience and discipline; the good times will show up."   John Hay

Since the market crash in late 2008 we have seen investors favor quality stocks that pay dividends and have steady earnings. Fast growth companies and equities with physical resources like commodities have also done well.

Let's examine the monthly charts of gold, silver, oil and natural gas – and observe how they have traded in comparison to their mining equities

Gold – Monthly Chart
Looking at the monthly chart as far back as 2004, we see that gold has formed the same patterns repeatedly. This has created a stair step pattern and allows us to calculate measured moves and a time frame for this to take place.

As we can see gold has broken its 2008 high and is starting another rally which we have seen several times before. I figure we could see gold rally for another 3-5 months and possibly reach the $1500 -$1600 level before forming a multi month or year consolidation.

Investors around the world are buying gold because it is a physical product which has been proven to hold its value. Read More

Commodities continue to perform well as the US dollar tests the October lows. If we step back and take a look at the weekly charts of the gold, silver, oil and natural gas ETFs we can get a better feel for what to expect in the coming week.

Trading commodity ETFs can be a very fun and profitable experience when done correctly. The first things I always analyze are the longer time-frame charts. This allows me to see past support and resistance levels and determine whether the investment is trending up, down or sideways.

Let's take a look at gold, silver, oil and natural gas.

GLD ETF – Weekly Chart

The weekly trend is crucial for understanding the power behind price movements. We can see that the GLD ETF is in a strong up-trend and that price closed at the high on Friday which is a strong sign. I would expect to see gold continue higher on Monday because of this strong momentum.
We can see that over the past 2 years GLD has formed a large cup & handle pattern which is very bullish. A breakout above the handle will trigger investors to buy gold

as a long term investment and that is what we are seeing now... Read More.

A Hold Your Party Hats!  1200 is still a ways off.
November 22, 2009

Hold the party! After the "Talking Heads" all told us these last two weeks now that we cleared 1100, 1150 was just around the corner and 1200 was the year-end target, the market does what it has to to cause the most pain to the most people. It turned around and broke back below 1100. 

Why do this? Because the market can. Last week, I showed you some of the signs that the market would rest. We had a giant down trend line going back to the '07 highs. We had triple "D" on the daily chart and the market was ready to pause but not crash. Furthermore, the week before I spelled out the "bonus put trade" under the market. Most money managers have in this one year, '09, have earned the best gains than any other of the last 9 or so years. So lock them up! 

The aggressive managers (i.e. hedge funds, HFs) would setup a bearish put spread. For example, HFs would buy a near the money 1075 put and sell a far out 1000 put for January. Then, to help pay for the puts they would sell some OTM calls being content to let the market play out. They would sell partial equity positions if the market went higher to prevent loses on the up side. 

In fact, the large option open interest in November calls that told us the market should correct. NET Chat Room traders and those who have taken the NET course know this. "They", those mysterious forces aligned against traders, needed the market lower to inflict the MaxPain on the bullish call buyers. Someone has to sell those calls. I've written about "They" in my new book too. Over the 28 years I've observed "They" have been on the profitable side of this trade over 95% of the time and that's not coincidental. Read More.

Free Presentation

"Managing The Trading Temperaments"

Presented by
Robin Dayne