Think Like A Trader Blog

Monday, 30 November 2015

Into December We March

Reading Time - 3 Minutes

Tomorrow marks the beginning of December and the run up to the Christmas holidays. I can’t believe it’s December again; this year has gone past so quickly!

December is known as a ‘tricky’ period to trade by a large portion of traders. The FTSE 100 is also known for its ‘Santa Rally’, which is just a name given to the higher probability of the FTSE 100 having a positive month for December rather than a negative one.

It’s important to note that during December there will be days marked by very little trading activity. There will also be days when things seem to go haywire and the markets go into overdrive. If you’ve traded the majority of 2015, then hopefully you’re sitting nicely in the positive and your goal should be to keep it that way. As such, just be careful. If the market is rolling along at a snails pace, just close up shop for the day and be thankful for an impromptu day off. If it goes into overdrive and you’re not comfortable with it, again, just pour yourself a cup of tea (I’m showing my Britishness here!) and paper trade. Or better yet, go do something else entirely. Get away from the screen and enjoy the freedom that trading offers you. Can you imagine sitting in an office and turning to your boss and saying, ‘I don’t feel comfortable working today. I think I’m going to go home and sit with a good book and a cup of tea’? I think your boss would have something to say about that, none of it good! But in trading, that is exactly what you can and should do.
It really is very important to be able to walk away from the markets when you’re not comfortable. Your main aim should be to preserve capital and hopefully this blog has helped you to understand that over the past year. No capital = no trading career.

Anyway, I’ve come across so many great people this year, all of them aspiring traders who hopefully I have been able to help. The goal for next year is more of the same! I’ve had a couple of practice sessions on the Jedi Live Room now and everything is working as it should be in readiness for 2016.

I hope you have a great trading week!

Thursday, 26 November 2015

Day Off Today - Perfect Trade Missed!

Hello everyone,

I'm not trading today. My girlfriend is graduating from her masters (with distinction no less) so I'm currently waiting on her getting ready and listening to her stressing over just about everything there is to stress over.

Since I knew we would be leaving early and I wouldn't be able to trade properly, I made the decision not to trade at all. Sensible decision, since I knew that I would be more inclined to look for a trade rather than wait for a trade, due to time constraints. So anyway, as I was getting ready I opened up IG on my phone - Hello my name is James and I have a trading addiction - and wouldn't you know it, there was a perfect setup after the 8 am open. The candle shot down, rejected and formed a strong pin bar right on support. Hopefully everyone who took the trading course identified the zone and took the trade!

So I missed an easy trade with a  strong bullish run right after it. That's just the market's way of toying with me I guess. But at the end of the day I know it doesn't matter. There are trades every day, sometimes several of them. It's important not to get involved in the charts emotionally and become frustrated. I could quite easily have tried to rush an order through on my phone to 'catch the trend'. But I didn't, because that would have been silly. It would have been a trade based on the wrong foundations - mainly frustration at missing such a nice move.

This will happen to you a LOT during your trading career. I'm not talking about just missing trades when you have days off. But even during the trading day, you'll miss big moves, perhaps from areas you identified but just didn't think was strong enough to trade from. I do it all the time. Again, that old phrase I keep chirping out - it's part of trading.

The 95% see that move and get irritated and either try and jump on the move, or they are then so worked up that they enter into a random trade through frustration. This is never a good idea and it ends with the 95% doing what the 95% do best - feeding the market and handing their hard earned money to the 5% who are disciplined and detached.

Ok, my girlfriend is telling me it's time to get going. A Masters with distinction is quite an achievement and I'm clearly proud of her. Although I can't put too much weight behind it. She can't be THAT intelligent... She's dating me after all!

I hope you've all had a great trading week!

Wednesday, 25 November 2015

FTSE 100 Review Video + Subsequent Trade Opportunities + Results 24th November

Losing Trade Video... Almost!

I captured a losing trade video, 45 minutes worth of me talking you through the trade, my thinking as everything happened and the results... The only problem was that it recorded the audio from my computer, but not anything I said! So I was essentially talking to myself for 45 minutes.

I am having zero luck with the new PC software, I'm a mac book man. Just as well I'm testing it all before the live room and daily review videos.

No doubt I will capture another losing trade on video in the future. I just thought I would share my frustrations with you all.

Review video from the 24th November is coming later today.

I hope you've all had a great trading week so far!

Monday, 23 November 2015

Accept The Losses, Like I Did Today

Hello everyone. First of all, I hope you all had a great weekend and are all set for an even better trading week ahead!

Losses in trading are normal. I know I say this all the time. I'm like that old, gloomy teacher lamenting on life, focusing on the negative aspects and warning of everything that could possibly go wrong.

Well, not exactly. I focus a lot on the losses in trading because they are a huge hindrance to traders. It's not the losses that have the devastating affect, but rather the reaction to the losses.

I have losses! I know my results of late have shown so very few draw-downs, but they do happen. For example let's take today: The market was very negative on the daily time frame. It was negative in before hours trading also. I was looking for a sharp spike, like a finger prod, into the 6300 levels for a sell. I turned the computer on at 7:15am and wouldn't you know it, the spike happened at 7am. I missed it.

Fast forward to the open. One of my trades set up. It's a trade I call the Spring Bounce Trade. Now ideally I wanted to sell from that spike at 7am. However my Spring Bounce Trade announced a sell just after 8am from lower down. In my mind it was already too low and I wanted to get in higher. But my trade setup was there, and from experience I know not to 'predict' the market. I entered the trade, following my rules. The market dropped to within 5 points of my target and then reversed, ending up with me being stopped out for a full position loss.

I should also point out that the Spring Bounce Trade is the only trade I don't actively manage. Take profit and stop loss are set on entry and I don't adjust anything. Those are my rules and I stick to them.

So anyway, I take a full loss. Yikes! What a way to start a Monday morning! And then to top it off... My next trade was a loser as well. Two losses in a row... Thank you Monday morning!

I freaked out. I panicked. I quickly reversed the trade. But that didn't quite work so I closed it out and reversed again. My original trade was going to be the winner! I should have held, right? It's just difficult when I don't have an exact entry defined. It throws me off. So anyway, when that reached +5 points I was confident. I entered another position, wanting to make back losses. You won't beat me, Monday morning! And the market? It was doing my bidding now. Except it didn't. It reversed and I closed them both for a small loss! Now I was in real trouble. My initial losses were magnified into something huge. I needed some sort of win. I saw a candle that looked to be reversing so I entered again, triple position...

Ok, you get the idea. Hopefully if you've been following me long enough, you spotted that last paragraph was a lot of nonsense. But it is exactly what happens to a large portion of traders. They let losses snowball until its something so huge rolling down the hill that nothing can stop it. And that snowball is made of your capital.

I did take two losses this morning. One was the Spring Bounce Trade, full position. The second was one I managed and cut back for a smaller loss. It was frustrating and I was annoyed. However I didn't let it influence my trading. Because I know losses are part of the business. And what are two losses over the week?The month? The year? The rest of your trading career?

It can be most annoying if you frame it this way - ''Two losses. This is going to take me a full day to make back. I'll probably end today at breakeven at best and more likely I'll end it down. I wont be in profit until Wednesday!''

This is the wrong mindset and it is dangerous. You need to put losses behind you. It doesn't matter if you have a down day or week or even month. What matters is your overall performance and your discipline to follow your trading plan.

So I was ready for a losing day. I was ready to spend all of tomorrow and perhaps some of Wednesday getting back to breakeven. It's life and it's part of the trading game.

Anyway, the market ramped up higher. I had a position for a blind sell located right where the 9:10am candle closed. It's difficult to sell into a rally like that (I trade the FTSE 100 if you want to look at it on the chart). But I sold. The next candle produced a piercing pattern. I entered a second position as the market broke the low. A little voice in my head said ''If these trades lose you'll be even further down, you should buy and ride the trend.'' I ignored it, as all professionals do. The market duly dropped. And I'm now back in profit for the day.

Below is a picture of today's chart, showing the sell positions that brought me back into profit. There's also profit displayed at the top of the screen. Hopefully the picture should enlarge if you click on it.

Stick to your plan. Don't let losing trades control your emotional state.

And I hope you all have a great trading week!

Friday, 20 November 2015

Live Room Subscription in a Fair Way

Just a very quick update before the weekend. I’ve had quite a few people emailing me asking to reserve a place in the live trading room. I mentioned that the room will have a limited number of spaces. However I do not want to start cherry picking people at random to join so I have come up with a new way of doing things:

Everyone registered at the training site will receive an email with subscription details in January. I will then leave subscription open for one full week. If in that time subscription goes over the 25 – 30 member level, then so be it. At the end of the week, if this is the case, subscription to new members will be closed until the room once again falls below the 25 – 30 level.

I am not expecting subscription to reach 30 people in that week, but this is a safeguard for anyone worried they may not receive a place. I believe this is the fairest way to do things.

Now I’m signing off for the weekend. I hope you’ve all had a great trading week!

Live Trade 20th November + Trade Results

I do apologise for the corrupted audio during a small part of the trade. My laptop was overheating. Hence all live trading room trading will be done on the desktop!

Thursday, 19 November 2015

The Danger of Miniature Move Trading

Reading Time - 4 Minutes

This is a recipe for disaster. I know it is a bad idea from experience. Traders know that it doesn’t work. I tell traders who email me about problems that this is a huge red flag. And yet so many people still do it!

What am I talking about? Well, I call it 'Miniature Move Trading'. It can come about because of several different reasons and I can almost guarantee you that if you have been trading for any length of time, you will have been caught out by 'Miniature Move Trading'.

The best way to explain it is with an example: Let’s say we begin our trading day, and we are aiming for 20 points, which will equal a good return based on recent market volatility. You take a trade in the morning, and wouldn’t you know it, it was the perfect trade. You close it out at 17 points. You followed your plan, you had discipline, you kept your emotions in check when the market looked like it was going to move against you, and now you have your reward.

But wait, you were looking for 20 points today. How frustrating. You are SO close. Only another few points and you’re done with a perfect day. It’s only a few points so your regular plan and strict rules aren’t really necessary. You’ll just jump in, scalp a few points and that will be it!

Sound familiar? I’m sure it does!

And what happens on the vast majority of times when you go against your well thought out trading plan? You take losses. Maybe you lose 7 points. And now you’re frustrated because you had 17 points and you were so close. It was just a silly mistake, you should have seen the signs that your entry was wrong. So you take another quick trade, just to recoup losses.

Another loss.

Now you’re breakeven or slightly down.

You take another ‘quick’ trade.

Another loss.

You get the picture. And I know that if you are honest with yourself, you WILL have done this when trading.

This is a problem you need to address, because it is a sure fire way to big losses. I don’t know why, but people decide that because it’s just a small move they need, they will abandon all common sense. And believe me, I used to do it as well! I’m not pretending to be all high and mighty.

Your plan is there for a reason. Mainly – and I hope this is the case, or your problems run a lot deeper – because it is profitable and it aligns with your trading style. So why would you EVER, even for one trade, ignore it? You have your own rules, and you're breaking the rules, YOUR rules.

Every time it happens, note your losses. Look at the damage they do to your account. Wouldn’t it have been better to just walk away from the computer? Isn’t 17 points close enough to 20 points so that you can just call it a day?

This can also happen after small initial losses. Your inner voice will chirp in that you just need to take a quick scalping trade to make back the loss. You’ll just ‘reset’ your day and start again.

These thoughts are common. And you’re reading this and thinking ‘sure, I’ve done that.’ And guess what? Everyone else is thinking the same thing. So if it worked, they would all be successful traders. But it doesn’t, because it’s part of the mindset of the 95% who fail.

Address the problems in your trading. Treat each problem as unique and work on them individually. Figure out what you’re doing and show yourself the results of your actions by looking at your profit and loss. Don’t be part of the herd that gets rounded up and slaughtered on a daily basis. All it takes is conscious effort and determination.

I hope you’ve all had a great trading week!

Monday, 16 November 2015

Further Info and Pricing for the Live Trading Room

Do What Makes You Happy

Hello everyone, I hope you're all well. We had some tragic news over the weekend and it seems like every other week terrorist attacks are trying to tear the world apart. It shows how fragile life truly is.

I always like to try and take a positive from a negative and use it as a means of learning something new. I'm sure you have all seen the unity that has spread through France and the world since the attack, and I cant think of a better response to be honest.

For me it helps me realise that life is finite and playing the game of 'waiting' is just not worth it. What do I mean by that? Well, lots of people put things off. I'm sure you have friends or family members who are like this. Perhaps you are even one of the 'I'll do it... One day' crew. You owe it to yourself to take risks and to follow the path that will lead you toward your goals - whatever they may be.

I can still remember the very beginning of my trading journey, right around the time I realised that I had a real passion for it. I was fighting an internal battle as to whether it was worth the risk focusing all of my effort on trading, or whether I should play it safe and 'stick to the day job.' It was a very tough decision.

But I did it. I took the steps, refusing to wait until later, which more often that not is simply a crutch people use when what they really mean is that they wont EVER do it.

'One day I'll travel the world.'

'One day I'll write a novel.'

'One day I'll start my own business.'

For me it was difficult. I almost failed and I was in a dark place where I truly didn't know how I was going to move forward. I had to rely on the kindness of family for a loan when I literally had nothing left and the mortgage needed paying. It seemed crazy at those times to be trying to become a trader, an industry where 90 - 95% of retail traders fail. But I kept going and I kept working, because I loved it and it was what I wanted to do. I took the risk and I determined that I would succeed or I would be dragged away from my computer kicking and screaming and plopped down into some nondescript office and told to get back to the 9-5.

This is a trading blog, not some positive thinking nonsense page I hear you say! True, but I think it's important to reflect sometimes. Life is short and your time is all that you have to work with. And hey, it's my blog anyway!

Ok, here's today's trade, so I can at least pretend this was all about trading. It was based off of market dynamics as well as an expectation of price to close the gap which formed over the weekend due to the events in France. I've also been working hard perfecting setups for the trading room in February. Busy week last week, and even busier weekend. But worth it, because I love it!

Trade entered just before 8am. Trade completed before 8:05am. Gain £505 and done for the day.

I hope you all have a great trading week!

Friday, 13 November 2015

It Has Been a Busy Week!

Hello everyone. Very busy week this week. I do apologise that there have been no posts, I just haven't had much spare time! I have new recording software + microphone for the PC in readiness for the live trading room, so posting should be back to normal next week.
I didn't capture today's live trade. However this morning a subscriber (Jack Turner) asked for key levels to watch. I suggested 6160 as a strong possible level. The signal came at 7:55am, trading finished by 8:10am. Attached is a screenshot of the trade. I hope you've all had a great trading week!

Thursday, 5 November 2015

Dealing With Self Doubt When Trading

Self-doubt, that little niggling voice that convinces you you’re being safe by ignoring trades, can have a very negative impact on your trading. We all experience it, so it is important to get on top of it.

‘The market just doesn’t look right. I’ll skip this entry.’’

‘’I don’t like the way that pin bar formed. There seemed like a lot of buying pressure just waiting to come out.’’

‘’The tealeaves are telling me to skip this trade. Phew, thanks tea leaves!’’

Ok, so the last example may not apply to everyone, but you get the idea. You convince yourself into skipping trades. You’re avoiding the uncertainty that comes with trading and you’re trying to limit the fear of not knowing what is going to happen. You may not realise that is what you are doing – you may genuinely believe that the tealeaves are giving a stark warning – but it is.

This type of uncertainty can come after a run of losses, or even after a run of winning trades. After the losses you may think you’re just being extra cautious. After the winners you may believe that the winning streak HAS to come to an end and so you’re trying to filter out the losing trades.

Losses are part of trading. You cannot avoid them. It is the uncertainty that causes so many problems, usually making people blame themselves for losing trades and feeling downhearted instead of accepting the inevitable fact of trading – you will lose trades!

Back test your plan to within an inch of its life. Really test it out on the data available on your charts. I know there’s this whole army of people who say back testing is useless because the market is constantly changing… Let those people believe that! You’re here to make money. To do that you need to become comfortable enough with your plan to accept the losses. If you haven’t back tested and you get two losses in a row, you’ll panic. Three losses in a row and you’ll begin to wonder if the methods still work. Four losses in a row and you’ll be looking for a new system! But if you back test, you will see that the losses come. You will be able to spot the average drawdown you have – maybe the worst in historical data was 5 losses in a row. But if the system is profitable and you’re comfortable with that drawdown then who cares?
Now I don’t mean start testing your system with data from 1950. But do enough testing to make yourself comfortable with it. Because skipping trades means inevitably you will skip winners as well as losers. And those winners are all part of your systems profitability. Skipping them means your success rate drops and thus your profitability.

On the 5 minute timeframe I back test one year. On the one hour timeframe it should be 3 – 5 years.

I hope you’ve all had a great trading week (no tealeaves involved!)

Monday, 2 November 2015

Information on the Jedi Trading Room - Coming 2016

I hope you all had a good weekend. I get asked quite frequently if I offer any sort of live trading room. I’ve decided to go ahead with this as of 2016 so I’ll lay out some of the details here for anyone who is interested. More details will be released as and when I figure out the platform I’ll be using and also costing etc.

In 2016 I will launch the Jedi Trading Room (thank you Jack Turner for the idea for a name). This room will be somewhere you can join in order to follow my trades, and where I can talk you through my thinking of each trade and give you the experience of a professional, profitable trader. I will be launching the room with two access levels.

The first level will be a cheaper version whereby all Jedi Subscribers will receive a video analysis each morning before the FTSE 100 opens. It will outline the zones I am looking at, my overall thoughts on the markets and when there is a trade I see setting up before the open (due to market dynamics) I will also explain how you can trade it, with ‘set and forget’ criteria. This will benefit people who perhaps just need a helping hand and the confirmation from a professional that what they are looking at and have marked on the charts is correct. It will also help people who work full time but would still like to make money from trading. It will involve less trades due to the nature of the trades available, but I will look to offer you two or three per week.

Level two will be full access. You will receive the aforementioned videos each morning, and will also have access to the trading room. In the trading room I will guide you through my trades, including exact entry, profit taking and exits should the trade turn against you. This is a very beneficial service for anyone serious about trading. You will share my experience and be able to copy my trades on the FTSE 100. Check out some of my recent YouTube videos if you want to see what you can expect results wise. The Level 2 Jedi subscription is for anyone who wants to make money, with the potential for full time income, without the stress and hardship of slogging it out with the markets by yourself, crushed by uncertainty.

Level 2 Jedi will trade exactly as I trade. This means that when my daily target is met, we are finished for the day. Quite often this happens before lunch (but not always). The rest of your day will then be free to do whatever you like. I will leave you with further trade ideas should you wish to continue trading. But for me, trading is an escape from the 9-5 slog and so the earlier we finish, the better! For example, today I was finished by 9am – not bad for a Monday!

Times for the training room will be:

Open – 7:45am GMT
Close – Times vary depending when our trades complete, however the FTSE 100 closes at 4:30pm GMT.

Pricing for both levels will be announced in early 2016, but I aim to keep it cheap enough that even with a relatively small account, you can more than make your money back and a good profit on the vast majority of months. My results speak louder than I can – they are some of the best in the trading business.

As mentioned to everyone who has already taken the training course, I will be offering you a discount on the subscription service and I’ll announce this in 2016 also.

If you would like to keep up to date with the live room (it saves people emailing me!) please register at my training site. You do not need to purchase the training course to enrol, however I will receive your email address and I can message you when the details are finalised for the room.

Training Room Site –

I hope you all have a great trading week!