Think Like A Trader Blog

Thursday, 17 December 2015

The Things I Experienced In 2015

In this post I’m going to go over some of the most frequent things I’ve heard throughout the year, the questions I get the most, and the stuff I didn’t expect to face when starting a YouTube channel/Blog to help people learn how to trade.

Spam – This is something I did not expect to have to deal with. It seemed to happen overnight. One day I was posting videos as normal, the next day I was receiving spam messages. I would say I get at least two or three, every single day! They are all basically the same, so if I do happen to miss one, you should be able to spot the because they are invariably very badly written, and they say things like ‘Wow, I never thought I would be profitable at trading but now I make 150% per day!’ So if you see them, ignore the links! And I’ll also point out the WORST offender, which is the ANDY LANK SYSTEM. This is well known as a con if you do a little research, so avoid it like the plague.

Expert Beginners – I actually quite enjoy this, it gives me a chuckle every couple of weeks when an expert beginner comes along. It’s usually someone asking for some sort of advice, which I always give (I reply to all messages). However the ‘expert beginner’ will then override what I’ve said and tell me how what I’ve told them is incorrect and how I can improve it. This advice is almost always rehashed information from somewhere like Investopedia or ‘textbook’ answers. I always try and explain why I'm telling them what I'm telling them, but their passive-aggressive replies tell me it's falling on deaf ears!

Get Rich Quick – This is very common. I would say I speak to a 'get rich quick' person at least once every few days. I will receive a message from someone saying something like – ''If I take your course can I be a profitable trader in two months?'' Or something like, ''I only need to make X amount per week, how quickly can I do that?''

As always, I answer honestly. I’m looking to help people achieve their trading goals, not blindly sell courses to people who have a get rich quick mentality. What I say is that trading has over a 90% failure rate amongst retail traders. If something is difficult enough to cut down so many people, then I’m sorry, you’re not going to master it in a couple of months and I don’t care what training course you take or what the trader behind the course tells you. It can be hard to hear, especially when you're excited about the 'unlimited money I can make!' mentality, but it is very important to hear the truth. 

Think a minimum two years to become competent and profitable, much longer to ‘master’ the market. Although this differs from person to person. There are traders out there who have been trading for ten years and are still at best breaking even.

Once I deliver this information, 80% of the time I never hear from them again. I realise this is because they didn’t get the answer they wanted and so are searching for a trader who will fuel their fire and claim that yes, they can do it, all you need to do is just put your credit card details into my training course! It’s a shame, but it’s something I’ve come to realise I sadly can’t change. People in that mind-set aren’t interested in the hard fact.

Excellent People – I am most surprised by this and also delighted! I have spoken to so many brilliant people over this year, and it all started by me producing some videos and giving out some information that was useful (I hope!) to aspiring traders. There are so many determined people out there, all of them striving to improve, looking out the most useful information as well as being willing to share their stories and struggles. So thank you for taking the time to watch the videos and message me.

I hope I have helped as many of you to improve as possible! I have enjoyed it throughout the year and I am looking forward to next year where hopefully some of you will be in the live room. I’ve no idea how that is going to turn out but the intention is for it to be a social hub for you all as well as a place to follow my trades.

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

Monday, 14 December 2015

Set Yourself Goals and Targets

Reading Time - 5 Minutes

Well, day one into my trading holiday over the Christmas period. I must admit, I took an early morning trade today, so the holiday isn’t going as planned. The market set up too nicely to ignore. That’s my excuse, anyway. I was waiting for an injection of capital due to the huge recent sell off and opening above a key level. It came at the 8am open. 

We’re coming into Christmas and New Year, which is a ripe time for people to make their resolutions and determine to achieve certain goals in 2016. There’s also a trend of ‘resolution bashing’, as I’m sure you’ve seen spread all over social media. The memes go something like – ‘It’s almost time for that New Year, new me bullsh++’. And yes, it’s true that lots of people set themselves goals as they enter into a new year, only to let them fall away within the first few weeks of January.

However I’m a big supporter of setting yourself goals and targets. I set myself new targets throughout the year as and when needed, but I also love New Year as a way to set the big ones. You know, the ones that seem so crazy that there’s a part of you that doesn’t really believe it possible. But I can assure you, if you put in the work, you’ll be amazed at what a year can deliver. That’s the key though – you need to put in the work in order to achieve the goals you set. Clearly if you give up in January you’ll be more than happy to believe the ‘New Year new me bullsh++’ club.

I’ll go over my last couple of years as a way to show you that things can go a lot better than you expected if you stick to your goals and put the work in:

So a quick bit of background for the 2014 goal. I love writing, mainly fiction in the horror genre. I’ve been writing for as long as I can remember, crafting stories on my laptop just for the fun of it. In 2014 I set myself two goals to do with writing. The first was to get a short story published with a literary magazine. The second was to finish the first draft of a novel.

Now, I didn’t actually believe I would get anything published. From research I already knew that every literary magazine and online publication receives hundreds of subscriptions per week, all from aspiring writers. But that was my target and so all I did was come up with a plan of writing/editing 2,000 words per day and then submitting the work I had.

Skip forward, through all the hard work, and in 2014 I had two short stories accepted. I have a printed magazine with one of my short stories in it! I also got published on a literary website with another of the stories. On top of that I somehow pushed out the first draft of a novel.

So, great year, right? And it started with a simple New Year resolution that was followed through with the work needed to achieve it.

Below is a link to the online issue of HelloHorror that printed one of my short stories (should you wish to read it). I can’t link to the other one as it was in printed form and the issue is no longer available. My story is ‘Meeting Dad’.

In 2015 I decided to start a YouTube channel in order to help people learn how to trade. I wanted to do this because of my experience whilst learning. I was overwhelmed with useless information when I first began to learn how to trade so I wanted to provide somewhere that people interested in trading could get useful, reliable information. I decided that I would make one video per week, and if I could get 200 subscribers in the year I would be delighted.

I should note at this point that I had no idea how to create a YouTube video, how to edit, how to record my computer screen… so I was starting at a severe disadvantage!

But I carried on with my plan and now we’re in December the YouTube page has almost 2,500 subscribers!

That’s some ‘New Year new me bullsh++’, right?

So what’s the point of this post? Well hopefully to encourage you! I know what it feels like when you want to do something new and achieve a goal that lurks in your head but you’re too timid and doubtful in your abilities to even voice the goal to any of your family or friends. But you can do it. You can achieve more than you think is possible in your current state.

I’m presuming your goal has something to do with trading – it makes more sense than you simply being on this blog to read my ramblings with no real interest in trading at all. So set yourself a goal and figure out what you’re going to do to achieve it. Do you want to get to a stage where you’re able to maintain an account? Do you want to be profitable overall in 2016? Do you want to design your own trading plan?

Whatever it is, just decide to do it. Say to yourself, ‘this is what I want from 2016 and I’m determined to do everything in my power to achieve it.’ And then here’s the crucial part… do it! Don’t give up on January the 21st, or February the 21st, or March 21st! Keep pushing all year and then look back as you prepare for 2017 and see just how far you’ve come.

I hope you all have a great trading week!

Thursday, 10 December 2015

Read This Book if You're Interested in Trading

Market Wizards is one of the books I would highly recommend you read if you’re interested in trading. Written by Jack D. Schwager, it is essentially a compilation of interviews he carried out with some of the best traders in the world. He asks them all very probing questions and you get an amazing insight into the minds of the best in the business.

I will almost never recommend a book that is based solely on the technical aspects of trading. If you want to learn the technical side of things, you can learn it online, by using demo accounts, and yes, almost every technically based trading book goes over the exact same aspects – support and resistance, candlestick patterns, risk-reward etc.

The reason I love this book so much is because it delves into what I consider the ‘real’ aspect of trading, and that is, psychology. Reading through the interviews of traders who have made hundreds of millions throughout their career, it is beneficial and encouraging to see that they too, are only human!

What are the clear messages I pulled from the book?

Well the first one is that almost every trader in the book blew at least one account. When they did this, more often than not they felt like utter failures. They grew frightened of the markets and thought about giving up… sound familiar? I’m sure it does!

Another overriding message that came through was that the reason for first going broke, and then learning from the mistakes and building a successful career was money management. Although understanding the markets and developing your skill is of course crucial, all of them said that money management was key. They went broke because they risked too much and the market chewed them up. This didn’t necessarily happen at first – some of them had made hundreds of thousands of dollars by the time their flaws showed. But in the end, poor money management, risking too much, was their downfall.

I know I bang on about this over and over, but there is a good reason for it. And reading the transcripts of interviews from the best traders in the world, they also force the point home. The number one rule is to protect your capital.

Short post today, but as I’m recommending a book to read, I don’t want to then outline the entire book for you.

You’ll also need to dive over to Amazon and find the book yourself. I’m not going to be one of those people who posts the amazon link that then results in me making a few pence for every purchase you make!

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

Monday, 7 December 2015

Why only 1% per day?

Hopefully you have read a few of my posts before, or watched a couple of the YouTube videos. If so, then you know that I look to make 1% per day. Once that happens, I am finished for the day. Quite often I will finish even if I make slightly less than this.

I get asked ALL the time why I don’t trade for longer. Things like:

‘Why do you only look for 1% per day?’

‘If you’re a good trader then why don’t you want to make more money each day?’

‘You say you often finish in the morning. Why not take another couple of trades and make even more money before finishing?’

Yes, I could trade for longer. I could spend all day in front of the charts and take all of the setups that align with my trading plan. I would undoubtedly make more money and the account would swell faster.

But WHY would I want to do that? I came from working jobs where I often had to work 10 hour shifts, and oftentimes even longer. I detested the reality of spending the majority of my life at work, earning money in order to live.

Now trading is slightly different. I absolutely LOVE trading. It is my passion as well as my job. But at the end of the day, it is still a job. I am sitting in front of a computer, looking at and analysing charts. It is work and work is not life.

So if I can make my 1% quickly, the computer gets shut down and I’m finished for the day. I don’t then need to do something exciting. I may just go out with my dog or I may head to a café with a good book. But my working day is over.

Below are the results from today. I was finished by 9am. The slight loss in one of the trades was a hedged position that I cancelled when the trade setup confirmed. I made £645. That is enough for the day. I don’t need to make more. I build my account steadily. Even after having an average week last week (£570 profit) I still follow my rules.

A lot of traders don’t do that. They spend every minute they can with the charts. They want huge profits and they want to be making millions in their first year. More work. More struggles. That’s how it’s done!

And then do they achieve it? No. More than likely they blow accounts. They have swinging wins and plummeting losses. It’s an emotional rollercoaster of stress and heartache.

Trading should NOT be like that, in my humble opinion. Let the officer workers stress and the gamblers lose their money. As a trader you should work smart, never hard.

When I did spend full days with the charts – often from the 8am UK open until the American markets closed at 9pm UK time – I would end up making mistakes. If I was down for the day I would want to find trades rather than let them come to me. It didn’t work for me.

So now I look for 1% and that is enough. It builds my account very nicely - as well as the best traders out there! But I do it in such a way that I spend as little time as possible in front of the charts. My ideal days are the ones where I’m finished by 8:10am. I am the lazy trader.

I hope you have a great trading week!

Thursday, 3 December 2015

Trade As Though You're Facing a Margin Call

Reading Time - 4 Minutes.

Quick note – Decisive Trading is now on Twitter! Add me on @decisivetrading

Another quick note – I still have no idea how to use Twitter!

Ok, so why should you trade as though you're facing a margin call? I only realised that I do this yesterday. I think like this before every trade, and it permeates my mind from the moment I turn on the charts, until I switch them off again at the end of my working day.

Now, I don’t know if any of you have suffered the dreaded ‘margin call’ from your broker. But if you’re a seasoned trader, then I know you will have experienced it at least once… Probably more than once.

So what happens? Well, you’re in a trade, your account has been decimated and you’re very close to blowing said account. All of a sudden everything you own begins to chime – you get an email, your broker app pings, and you may even get a text from your broker. The message is clear – ''You have fallen below our minimum margin requirements, please add funds immediately or we may cut back your positions''.

It’s not a nice feeling, mainly because they are telling you that your account is gone. Maybe you've just had a run of bad luck, but more than likely, all of your mistakes, your revenge trading, your bad entries and thoughtless exits have caught up with you. You either need to add money to the account, or you’re done with your trading career.

So yes, I've experienced it. No trader worth their salt has gone through their career without blowing an account and experiencing a margin call. It’s a horrible experience. Dreaded. One I want to avoid at ALL costs.

So why in the heck am I advising you to trade as though you’re about to be margin called?

Again, I only just realised that I actually do this. But let me explain why it works: I was thinking about this last night – I know, I know, my poor, long suffering girlfriend, how does she put up with me?

I do this for one reason. It makes me very cautious and selective. Because if I’m expecting to be margin called if I lose money again, then I want to do everything in my power to make sure the next trade is a winner, an absolutely perfect setup that smashes home some very nice profit.

I will check my signal and double-check it. I look at the overall trend and try and spot any higher timeframe obstacles to my trade. Is it a perfect candlestick that aligns with all of my rules? Am I trying to go long when the market has just made a bearish crash through three higher lows?

And believe me, it works. It’s not nice to be thinking about blowing your account all the time, but it is of huge benefit to you as a trader. Because one silly trade may not blow your account, but it brings you one step closer to doing exactly that.

So I trade as though my broker is watching over my shoulder, getting ready to cut me off. And because of that, my broker never gets the chance!

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