Yum! The Seasoned Trader Feeds On The New Trader

[nhallett 10]

If you're a new trader, you've got to pay your dues. Seasoned

traders know this and that's why we love you so much. Look at

your charts, mimic the experts, and buy those expensive

trade-recommendation newsletters. Dream your dreams. But

PLEASE just keep trading, because as you trade, we'll be

on the other side, putting your cash into our pockets.

 

I'm not kidding.

 

So the thing is, you don't want to stay a “new trader” for long.

What is a “new trader”? A new trader, the way I refer to it here,

is either someone who has just begun trading and has yet to make

the mistakes of a beginner, OR someone who keep making the

beginner's mistakes over and over again and never learns.

 

Most traders that I've come across over my 22 years as a trader

and CTA(3 years as a “new trader” and 19 years as a “seasoned

trader”) never got out of the “new trader” category. It's hard

to transcend. To some, it's impossible and they wind up walking

away blaming the “volatility” or the “institutional traders” for

their failure.

 

OK, here's the key to taking the leap from newbee to successful

trader: Your mental discipline. The fact is, the beginner who's

done his/her homework before trading is (largely) using the same

indicators and techniques that the successful trader is using. The

difference is that the successful trader is in control. The “new

trader” is not. The beginner is controlled by emotions and fears

and has not learned… I mean REALLY learned… that trading

the market is a math game. It's an exercise in probability and

statistics and you must keep the odds on your side, even if,

from time to time, it hurts.

 

If you've back-tested your system properly… if you've followed

your guru's past recommendations carefully… and you're ready

to start trading…then you have one job and that is to follow your

system like the IceMan. If, over your chosen period of time, the

system is not working, then change the system. Never change

your commitment to following your system to the letter once

you've decided to trade it.

 

All this is MUCH easier said than done. Fears and emotions can

easily overtake you. We're humans, not machines. You must

TRAIN your mind to be disciplined. That's what seasoned traders

do. They train their minds because they know that habit patterns

are simply neuro-pathways that are etched into your brain and

when one identifies a poor trading habit (and you know who you

are) all that needs be done is to train your mind to create a new

neuro-pathway to replace the old one. It's science, man, just

science.

 

Good trading system and the mental strength to commit to and

execute the signals that system gives you is the way of the seasoned

trader. Most seasoned traders won't admit it. Why? Yum, yum!

 

 

 

My best,

 

Norman Hallett

[Forex Quant Chix 10]

i love this post so much specially like me as a new trader. gives me an idea how to build my own strategy when it comes to forex trade.i would'nt say that im an expert moreover im a new beginner in forex still dont know how to start.thats why i used this forums to read and understand about experience of traders who is very expert in this field..yes you are ryt mr. norman. to become a good trader you must have a mental discipline to be a good trader..

[nakachalet 10]

it is not fair at all that you beat me to it....

 

to say what you said.... in your exposition....

 

love it..... clear and concise and summative as well.

 

thx, enjoy reading it and reflecting

 

best to you and yours and your company

[hapa.trader 10]

Good post

 

I've been reading Trading in the Zone by Mark Douglas which explores the psychological/mental attitude and discipline that is a MUST to be a successful and consistent trader...so far it's a good read

 

Being new to trading, no matter what blog/post/thread/newsletter/trading system/publication I've read the running theme seems to be:

Discipline

Risk rules

Eliminate emotions

[Tradewinds 12]

The fact is, the beginner who's

done his/her homework before trading is (largely) using the same

indicators and techniques that the successful trader is using.

 

Maybe. I wouldn't doubt it. Although I'm guessing that there are plenty of traders using some kind of proprietary code to assist them in their trading.

[gosu 10]

This is the kind of article that results when the writer has 22 years experience in the markets but has merely repeated the first year 22 times.

 

Does he actually believe that new traders with their piker lot sizes make any difference in the market such that an expert is licking his chops at the prospect of taking their lunch money?

 

Where does he think the vast majority of an expert's profits comes from? Evidently he is unaware that the participants who matter in markets do not operate with the same motivation as expert traders.

 

The article contains other inanities too obvious to mention. Yet look at the inexperienced parrots squawk in and repeat the writer's references to "discipline" and blah blah blah. What they lose tomorrow in the markets is a rain drop in the pacific ocean.

 

At least the reply immediately above this one questions the writer's absurd statement that beginners are using the same techniques as experienced traders. Who but a beginner would actually believe this?

 

What is the prospect that the writer of the article will get a clue and not repeat his first year of trading for the 23rd time next year? Not good.

Edited August 11, 2011 by gosu

[MightyMouse 12]

If you're a new trader, you've got to pay your dues. Seasoned

traders know this and that's why we love you so much. Look at

your charts, mimic the experts, and buy those expensive

trade-recommendation newsletters. Dream your dreams. But

PLEASE just keep trading, because as you trade, we'll be

on the other side, putting your cash into our pockets.

 

I'm not kidding.

 

So the thing is, you don't want to stay a “new trader” for long.

What is a “new trader”? A new trader, the way I refer to it here,

is either someone who has just begun trading and has yet to make

the mistakes of a beginner, OR someone who keep making the

beginner's mistakes over and over again and never learns.

 

Most traders that I've come across over my 22 years as a trader

and CTA(3 years as a “new trader” and 19 years as a “seasoned

trader”) never got out of the “new trader” category. It's hard

to transcend. To some, it's impossible and they wind up walking

away blaming the “volatility” or the “institutional traders” for

their failure.

 

OK, here's the key to taking the leap from newbee to successful

trader: Your mental discipline. The fact is, the beginner who's

done his/her homework before trading is (largely) using the same

indicators and techniques that the successful trader is using. The

difference is that the successful trader is in control. The “new

trader” is not. The beginner is controlled by emotions and fears

and has not learned… I mean REALLY learned… that trading

the market is a math game. It's an exercise in probability and

statistics and you must keep the odds on your side, even if,

from time to time, it hurts.

 

If you've back-tested your system properly… if you've followed

your guru's past recommendations carefully… and you're ready

to start trading…then you have one job and that is to follow your

system like the IceMan. If, over your chosen period of time, the

system is not working, then change the system. Never change

your commitment to following your system to the letter once

you've decided to trade it.

 

All this is MUCH easier said than done. Fears and emotions can

easily overtake you. We're humans, not machines. You must

TRAIN your mind to be disciplined. That's what seasoned traders

do. They train their minds because they know that habit patterns

are simply neuro-pathways that are etched into your brain and

when one identifies a poor trading habit (and you know who you

are) all that needs be done is to train your mind to create a new

neuro-pathway to replace the old one. It's science, man, just

science.

 

Good trading system and the mental strength to commit to and

execute the signals that system gives you is the way of the seasoned

trader. Most seasoned traders won't admit it. Why? Yum, yum!

 

 

 

My best,

 

Norman Hallett

 

You categorize yourself as a seasoned trader. What is your annual return on capital from trading?

[jackb 10]

Norm, is that really you or are you having someone else (an assistant maybe) login under your name to post articles on your behalf?

[PiP.Squeak 10]

Here’s my take for what it’s worth.

I think the main point of the article is correct (Mental discipline is required to be successful). That's true for any professional in any profession. However, he’s missing the main point of what it takes to control your emotions. What he doesn’t say is mental discipline is easy if you have REAL confidence in your strategy, impossible if you don’t. The difference between a new trader and a seasoned professional is trust in a proven strategy that THEY have experienced first hand many, many times. They can execute their strategy with confidence because they know it intimately, they know when conditions require adjustment and how to adjust it accordingly. They own it emotionally, it doesn’t own them. :crap:

 

I believe confidence and emotions are directly related to experience, knowledge and proof, NOT THEORY, Proof. I’ve found emotions when trading ALWAYS fall into these three categories

1. Those that don't know and don't know they don't know. - They have no emotions because they have yet to feel the pain of failure or the satisfaction of success. This position will soon change to #2

2. Those that don't know and now know they don't know - They have fear because they now know the pain of failure and have little idea of how to achieve and ensure success. This can only change to #3 through education and positive, repetitive outcomes.

3. Those that know and know they know. - They know the way to success, have experienced it and are confident they can achieve it again because they know how they obtained it. This only comes through knowledge and solid proof gained by experience.

 

As my college professor used to say "Don't show up for the test if your homework's not done. Then you won't have to worry about passing!!" Knowing the answers = knowing the results of taking the test.

 

Knowledge, a realistic strategy based on through testing in REAL TIME, and proven success over time are they ONLY things that build real confidence!

 

When you’ve placed as many trades as Tiger Woods has swung a golf club you’ll be as confident in wining as a trader as Tiger is in wining a golf tournament. Most traders give up LONG before that!

 

As for the feeding part, I'd have to agree with Gosu "What they lose tomorrow in the markets is a rain drop in the pacific ocean"

[bitbybit 10]

Seems like discipline is a keyword for this discussion. As a newbie, discipline is one thing you need and the belief in your financial goals to keep you going. Especially when you have hit 10 losses in a row. To go back and study your methods, refine them is not easy without a discipline.

 

As for me, belief, confidence,etc are the catalysts that you need to keep your technical aptitude for trading intact.

 

May be guru's here can say as to how do they manage 10 losses in a row? Mentally i mean.

[flowzen 10]

I'm not a very good giver...