Peak Performance Trading Tips

Last week I discussed Chapter 12 of the second edition of Trade Your Way to Financial Freedom, talking about how five investors with totally different ideas, including opposite views on what might happen, could all profit from various scenarios. The five such investors included:

  1. Mary; a long-term trend follower.
  2. Dick; a swing trader.
  3. Victor; a value investor
  4. Ellen; trading on the idea that there is some order to the universe and the markets
  5. Ken; a spreader-Arbitrager

These five people were contrasted with Eric who buys and sells when he gets an urge to do so and Nancy who follows the advice of several newsletters. The reason they can all profit is due to the shared ten common characteristics most good traders have. Last week I gave you five of the ten characteristics, including

  • A tested, positive expectancy system that's proven itself
  • A system that fit them and their beliefs
  • Totally understanding the concepts they are trading
  • Knowing how to determine 1R and
  • Being able to evaluate the risk-reward of each trade

Hopefully, you can see how those five qualities would start to generate success. However, I also said there were five equally important (if not more so) qualities and asked you to guess what they are. Let's see how you did.

The sixth key quality is that they all have a business plan to guide their trading. I've been talking about the importance of this plan for years. Most companies have a plan to raise money, but you need such a plan to help you treat your trading like a business. I've done a complete teleseminar on this topic and also a prior workshop. You can learn more about these on my website, plus future tips will also be about this topic.

The seventh key quality is that they all use position sizing. They have clear objectives written out, something that most traders/investors do not have. They also understand that position sizing is the key to meeting those objectives, and have worked out a position sizing algorithm to meet those objectives. We'll be discussing this is subsequent tips.

The eighth key quality is very critical. They all understand that their performances are totally a function of their own personal psychology and they spend a lot of time working on them selves. This area has been my key focus for many years - teaching traders to become efficient, rather than inefficient, decision makers.

The ninth key quality is that they take total responsibility for the results they get. They don't blame someone else or something else. They don't justify their results. They don't feel guilty or shameful about their results. They simply assume that they created them and that they can create better results by eliminating mistakes.

This leads to the tenth key quality, understanding that not following their system and business plan rules are a mistake. We've discovered that the average mistake can cost people as much as 4R. Furthermore, if you make even one mistake per month, you can turn a profitable system into a disaster. Thus, the key to becoming efficient is to eliminate such mistakes.

If you want more information on any qualities, we can help you. In addition, I'd suggest that you look at Chapter 12 to see how these seven traders approached the sample situations that were given and how they made/lost money.

Dr. Van K Tharp


Source  
Here's How to Trade Smart During the Coronavirus Outbreak

You are more likely to panic when your investments drop and quickly sell out your assets, however, this is not the best way to react when the markets go down...

How our fears prevent us from quitting the unsatisfying career?

You may have heard the famous quotation: "Have the courage to follow your heart and intuition. They somehow already know what you truly want to become". There are the...

How To Regain Your Confidence In Trading

After a big loss, confidence can be running low. Of course, there are many reasons why traders lose money, such as lack of market knowledge, a poor risk...


Top Five Attitudes of Successful Traders

Your attitude toward trading makes a huge difference in your success. What kind of attitude and thinking that's needed to become a successful trader? You should always...

Five Reasons Why Traders Lose Money

By various estimates, 90% of traders have lost their deposited funds (completely or partially) at least once while trading in Forex. We compiled the most...

Popular trading myths you need to stop believing now

If you are a newbie trader and you want to learn the truth about trading, one of the first things you need to have is an accurate understanding of what trading...


Dollar Gains, German Data Disappoints

The dollar edged higher in early European trade Tuesday, reversing earlier losses as traders sided with the safe haven as the recovery in German industrial...

Europe Seen Lower as China Outbreak

European stock markets are set to open sharply lower Monday, as a jump in reported Covid-19 cases in Asia over the weekend prompted fears...

The U.S dollar ended the week higher

The U.S dollar ended the week higher against other major currencies after optimism in the U.S economy and unpleasant data released in other countries...

Top 10 Forex Brokers 2020

200+ Forex Brokers
TOP 10 Best Forex Trading Platforms
Best Forex Platforms 2020

A variety of web terminals and specialized software makes a choice of a trading platform a difficult one for a novice trader. What should be this vital decision based on? To begin with, it is necessary to highlight the main criteria that high-quality software must meet for making money on financial markets...

Top 10 Forex Platforms 2020

All Forex Platforms