I have been coaching a number of new traders over the last few months, the 5 week beginner options program has been very popular. As part of this program, I have two one on one coaching sessions with each participant. Its wonderful to work with individuals based on their needs because it also gives insights as to where traders are struggling. Here are three things that I wish everyone would remember about trading:
1. The Tortoise and the Hare have some important lessons for all traders.
Whether you are new to trading, or have been trading for years, it is important to remember the key skill of being patient, and realising that trading is about the long game. Only a minute amount of extremely lucky people will gamble with their money and hit it rich on the first go (this is not trading, this is gambling). Most will need to spend time trading in the markets in order to gain mastery as such, you need to trade more like the tortoise, and not the Hare. While you may want to go all in, and place big trades looking for big wins, most often the trader trying to sprint to the finish will only end up blowing their account up. The trader with smaller, achievable goals, who focuses on trading many times with attainable profit targets, and cashing in the profits as you go, will often be the most successful.
2. Don’t Second Guess Yourself
While I agree that everyone needs to create goals and look to take the most profit out of the market as they can, if you are always going back and second guessing your trades, you are probably making yourself more unsure of yourself. Once you have taken profits in a trade, don’t go back an hour later to see what the stock did only to say to yourself; “man I left profit on the table, I should have held the trade to make more money”. When you make decisions to exit a trade, you do it in the moment, in real time, so it is important to make the decision making process as routine as possible. Try not to let your emotions get in the way of making the decisions for you because the worst case scenario is that you hold a trade too long because you are second guessing yourself…and you lose the profit you had. Instead, write down the evidence, the reasons why you are getting out the of trade at the time. This process will help to ensure you are making rational decisions about your trading.
3. Don’t make you trading goals 100%
Nobody should try to get 100% of your trades right, this is unrealistic. I can’t tell you how many people think that it is about perfection, but think about it, how many other things in life do you do that you do at 100% all of the time?...be honest with yourself…
Setting achievable goals for yourself will build your confidence and help you focus on your strengths in trading. Create trading goals that are focused on keeping losing trades small, and finding many achievable winners.
Futures contracts are typically what traders think of when the hear the term day trading. Options contracts can be day traded just like futures contracts or stocks. There are many options strategies that work well for day trading.
In this episode of the SCT Podcast, we discuss out favorite ways to day trade futures, we talk about the best days of the week to day trade and the strategies and stocks that work best.
As the seasons move from summer in to fall, the markets are also seeing a transition. As a trader, you want to be able to recognise the signals to ensure you are adjusting your trades according to how the market is moving. The S&P is no different. This past summer was particularly interesting as there was more volatility on some days with the volatility drying up the following week. We had days with lots of trade entries, followed by days without trades at all. The market which saw highs of 2900 in January with a hard sell off, and moved back to the 2900 this summer. Now that the markets are coming off the highs with a controlled move, it looks like the fall is setting up for some great trades ahead.
One stock that has been headlining is AMZN with its projections to be a 3 trillion dollar company. While everyone is discussing this stock Im not trading it. Typically, this is a stock that look to trade every week, it is usually a great candidate for a credit spread on a weekly basis. The stock trends nicely which allows for strong levels of support or resistance, providing ideal levels to trade based on credit. But, for now, as the stock is printed on most media outlets, I will be waiting to trade it.