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Why Do I Blow Up My Trading?

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  The recent blog post presented ways in which we can listen to our intuitive inner voice as traders.  Sometimes, we not only fail to listen to our inner voice, but actively do what we know to be harmful to our trading and our success.  We trade well week after week and suddenly oversize a position, refuse to act on a stop, add to the losing position, and then blow up.  Or, on the other hand, we become so concerned about losses that we quickly exit winning positions before they reach their targets, leaving significant money on the table and blowing up our chances for real success.   Why does this happen?  What can we do to keep ourselves aligned with sound practices and processes?  A reader recently reached out, explaining that he once in a while experiences losses that wipe out a large share of his monthly profits.  It is frustrating to trade well most of the time, only to lose discipline and seemingly sabotage all we've accomplished. ...

Finding and Following Your Inner Voice

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  The recent post took a look at developing uniqueness as a trader, focusing on developing new sources of data and fresh ways of viewing markets.  In point of fact, however, there are many ways in which we can approach markets uniquely.  One successful money manager recently shared with me ways in which AI can improve the risk/reward of trading.  Another trader is making use of complex options structures to ride out market noise and take advantage of longer-term trends.  But one trader who wrote to me asked a unique question about uniqueness:  Can we find unique edge in how we approach our trading psychology?   Specifically, he asks, are there ways we could become better at listening to our inner voice? This is a very tricky question and issue.  On one hand, we could view our negative self-talk as an inner voice and allow our worst emotional patterns to control our trading.  On the other hand, we know that the pattern recognition of intuitio...

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Developing Your Uniqueness as a Trader

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  We commonly hear that a key to trading success is being disciplined and remaining grounded in a robust process.  That is true, but it is only part of the truth.  If we're disciplined in doing the same things as other people, we will simply be more consistent in achieving mediocre returns.  Having worked with many traders and trading firms over the years--and especially having participated in the recruitment of traders at those firms--I can say with confidence that distinctively successful traders view markets in distinctively unique ways.  They don't just have better answers; they ask better questions.  Unusually successful traders simply look at different things than average traders and look at markets in different and distinctive ways. An important start toward cultivating our uniqueness is acquiring fresh data sets.  In trading the overall stock market, one data set that I have found to be promising is the percentage of stocks within each sector ...

Is Your Trading Truly Meaningful?

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  A while back, I wrote a post about research that shows how living a purposeful life is a key to happiness and life satisfaction.  That applies to our trading , as well.  If we are purposeful about our development as traders, we are most likely to be successful *and* we are most likely to be fulfilled in our efforts.  My article for Forbes  several years ago summarized research regarding the amazing psychological benefits of living purposefully.  It's when our life is inspired by a why that we are most likely to succeed in the quest for how.   As the John Maxwell quote above points out, having a genuine and meaningful purpose is a vital part of what gives our lives significance.  The ego might look for more strokes, but what feeds the soul is the opportunity to make a "contribution" by doing something "noble" .  This is why spirituality is vital to trading careers and why so many of our trading psychology challenges occur when we plac...