A Simple Way To Boost Good Trading Discipline

The quality of your decisions and the level of your discipline determine how long you live healthily, how happy you are in your marriage and how successful you are in your trading.

Many traders attempt to be disciplined by sheer willpower. But most brains are not set up for the level of willpower that is required to consistently resist the temptation of giving in to the strong pull of emotions in trading.

Whilst most traders still try to force willpower upon themselves they discount that a major contributing factor is a lack of nutrient rich meals, lack of water and too much coffee and due to the stresses of today’s world most traders I speak with battle with a lack of good quality sleep.

So, why is it is important to keep the blood sugar levels healthy with high quality nutrition and water?

Well, when your blood sugar is low the blood flow to your brain goes low and that affects judgement.

Want some proof? Just think back, have you ever said something that you wish you wouldn’t have said when you were hungry? What are little children like when they are tired and / or hungry? What do you think if the blood flow to your brain is low, are your trading decisions better or worse?

A nutritionally out of balance brain makes for bad decisions and could not only have to do with the 50% divorce rate but also for the widespread lack of trading discipline. Find out how your body functions best. There are many different schools of thought out there and since I am not a scientist I have no clue which one is the right one. But what I have figured out over the years is what my brain needs in order to perform like an elite athlete.

Larry Pesavento 2012 Forecast

With Dominic’s kind permission following is an interesting forecast from Larry Pesavento on how the financial markets could unfold in 2012:

Larry Pesavento DowJones Forecast 2012


He applied the Bradley Model to the Dow Jones Index, the NYSE Index, 30 year T Bonds, the US Dollar Index and the Gold Bud Index. You can listen to Larry’s really interesting interview with Dominic Frisby on ‘Frisby’s Bulls and Bears


The 2008 Hindenburg Omen

I can’t remember where I found this article, but I remember I was very excited and consequently well prepared for the 2008 bear market:

The Hindenburg Omen Has Arrived

Submitted by Tyler Durden on 08/12/2010 21:35 -0500

* Dick Fuld

* Market Crash

* McClellan Oscillator

* New York Stock Exchange

* Technical Analysis

 Easily the most feared technical pattern in all of chartism (for the bullishly inclined) is the dreaded Hindenburg Omen. Those who know what it is, tend to have an atavistic reaction to its mere mention. Those who do not, can catch up on its implications courtesy of Wikipedia, but in a nutshell: “The Hindenburg Omen is a technical analysis that attempts to predict a forthcoming stock market crash. It is named after the Hindenburg disaster of May 6th 1937, during which the German zeppelin was destroyed in a sudden conflagration.” Granted, the Hindenburg Omen is not a guarantee of a crash, and the five criteria that must be met for a Hindenburg trigger typically need to reoccur within 36 days for reconfirmation. Yet the statistics are startling: “Looking back at historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty-days.” The last Hindenburg Omen occurred during the lows of 2009. Today, we just had another (unconfirmed) Hindenburg Omen. It is time to batten down the hatches – something big is coming.

As a reminder, the 5 criteria of the Omen are as follows:

1. That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

2. That the smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.

3. That the NYSE 10 Week moving average is rising.

4. That the McClellan Oscillator is negative on that same day.

5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.

 Today, all five conditions were satisfied. June 2008 was another such reconfirmed event, and as Barron’s pointed out then, “there’s a 25% probability of a full-blown stock-market crash in the next 120 days. Caveat emptor.” Boy was the emptor caveating within 120 days (especially if said emptor was named Dick Fuld). Which brings us to the present: should the Omen be reconfirmed within 36 days, all bets are off.


How To Be A Trading GURU

1. Explain how making 20 ES points a day is really easy, using past charts and showing where you would have bought and sold.

2. Tell everyone that everyone else likely blew up trading because they are dumb, and not following your method

3. Explain how trading is hard, yet easy, and will let you live the life you wanted.

4. Tell them you spent 10,000 hours looking at charts, and that must be worth something.

5. Tell them you don’t like systems, yet your simple way of trading is like a system and can be used to trade anything on any time frame.

6. Give them guarantees on your performance, but make it very hard to really understand so you win no matter what.

7. Tell them you have traded everything and have tons of money, but really only teach because you like people.

8. Make them think your special cost will run out very soon and you will never offer this crap every again.

9. Tell them you will teach them stuff nobody has every taught them, and it will be 10 hours of some of the best stuff they ever seen — totally new!!

10. Most important: NEVER, NEVER, NEVER show them an audited Profit and Loss statement for the last year or more. Tell them how un-important making money really is, since they won’t have the exact losses, errr..i mean wins… as you. Make it seem like you don’t really need the money, but keep begging… err..asking.. for their money. Then use their money to open up a trading account.

by Anonymous

Feelings are…

… much like waves, we can’t stop them from coming but we can choose which one to surf.