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 #10
They lack the  experience and trading "time" to develop their disciplines
 
By Robin Dayne

Last week we covered the ninth topic related to traders that don't manage their losses financially and emotionally. The management of emotions ties into the last mistake which I call the BIG "D" or discipline.

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
Mistakes
#8 – (N) They don't take responsibility for their trading and blame everything else
#9 - Lack Experience Managing Losses, Financially and Emotionally

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.
· Take responsibility for your actions
· Attack each and every challenge until you find the root and find a solution
· If you can't control what you want to do in your trading than it's critical you get help to reverse this pattern
· Examine a loss as soon as it happens
· Stay in emotional control
· Set rules that protect your cash

Mistakes #10, They lack the experience and trading "time" to develop their disciplines

OK, so we are now at the most important topic facing ALL traders at any level from new to seasoned, discipline.  Yes the big "D" is what gets to the heart of all trading issues, discipline.

I know you have heard it or read it in ever trading book published a hundred times over that discipline is the one thing every trader MUST master, and well they're right. Without it, traders' are lost, unruly, out of control and trading by the seat of their pants.

So let's take a look at some specific trading challenges and where disciplines can help gain control of the trade.

1) Entering the trade too soon:

This is a combination of the emotion anxiousness and no discipline or set-up criteria for the proper entry. Letting emotions take over your trading will only cost you money and increase emotions.

Discipline: Having specific set-up criteria allows the trader to remove emotions and enter the trade at a specific price point. Entering a trade in the system ahead of time and waiting for it to be filled also allows the mind to stay focused on indicators reactions verses the system entry keys minimizing am emotional reaction.   

2) Exiting a trade too soon:

This is also a combo of emotions & discipline. If the fear of entering the trade is in the mind set, the fear of losing could be the catalyst. Lack of disciplined in the exact price to close the trade can be hindered by the emotion of fear that is really driving the trade. It can be so powerful that it will force the trader to close the trade before they should.

Discipline: Placing the stop loss order as well and the profit target order in the system can offer a bit of help here as long and the fear isn't overriding it all. I have seen traders even sit on their hands so as not to close the trade too soon, before it hits their target. That's because emotions can be so powerful they physically encourage the trader to close too soon.  If you are experiencing this, where you intellect is being controlled by emotional actions over and over then coaching can help as this is the trading "block".

3) Repeated losses:

One loss after another says immediately the trader is not examining the trade and is going onto the second trade without making a change.  A VERY common error, which can cost a lot, increase frustration and led to over trading and can potentially blow-up an account.

Discipline: Examining a losing trade right after it happens is the best way to improve ones trading strategy, set a routine discipline and make money by lowering the win/loss ratio. I have said this many times because it IS the one thing traders can do that has the greatest impact and well worth the effort. Yet it takes the big "D" to do it.

4) Preparedness:

When a trader gets up in the morning and starts up the computers and trading system, the first trade can set the tone for the day and trades that follow. However just jumping into any trade and losing can set the wrong direction.

Discipline: Great traders commonly have the discipline to review the market early, even the night before works well to minimize any over-night stress and can start the next day with a clearer picture. By reviewing the market and indicators ahead of time and getting the feel for the day a trader can have better odds of a great first trade. This takes discipline to set up a morning trading routine.  

Some more disciplines to incorporate into your trading

• Create some life disciplines that will afford you a great sleep
• Create a morning ritual that will have you prepared for the first trade
• Spend special attention to the first trade of the day
• Be disciplined in examining a loss right after it happens
• Stay with the trade – when taking a trade that doesn't seem to be working and it's closed, keep the focus on the market to see if you can determine or change the outcome of the next similar trade. Look for a distinction.
• Be disciplined in creating your rules that protect your cash
• Re-read rules as a morning discipline
• Be disciplined in managing cash
• Work each trade with the appropriate risk management
• Be disciplined in your trading stops
• Be disciplined in when you should stop for the day if you are off
• Make a list of "must never do's" in your trading and be disciplined in sticking to them
• Be disciplined and trade emotionless
• Create and stick you your trading plans

 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

With the economy as it is and so many having a tough time it's important that those who have more give back and contribute in some way.  I have always felt that trader's foster a very special breed of people.  They have been given the gift to be able to make more than the average person and have the ability to make a difference. 

This holiday those with more have the opportunity to help others in need and there are so many. Be in the holiday spirit of giving more than any other year. Here are some shocking statistics.

1) Of the nations unemployed 15% are veterans of the Iraq war
2) As much as 3.5 million experience homelessness in a given year

   - 40 % are families with children the fastest growing segment  
   - 49% are African -americans
   - 23% are veterans

3) Shelters are being over run
4) Food Bank donations for the homeless and elderly are at a low

 Wouldn't it feel fantastic to contribute to those who need it knowing you made a real difference. This is the time to step up and help however you can.

Remember giving can be in many forms - Donate unused bedding to a shelter. Checking closets for canned goods for Food Banks, buy a gift for toys for tots, donate time to an organization for the holiday meal. It's also a great family activity that can teach your children what giving really means and how to be gratefulf for what we have. 

Suggestions:

1) Check the shelters in your area they typically have lists of what they need

2) Donate unwanted items of clothing, sundries, bedding and food 

3) Give to organizations who feed shut-ins (those who have disabilities and can't get out)

4) Donate to toys for tots

5) Donate food to the local soup kitchens and food banks

6) Donate your time to an organization who is offering a holiday meal 

How can you give back? 

Create a great holiday and feel great about it! It will make your day!. 

May you and your family have a safe and wonderful holiday! 

The market has had a fantastic week so far for stocks and precious metals. The financial and energy sector are underperforming which is a concern, but we continue to hold our positions and will wait until a reversal to lock in our gains.

Things seem to be lining up for stocks and precious metals to take a breather, which is in line with the Dow Jones Seasonal chart below.

Let's take a look…

Dow Jones ETF
You can see from looking at the chart the repeated pattern of price rallies, leading to exhaustion and a test of support, followed by another repeat of the pattern. It looks as if the broad market is setup for a test of support which could happen within 2-4 days. Read More

"I used to be a London-based equity analyst for many years for a major investment bank before starting to trade online about a year ago. Although I had the requisite analytical skills developed from my previous career, a good understanding of how stocks move on new information, and even though I had worked out a strategy that was suited to my particular strengths, I found myself completely lacking in confidence when it came time to bet money on my ideas. I was working very long hours with no profits to show for it. As Robin would say, I was totally blocked. I would show up at my trading desk in the morning wondering which profitable trades I would fail to act on because I was too timid.

After spending four sessions with Robin, I had a breakthrough. Through her techniques, I was able to move from constantly criticizing myself for my mistakes, to a far more constructive attitude of focusing on what actions I needed to move beyond this emotional block. For me, this came down to the insight that although I'm an intuitive person, and hate rules, I could actually develop a more formalized set trading rules that worked for me. Based on this insight, I analyzed all of my trading ideas from the past year (mostly non-executed) both good and bad, discovered that I would have been increasingly profitable as the year went on, using a fairly straightforward system.

I am not yet at the point where I can execute trades with total confidence. However, as a result of my sessions with Robin, my attitude to trading has completely changed – I am making trades, I am learning new things that I never thought were important, and each day I look forward to refining my trading system.

I am a firm believer that everyone has to develop their own trading system and should not rely on a canned approach. But the psychological problems we face as traders fall into certain common patterns. It doesn't matter what your system is – if you've got a psychological problem, Robin has seen it many times before, and will have techniques to help you learn how to move beyond it." Coaching client London,England

Free Presentation

"Managing The Trading Temperaments"

Presented by
Robin Dayne