Excuses are a Waste
May 5, 2009 at 11:04 am
As the producer of a stock newsletter for the past 5 years (wow, time is flying), I get a lot of email.
Some of it is from subscribers, and some of it is from people who are ‘tire kickers’ and haven’t decided yet to take control of their trading. They want to know if what we offer can get them to the next level.
A response is always provided to them of course, but it’s not always what they want to hear. The deciding factor is their attitude.
You see, in their emails they often times want to air out some garbage and tell me a story. It goes along the lines of “I used to be good at this, then I hit a rough patch and now I’m lousy. Can you fix me?”
And although their ‘story’ might be factual, that rough patch probably isn’t what’s holding them back. It’s their reliance on it. They lean on it like a crutch, because it gives them an identity, a safety net to fail into – for now. They have to stop relying on that and get back on track.
There will always be people like that, and neither I nor anyone else can bring about a change in them – they have to do it for themselves. They have to move beyond that mindset and toward something they really want.
The “I’m losing and it isn’t my fault” attitude is an excuse, and it’s not going to get you anywhere. A lack of success can’t be blamed on circumstances.
I know because I’ve had that attitude.
A few months ago, I was putting together an educational course for people who want to learn trading. It was a big project and it brought about some demands on my time which previously weren’t there. What used to be free time was replaced for a little while with work on that project, and so my situation was temporarily different.
Out of my routine, I fell into a trading funk for a few weeks. I was wrong a lot and irritated regularly with my trading. And I told myself it was because of that project. When asked by friends how my trading was going, I’d say “it’s been better, but I’ve been really busy with the educational course” – as if anyone cared. As if that project were the reason why I was struggling with my trading.
Nonsense.
Once I stopped relying on that excuse and decided to get a grip – and it is a decision – I was finally free to get back to the winning ways I had been missing. I wasn’t being driven by every little tick which might have gone against me, and I wasn’t as afraid that open profits might quickly disappear. As a result, my trading improved rapidly.
But it all began with my attitude.
So here’s the thing… If you’ve got loser’s limp and you find you’re frequently making excuses for your trading results, consider this a wake-up call.
That attitude is leaving you stationary like a turtle in mud (no, not that kind of Turtle), and you’re going nowhere fast. Get back on track mentally and move toward the attitude you know you should have.
The past is there to serve you, not hinder you, so take what you can from it and move forward. Once you’re thinking better, I’ll bet you start trading better too.
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Trader Interview With Jeff White
April 26, 2009 at 10:25 am
First of all, welcome to those of you who have arrived from TraderInterviews.com! There are literally hundreds of trading articles here published over the years to sort through, so spend as much time here as you’d like and come back often.
To those of you who are regulars here, I am honored to have been asked for another interview from Tim Bourquin from Trader Interviews. That’s a site I’ve frequently visited over the years to tune in for excellent podcast-style audio interviews with top traders. I’ve learned quite a bit there, and it’s one very useful place to study not only the methods but also the mindsets of traders who are finding success in today’s markets.
They do an excellent job of locating traders across various markets with a wide range of styles, which provides a great resource for any trader who wants to stay sharp & continue learning.
Here’s the direct link to my interview, which runs 40 minutes. You can listen on the site or download the MP3 and put it on your iPod if you want it on the go.
Enjoy the interview & I hope your trading week is a great one!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
7 Trading Lessons from the Masters
April 13, 2009 at 1:58 pm
As a trader who loves my job, I find it difficult to witness any big event without looking for some parallels to trading. The sports arena is one of those places, and it doesn’t take much of a stretch of the imagination to recognize frequent lessons that are applicable to trading.
Just about anytime someone’s talent or emotions are being tested, you’re likely to also gain some insights which can help your trading.
This past weekend in watching the Masters tournament, I couldn’t help but notice a few things about some of the players. Here are some of the things which caught my attention and the corresponding lessons…
1. Some days you don’t have your best game, but grind it out anyway. Tiger was a little off all week. He verbally discussed it, but it was also easy to see if you’ve watched him at all when he’s at his best. But in spite of not having his “A” game, he chose to grind on every shot and concentrate as much as possible. He came up a little short, but he had a chance on the back 9 on Sunday – which he admits is all he ever wants. What if you’ve done the same all week with your trading by the time Friday afternoon rolls around – do you think you’d be satisfied?
2. Stick with your style and be confident in your approach. Jim Furyk isn’t a long hitter compared to the guys he’s competing against, so he of all people is not going to overpower Augusta National. He had to lay up on some of the par 5’s, but he kept to his strategy and it put him into the mix with a chance to win come Sunday. Waiting for your setups to come along as a trader means not attempting unfamiliar approaches or those which don’t work for you. Trust your method!
3. When you’re hot, ride it – and enjoy the moment. Anthony Kim at age 23 is just one year older than Nick Adenhart, the Angels pitcher who died tragically last week. Recognizing the similarities of not only their ages but careers as professional athletes, Kim was touched by Adenhart’s death. Thinking of how brief life can be, Kim decided to enjoy himself and put life into perspective. After reading about Adenhart on Friday, Kim went out to set a Masters record by making 11 birdies in a round. He got out of his own way and allowed his talent to take over. When you’re reading the market well and your trading is on track, trade a little bigger and see what happens. It’s only trading.
4. Take your lumps with maturity. During the second round on the 15th green, Padraig Harrington addressed a short birdie putt when a gust of wind moved the ball. In accordance with the rules, he replaced the ball to its original position with a 1-stroke penalty, and made his par putt. Having won the previous 2 major championships and having been in good shape on the leaderboard Friday, Harrington would have had plenty of reason to be upset or shaken. But he went on about his business, not allowing a bad break to rattle him. When a good trade suddenly reverses on you or unexpected news costs you money, accept it like a mature trader. Keep plugging away with unflappable confidence.
5. Embrace opportunities with confidence. Kenny Perry has been close before in a major, having been beaten in ’96 in a playoff during the PGA at Valhalla in his home state. He’s won a number of times on the PGA Tour, and worked himself into the lead during the Masters. Success would have meant he’d become the oldest winner of a major championship, as well as his first major win. Facing the opportunity which Sunday brought along, Perry knew he’d either succeed or fail. And he relished the chance to walk that fine line. Trading afraid or scared won’t bring the success you crave. View every chance as an opportunity to build greatness, and face it head-on.
6. A little bit of nerves are good. Chad Campbell found himself right in the mix all week as he searched for his first major victory. When asked by the press about his nerves being on such a big stage and facing such a huge opportunity, he openly admitted that he had been and would be nervous. He also noted that having some nerves are a good thing, that they show you’re intense enough to care. When you find yourself nervous over trades, is it because it matters to you or is it because you’re afraid?
7. Don’t let a poor start steer your day. Angel Cabrera struggled early on Sunday as he found himself playing in the final group. At 1-over par through 5 holes, he was playing worse than everyone else on the leaderboard, losing ground and clearly uncomfortable. But he settled himself down and played solid for the remainder of the day, finishing with 3 birdies in his last 6 holes to get into a playoff – which he eventually won. Allowing your first few trades of the day or the week to define you isn’t the best course of action. Even if your year is off to a poor start, you can still salvage success. Stick with your game plan and trust that your experience and effort will pay off. Your attitude is a weapon – either you hurt yourself with it or you use it to your advantage.
I hope your trading week is a great one!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
The Importance of Losing Small
April 7, 2009 at 2:05 pm
Losses are inevitable, but small losses are easily overcome.
I put that first because if you don’t read anything else here, I want you to be sure and see that.
In fact, that one statement could be considered the key to my trading. I remind myself of it often, and when I’m staying disciplined, I am able to see it in action.
Take Monday for example. I took several trades…7 to be exact. I made money on only 2 of them (no, it wasn’t a great day), and yet my net P&L was only slightly red. Just a little bit negative – that’s all. It was a down day for me, and yet it was about as painless as they come. A minor loss. All because I was able to recognize quickly when I was wrong, and immediately focus on damage control.
The trading landscape has changed dramatically just in the past year. The market is moving differently, the stocks which are in focus are a different group, and there are even some new fees and rules making their way into the fray. Nonetheless, there is still one constant: the trader who is able to lose small is able to stay in the game. He’s able to survive, which means he’s able to profit. And that of course means he’s able to thrive.
Two Big Benefits
Keeping those inevitable losses at a minimum carries with it a pair of huge benefits…
First, when you’re wrong, the damage is far from devastating. Falling off a pony compared to falling off a Clydesdale sure makes it easier to get up and get back on that horse. And trading is all about getting back up. It’s an attitude thing. It’s important to stay in the game, and that means an occasional bump or bruise is far easier to overcome than the occasional amputation. The point is this – protecting the downside offers you a safety net to fall into. Why not use it?
Second, confidence stays high, and that’s a major factor for a successful trader. Confidence should be protected just as vigilantly as one’s capital, for it can be considered your psychological capital. Just as money isn’t easily replaced, confidence isn’t quickly replenished once it’s wrecked. Looking out for yourself by way of small and limited losses means you’re taking no big hits to your trading account or your psyche.
So on those days when you’re just not feeling it and you feel a step or two behind, be quick to recognize it and live to fight another day. Keep the damage minimized, and you’ll be able to return tomorrow fully prepared to erase that small deficit quickly.
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Focus on the Process Now, Results Later (Part 2)
March 27, 2009 at 11:21 am
In recently looking through some archived posts, one that caught my eye was Dave Mabe’s from last summer. In that post, Dave covered some very important aspects to sticking with your trading plan.
Then in catching up on some reading, I saw where David from Trade-Ideas was just discussing this yesterday over on the Trade-Ideas blog. He brings forth some very good points, and I’d encourage you to check it out.
All of this got me thinking about where should our focus be as traders?
I’ve discussed this subject before (in Part 1), but it’s certainly worth revisiting and expanding on.
The Game vs. The Score
One of the ideas that I’m continually reminding myself of is that how you play the game is absolutely crucial to success. It’s about the process. Today’s trading platforms tell us the “score” at any point in time as measured by our P&L, and while that’s pretty nifty, it isn’t always beneficial. I feel it’s generally more important to focus on the process rather than purely the results. Here’s why.
“There’ll be time enough for countin’
When the dealin’s done.”
With those lyrics, Kenny Rogers said it about as good as it can be stated, but I’m still going to try to build on it! I’ve had a Kenny poster on my office wall for several years, and while he may have been talking cards (or life), the same lesson applies to trading!
I’m sure you’d agree that the trader who is focused more on his method than on his P&L has a distinct advantage over the trader who lives and dies by the red and green numbers flickering in his position window. If you can get to the point as a trader where you’re confident enough in your approach to stick with it for even a single session without relapse, you’ll be in a great position to build on that as a habit. And good habits pay off.
Driven By Numbers
The market dishes out regular lessons on this topic to me, so it’s something I’m continually working to improve on. It’s not uncommon to start reacting to the P&L as the day progresses, backing off when mental thresholds for a “good” or “bad” day are approached. That can be a 2-way street though. It can allow you to retain profits or prevent additional losses, but how can you add to your bottom line if you’re in a constant dilemma of whether or not to take that next signal?
You’ve got to play in order to win.
Anytime I get too focused on the results (P&L) during the process (in the middle of trading), my decisions tend to be adversely affected, which in turn has led to a plethora of mistakes. It happens when my attention is fixated on my P&L – when it begins to cloud my thinking and skew my view.
Sometimes striving to achieve some set level of profits for the day can result in overstaying my welcome in trades. At other times, that desire to secure a good day has caused me to exit prematurely from good trades which were giving no reason to bail. Both are cases in which my P&L was the driving force behind my decisions. But the tape should serve that purpose.
Maybe you’ve been there too.
The Buzzer
Flexibility and a willingness to adjust your plan when conditions deem it necessary doesn’t have to mean going into shut-down mode. If there’s clearly a reason to call it a day or a week, then don’t force the issue. Whether that means a lack of setups to play or just poor risk/reward conditions, submit to it. And if you’ve hit a drawdown level that tells you it’s time to stop losing, then do it.
But barring that max-loss situation, when it comes to trading vs. not trading, the deciding factor shouldn’t solely be your P&L. Commit to deciding on a per-trade basis, and see where it gets you. Take the good entries which come your way if you know they are suitable for your method and the overall conditions are in favor for your approach. Otherwise, pass and continue waiting.
At the end of the day, add it all up. Some days will be mediocre, some will be excellent, and some you’ll be eager to forget about. But as long as you keep doing the things which you know will deliver success over time, there’s no reason to let the scoreboard distract you. That’s just one of many ways to get beaten.
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
Now on Twitter
March 26, 2009 at 4:59 pm
Knowing that Twitter probably ‘tipped’ some time ago, I have nonetheless been reluctant to join the ranks of Twitter just because I was afraid it might be a time sponge. And with much more going on in life besides trading, my time is valuable – just like yours.
But as a semi-early adopter in the world of blogging (guys like Charles Kirk and TraderMike both began before me), I knew it would be something that might make me better. A better trader, a better writer, and better at interacting with those in the trading community. The trading community is kind of a small world when you get down to it, and I love being in the conversation if there is one.
So, just wanted to punch out a quick post to let you know that I’m now on Twitter and you can follow me @thestockbandit if you’re on there too. I’ll be putting up some thoughts & ideas there, some quality links worth checking out, and I definitely hope to have some good conversations with you as well!
See you there!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
SEC Fees Set to Quadruple on April 1
March 16, 2009 at 6:45 am
This is no April Fool’s joke. I wish it were – it’d save me a lot of money! But the SEC is making a mid-year adjustment to transaction fees, effective April 1, and it’s a significant one.
Right now, traders pay $5.60 per million dollars in sales, which granted, doesn’t sound like much. It’s a cost of doing business for traders, and not a very steep one at that when added to commissions.
However, in 2 weeks when the SEC fees change, it will go to $25.70 per million – more than 4 1/2 times higher. That’s not quite as bad as the proposed Trader Tax which was recently making so many headlines, but it’s more real and it’s going to happen.
Putting the Pen to Paper
If you’re actively day trading, here’s what this translates into. Depending upon your level of activity and the size you tend to trade, this could translate into several thousand dollars more per year in fees for you.
For example, let’s say you sell an average of $1M in stock each day. That’s a very feasible number considering you could sell 20,000 shares (buy + sell = 40,000 total) over the course of the day at an average price of $50 (20,000 X $50 = $1M). For that activity level right now, that would basically cost you $5.60 in SEC fees on top of whatever your commission is. With the new structure, you’d pay $25.70.
Do that 5 days a week, and it’s $100 more per week. Trade every week at that level, and you’re looking at a hike of $5,200 over the course of the year.
Here’s a link to the SEC Mid-Year Adjustment to Fee Rates document itself for more intricate details if you want to check it out.
Bottom line: keep improving as a trader and it’ll be fine!
Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]
