Everyday you must master your craft (Ray Lewis talks to traders)

Apr 27th, 2011 | By smbcapital | Category: General Comments, Mike Bellafiore's (Bella's) Blogs

Ray Lewis was talking to some football players but could have been talking to a bunch of traders.  Take some time and watch this video.  You are gonna want to get up and tackle someone on your desk afterwards (I advise against this).

Some of my favorite parts that are so applicable to trading:

1. “How much time are you wasting?”

2. “Everyday of my life I am trying to find a different way to get better.”

3. “I am training for a lifestyle.”

4. “Every single day you have to master your craft.”

5. “Harsh reality 1% make it.”

6. “Greatness is a lot of small things done well.”

7. “All I have is my work ethic.”

8. “Don’t every let a day go by that you waste.”

Trying to figure out what I am missing

USAT was the only trade I took today.  I followed 5 stocks, looking for the right setup, and thought that I found it in USAT.  It broke out quickly in the morning, setting a high of $2.72, $0.03 below the 52 week high.  Watched the volume start coming in mid afternoon, and the stock start catching momentum.  My plan was to enter the trade once it broke above the 52 week high.  Entered the trade @ $2.76, and the stock quickly reversed.  I believed there was good support at $2.65, and set my stop @ @2.64.  Wicked out, and the stock reversed, closing just above my entry, near the HOD.

This is becoming a repeating scenario in my trading... Have to fix this...

 

traderstewie

You ever sit on a crappy trade, a losing a position, giving you anxiety, clouding your mind. You can't take new better trades cause you're emotionally attached to this damned trade. All of the sudden, you man up and sell it!! What happens?? LIBERATION feeling! Now,you can really on focus making money!!

HAVE NO EXPECTATIONS!

I have been trying to think about what went wrong today.  I chose my setups. I was patient with my entries. I paid attention to support/resistance levels.  I did not chase.  Yet, I ended up down 1.25% today.  I quit the day early and went to the gym to clear my mind. This is what I came up with.

•  Just because I choose the right setups, does not mean that they will go in my direction
• Position sizing, position sizing. My positions are too large for my present consistency level
• I am getting greedy, and not taking profits as soon as the market makes them available
• A break of the high of day is not a garantee

First trade was ROYL. Nice continuation gap, waited for the retracement and entered on break of HOD.  It quickly retraced, and I sold at the bottom.  I had a specific number in mind for my risk ($.20), which was just above the open price. Double position.  I was too gun shy to re-enter the trade on the nice flag that formed once it retraced, just before it B/O

STX was my second trade.  Found support @ $16.00, and entered triangle in anticipation of B/O.  Did not take any profit, and exited the trade at B/E when it was apparent that the volume was not supporting further upside

SHZ was a bounce play.  It was finding bounce support @ $6.20.  Entered @ $6.21 but there was no momentum/volume in the move that came.  Exited @ 6.18

AAU - entry @ 4.81 with $0.10 risk.  Did not take profit on the immediate spike, stopped out. GREEDY

BLTI is the only profitable trade today.  Broke the HOD, took some profit quickly and stopped out above entry.

Trades

First trade was HILL, a kicker with good premarket volume (25% of daily average volume).  I rushed the entry and did not wait for a higher high / retracement.  Entry was on first candle with an initial target of PM high of $3.56, and risk of $0.20.  Stopped out @ $3.0001.  Second entry was on break of initial HOD @ $3.28, with a $0.10 risk and same target.  Stopped out @ $3.18

Second trade was BLTI.  I waited for confirmation of a break of \HOD with an entry @ 5.2955.  Risk was LOD and initial target new 52 week high, but the trade kept running and sold 1/4 @ $5.49 and 1/4 @ $5.824.  Held 1/2 of position overnight. 

Traded HL based on the Silver and Gold momentum.  Entered on break of  HOD, but the trade did not have any follow through.  Risk was LOD with initial target of $10.

Traded AMSC.  This stock dropped more than 40% overnight and after breaking lows, broke out of a triangle.  Waited for a break of daily high of $13.50, but entered late @ $13.71.  Did not give the trade enough room to move (position size to large) and only focused on pre-market high of $15.74.  Stopped @ $13.61 and missed a very nice move to target.

Momentum trade CXZ, coming up to 200 and 20 day SMA.  Held entire position overnight - good close and huge volume.

Trading Psychology: The 16 Truths About Great Trading

Trading Psychology: The 16 Truths About Great Trading

By Dr. Doug Hirschhorn

1) 45-55% (Average winning % of any given trader) 

2) Traders do not mind losing money, they mind losing money doing stupid things

3) You can lose money on a Great trade

4) Focus on the Trade, Not the Money

5) Trading is a game of Probabilities, not Perfection

6) Trade to make money, not to be right

7) Nicht Spielen Zum Spass (if it doesn’t make sense, don’t do it)

8) The market does not know how much you are up or down, so don’t trade that way 

(Think: “If I had no trade on right now, what would I do”)

9) Learn to endure the pain of your gains

10) There is no ideal trader personality type

11) Fear and Fear drive the markets, not fear and greed

12) Keep it simple: Up-Down-Sideways

13) Make sure the size of your bet matches the level conviction you have in it

(No Edge, No Trade; Small Edge, Small Trade; Big Edge, Big Trade)

14) Making money is easy, keeping it is hard

15) H + W + P = E

a. (Hoping + Wishing + Praying = Exit the Trade!)

16) Trading is NOT like sports

a. Before an athlete takes a shot, he or she is NOT supposed to think, “What if I mess up this shot?” ; In trading that is called “risk management”

b. In sports, when you miss a shot, you don’t lose points

c. In sports, the opponent adjusts to what YOU do; In trading, the market does not know or care about YOU

d. In sports, you focus on improving weaknesses; In trading, your strengths are your weaknesses and vice-versa

e. In sports if you get poor results, you need to practice harder, put in more effort; In trading, effort is not positively correlated to improved performanc

Staying Positive

From Trader Stewie and the Art of Trading

YOU NEED TO BE CONSTANTLY WATCHING YOURSELF, your body language, your tone of voice, your attitude and you need to quickly adjust any behavior that's hurting you(over trading, anger, revenge trading, trading with huge size etc). You need to be your own therapist, mental coach and motivator. You need to be hungry to win everyday even if winning means not trading. You need to be ALWAYS seeking to improve yourself, learning, adjusting your attitude, minimizing your ego and maximizing your drive to be better than the day before. Don't worry about the money, when you are trading well the money will find you, trust me. Take most care of your account when you are losing because the winning trades are waiting just around the corner but they are waiting for you to adjust yourself first.