Emotions of Trading

Five Emotional Keys to Handle to Improve Your Trading

Trading is a mental game. It is you versus yourself. You decide every trade. Your emotions are there at every decision.
I recently listened to an audio by Tony Robbins called “The Five Keys to Wealth and Happiness”. In this audio, Tony goes thru five key emotions we face and must handle in order to reach higher levels of achievement. 
Here, I will give you the emotions we all have as traders and how to deal with them and how Futures Truth magazine can help you handle these emotional hurdles and achieve higher levels of trading success.
The first key is to have a positive attitude. How can we have a positive attitude when even the most successful traders lose on half or more of all their trades? 
Only trade with an edge. An advantage. A systematic approach can give you that edge. You will have winners and losers. But, if the system is robust and logical, it should show positive results over the long-term. Realizing this should help you achieve a  positive outlook.
Tony says a negative attitude prevents us from doing the work necessary to succeed. If you expect to fail, how much research of a trading system to use are you likely to do.
Simona Rich writes that the main cause of negative attitudes is a wrong beliefs about life or certain aspects of it. If you belief your trading should result in 90% winners but are trading a system which shows only 60% winners, you will develop a negative attitude.
Tony further states that having a NEGATIVE attitude destroys discipline.  Discipline is a key foundation to all trading success. So, a positive attitude is key.

"Steady Return"

Reading an article in Wall Street Journal.  It criticizes Gold as an investment because Gold does NOT provide a "STEADY" return.  REALLY?!?.  Name an investment that does!!!  The stock market only recently broke out of a 12 year congestion.  A 12 year, violent congestion.  How about dividend stocks.  Most stocks don't pay divis.  So, stocks are speculation. 
What about housing as an investment?  Houses are an expense.  Try missing a loan payment 3 months in a row.  See who really owns the house - the bank does.  If you are renting it out - does it pay the combined cost of Mortgage, Interest, Taxes and upkeep?
Gold has provided double digit returns for 10+ years in a row.  HOW MUCH MORE STEADY CAN YOU GET!

Short Google

Wow, a simple first 30 minute breakout would have gotten you short GOOG way up at 754.  now trading at 695.  Plus 59 dollars per share.

Gold Highs

New afternoon highs in gold on a $10 plus move in closing minutes.  Usually a bullish sign. 

Silver to $26?

“Never to get married to a position.” That is tough advice for a gold and silver bug who has had a profitable 10 year run. 
Silver’s first Head and Shoulders Top in the summer proved this point.  A price target of $36 was forecast by the September 12 breakdown.  This was hit, and then some.
Another, longer Head and Shoulders top broke the Neck line on December 12.  This forecast a price target of $26.  Right at the September low.  This is right around the 50 percent level of the high reached in late April, 2011
After the last leg down, price retraced to the 50 percent level.  This forecast a 50 percent likelihood of the old low being broken.
Bottom Line, it is too early to get long Silver here.

Silver went to $26.14 by the end of December.  I'll call that a WIN!

The “key” to this chart is that the previous action in the market was strongly up.  Three strong days up followed by a NR day.  Yesterday was a Narrow Range(NR) / Congestion bar.  Which way will the market go out of the NR day?

A huge gap up open tells us - UP!  This gap had IMMEDIATE follow thru.  Look to get long.  We don’t recommend trading for the first 30 to 60 minutes of the trading day.  At 10:00, price had a 30 minute breakout up.  Stafford Daytrade got long on the confirmation of this 30 minute breakout shortly thereafter at a price of 1179.80. A new high above the 30 minute breakout bar ensues.

After some positive follow through, price congest.  Expect a long congestion and potential deep reaction based on the big move thus far.  Traders needs to “digest” such a big move.  Sure enough, price goes sideways from 10:45 to 2:30.  Then the afternoon Counter-Trend move happens.  This carries exactly to the 68% retracement level of the move from the open of the day.  Stafford Daytrade’s stop loss was loose enough to NOT get hit.  After the afternoon Counter-Trend move, our unique trailing stop feature will “kick in” and hopefully protect profits.

The “big boys” come in and drive the market much higher in last half hour of the day.  How could they NOT?  If the “big boys” weren’t long coming into today, they have to make darn sure they are long going out of the day.  Stafford Daytrade exited it’s long trade at the close of 1190.90.  A profit of 11.10 on this trade.  OVER $2500 on one big SP or about $500 per e-mini. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.  ALL RESULTS ARE HYPOTHETICAL. 

Golfer Rory

Reading about Rory McIlroy's amazing US Open when reminded me of trading. Over 4 rounds of golf he shot 16 under par. That's 4 birdies per 18 holes with no boggies or above. Just 1 birdie per every 4 1/2 holes of golf. Very similar to trading. If you have 18 trades in a day, a week or a month and can come out even on 14 of those trades and win on just 4, you should do very well. Take our Stafford Daytrade system. It trades about 14 times per month. And over hypothetical testing, it "makes" it's month on just 2 or 3 trades.