Stay Out of Your Head

Trading is a performance-based endeavor. Being a trader is akin to being a professional athlete and when you step into a market like the Nasdaq know that you are competing against people who commit their entire lives to the craft.

Imagine you’re in your mid 20’s, mildly athletic, and you move to Huntington Beach, California. You’re from a flyover state, landlocked by an unfortunate birthright. Yet you want to surf. You know you can surf because you’re athletic. Will you go to the pier where the risk is higher and locals are fighting for every wave?

You might want to start someplace down the road a bit, with less hazards and less competition.

Next, if you have ever seen a professional surfer or even a hardened local they make it look easy. They have muscle memory that guides them into the right position to grab the wave and they execute a few simple motions to initiate their ride.

Likewise they have a few simple cues that tell them when to hop off.

Trading is quite similar. If you are experiencing a problem, perhaps fighting the market, it is likely YOU who is getting in the way. An error occurs and the cascade of blame and judgment rushes into your head. Five-six voices, wicked mother fuckers, telling you everything that you do will fail.

Now the market is out for you, it knows where your stops are, and you you you etc. You are now part of the analysis. Instead-let market internals tell the story, focus on the story,

Finally, you can read a chart. Congratulations, we all can. You can be the best chart reader on the internet and still not make money. You need to know when you should be trading. The story tells us what the market is trying to do but your actions need to be triggered by something else.

Look for abnormal spikes in price, aka big rotations. These are your tell that the higher timeframe is becoming active. You want to trade with the higher timeframe as often as possible, especially when it conforms to your story. Now you need to put some risk behind it. You should be able to survive 100 trades with the amount of risk you give each trade. This gives you a chance to learn before you wipe out your account.

Focus on the story, trade pullbacks once abnormal price movement confirms the story, wrap risk around it, review your trades, rinse repeat.

It can be so simple, but not easy. Just like meditating.

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