Conservative Confidence
June 14, 2006 at 9:05 am
Rotella has a chapter in his book with the title, Conservative Strategy, Cocky Swing. The idea is to select a conservative strategy which will allow you to confidently execute it. Trading offers many different methods to find profits (even if they’re all hard to find), so why not pick one you’ve got confidence in? Every golfer can relate to those holes which tempt you to stretch your abilities. Some holes require that you hit your very best drive in order to cut the corner, but standing on that tee box with a shred of doubt will almost always leave you in trouble! Laying up with a 3-wood will give you a much larger target, and you’ll swing more confidently. Similarly, you can trade too big for your own good, but that will likely just lead to mistakes and errors in judgment as every tick is just too expensive to bear. Back down your size a bit and approach the trade with a clearer head – you’ll find that your exits will improve drastically because you’re thinking about the process rather than the result.
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Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Trading, Trading Psychology, Golf[/tags]
Perfection Isn’t Required
June 13, 2006 at 5:05 pm
Bob Rotella wrote the best golf book I’ve read with Golf is Not a Game of Perfect. It’s full of great stories and lessons about how to perform at your highest level, whatever that may be. Trading isn’t about being perfect either! No matter how long you’ve been at it, no matter what your strategy, no matter how well the market is trending, we’re going to make mistakes as traders. Accepting that fact on the front end makes life so much easier! Do your best to minimize your errors, play to your strengths, and count up the score when you’re done.
By the way, subscribing to this RSS feed will mean you won’t ever miss a post!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Golf, Golf Book, Trading, Trading Psychology, Trading Strategy[/tags]
Never Force It
June 13, 2006 at 9:05 am
One of the lasting lessons my Dad taught me in golf was “never force it into the wind.” Growing up in Oklahoma and then playing college golf in west Texas, I can tell you that I’ve played a lot of golf in the wind. Headwinds tend to compound your errors by accelerating the spin on the ball, so what might normally be a slightly errant shot will often end up way off line into the wind.
Similarly, the market tends to compound our errors when we get too active under suboptimal conditions. Overtrading in a choppy market easily leads to poor performance, so the idea is to never force trades if they aren’t there. At some point, you’ll find a tailwind in the market which makes your strategy easier, and that’s the time you’ll want to be more aggressive.
By the way, subscribing to this RSS feed will mean you won’t ever miss a post!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Trading, Trading Psychology, Golf[/tags]
One Shot (Trade) at a Time
June 12, 2006 at 5:05 pm
Easy to say, hard to do! Golf is ideally played one shot at a time, taking each individual opportunity as one occasion to hit a shot you’ve practiced. Trading is so similar! Recent trades in which you turned a profit or a loss will have no impact on your next trade, but human nature leads us to think they may. Trading poorly can leave you timid and afraid of the next trade and the losses it may bring. On the other hand, a string of winning trades (good shots) can leave you overly confident and subject to the pitfalls of carelessness. Striving to take each individual trade as they come (one shot at a time) will help you find a balance between respect and confidence toward the trade you’re facing.
By the way, subscribing to this RSS feed will mean you won’t ever miss a post!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Golf, Trading, Trading Psychology, Winning Trades[/tags]
Trading & Golf Series – Introduction
June 12, 2006 at 9:05 am
Welcome to my Trading & Golf series! My first series generated a lot of interest, so here I am kicking off my second. Also, thanks to reader Ned who suggested that I do a post on this topic! Little did I know I would end up making a series of posts instead (during U.S. Open week, no less).
Trading and Golf are two of my biggest passions, and I’ve spent many years improving my skills in both endeavors. Each of them teach similar lessons on a regular basis, so I figured why not point a few of them out!
Trading and Golf are two things which can never truly be mastered, which means they present endless challenges. In both arenas, however, there is always plenty of room for improvement!
I’ve been a trader since 1998, and I’ve been an avid golfer since 1989. Although some of you might have been doing either of these for much longer, hopefully I’ll be able to share some thoughts which you find helpful. Please feel free to contribute your ideas along the way!
Golf-wise, I played competitively on levels ranging from high-school tournaments to Nike Tour events. I’ve shot under par more times than I could possibly remember, but I’ve also had plenty of 3-putts and double-bogeys along the way! 🙂 Like trading, golf will humble you when you least expect it, so it’s never a good idea to start thinking about how good you think you are! I’m a full-time trader and also have experienced a broad spectrum of results ranging from times when I didn’t know which way was up, to other times when I felt I couldn’t lose. Like golf, trading will involve some surprises, disappointments, and plenty of insights about yourself.
When it comes to golf or trading, neither one has a memory. It doesn’t matter what you did yesterday or last year, you’ll still have to prove yourself. This constant challenge can be a battle, but it can also be so incredibly rewarding. Trading can of course provide untold sums of money when you become great at it, but both golf and trading can give you extreme confidence when you overcome a challenging situation. It can be a tremendous rush to nail a trade or hit the perfect golf shot, and few things are as exciting as breaking through your old limitations to post your best trading day or 18-hole score.
This series will include more posts which will be presented in a bit more of a rapid-fire style than normal as I experiment with some shorter posts on a more frequent basis. I hope you’ll stick around and feel free to add your thoughts in the comments section anytime you feel like it! I definitely don’t know all there is about trading OR golf, so your participation is welcomed as always!
By the way, subscribing to this RSS feed will mean you won’t ever miss a post!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Golf, US Open Golf, US Open, Trading, Trading Psychology[/tags]
Headed for the Beach!
June 1, 2006 at 10:55 am
I’ve talked before about when not to trade, but it’s time for me to do that for a different reason – VACATION! So, I’ll be stepping away for the next week or so to put in some beach time and R&R. I love to trade and always enjoy staying connected to the market, but I think it’s a good idea a few times a year to get away and have some fun to recharge your batteries. The market will be there when I get back, and the trip will be a blast. Needless to say, there will be no posts while I’m away, but when I do return I’ll be starting my next series which came by request!
Stay patient out there, stick to your disciplines, and trade well. If you need some quality reading material, check out The Kirk Report, TraderMike, or some of the StockTickr Interviews. See you soon!
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Trading, Stock Market, Kauai[/tags]
Very Superstitious
May 25, 2006 at 5:13 pm
There’s little controversy over the idea that trading is largely a head game. Throw in the spectrum of emotions which ranges from pure elation (home-run trade) to all-out fear (blown stop-loss), and there’s a lot of ground to cover. Somewhere in between the extremes is the topic of superstitions, and traders have a LOT of them! Those with risky jobs are the most likely to have superstitions or rituals in an effort to maintain emotional stability, so traders certainly fit the mold! What about you?
As a rule, I’m not a superstitious person. I’m not afraid to step on sidewalk cracks or walk under a ladder. I don’t carry a rabbit’s foot or consult my daily horoscope. I really just do my thing each day and try not to worry about the things which are out of my control, even though it sometimes rains after I wash my car ;-).
When it comes to trading, there are lots of opportunities to think that our actions lead to certain results. The only one I can think of for me is that early on in my trading career, I’d set my dream car of the week as the wallpaper on my PC. It was completely unrelated to trading, but somehow I found that about every time I’d do that, I’d go on a losing streak! I think it probably just made me overly aggressive in an effort to make the money to buy the car, but the result seemed to be poor trading. These days, you won’t find a sports car as my PC wallpaper, which is probably ironic coming from the guy who just claimed not to be superstitious! (Traders know when to break the rules, right?)!
I’ve seen and heard of some interesting trader superstitions:
– I knew one trader who insisted on using the same keyboard he started trading with, no matter which PC he happened to be using. There was nothing special about the keyboard of course, he just felt it was his connection to good trading mojo.
– One trader avoided the number ’13’ at all costs. He wouldn’t bid or offer at the .13 level, he wouldn’t take a 13-cent winner or loser when he wanted out, and he traded more carefully when it was the 13th of the month.
– Jim Cramer has mentioned wearing a lucky green shirt to snap out of a losing streak back at his old hedge fund.
What about you? Do you have some funny trading rituals or quirks like refusing to wear red when you’re long? Do you avoid specific restaurants because of the “poor track record” it’s left you with on trading days after eating there?
Let’s have a little fun with this…..if you’ve got some trading superstitions, post them in the comments section below and let the rest of us know if we’re missing out on something that works for you!
Have a fun & safe holiday weekend,
Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
