FOCUS

Discipline involves not only discipline but also very, very important is FOCUS. You have to be focused on the market during the day to be successful. Then you need market knowledge.

Many of us have endless disruptions during the day. For example, if you are trading from home and your wife or husband is home during the day or if you have little kids around, you have to figure out a way to have time to yourself, so that when you are looking at the market you are totally focused on the market.

If you have ever had a 2 year old sitting in your lap trying to punch the keyboard, it is awfully hard to trade.

Under disruptions there are a few other things that I have seen every week that are disturbing to me when I see new traders doing them. One is the need to have the latest and greatest gadget. Some of you who are new feel you absolutely have to have a front end to trade with. It is a wonderful tool for experienced traders to get in and out of the market quickly. For new traders it is totally unnecessary. It is a piece of software that gets between you and order execution and it is a piece of software in which something goes wrong quite often. Often in the chat room, I see the comment,
“Geeze, I lost a hundred dollars because my front end didn’t do what I thought it was going to do.” or “It didn’t fill my order”. I really do feel that a front end is a distraction for new traders.

Another thing that I think is a distraction is traders who don’t have a complete chart service; for instance people with Sierra Charts and the IB data feed. I recognize that it is inexpensive, but the disruption during the day reflected in “Please send me some data-I have some blanks.” or “I’ve have a continuous chart and I can’t trade for the first 45 minutes because I don’t have data.” I think it is a real mistake for new traders. For ten dollars you can have a service that fills in the missing prices for you – for $10.00 a month. Or you can use something like MyTrack. I really think that the trader needs to have charts up and fully complete and does not need the distraction from trading by having incomplete data. This is also something I feel very strongly about.

One of the other things I wanted to talk about is UNDERSTANDING YOUR MARKET

The first point I want to make is HAVE A STRATEGY. When you come in the morning and start the day, my plan, for instance, is to take zero line rejects and
and trades from extreme only. That is all I am going to do today. I am not going to trade the whole gamut. I think for new traders that you don’t want to learn more than one or two of the trades at a time.

So, come in the morning with a strategy and tell yourself what you are going to do. Write it down on a piece of paper. That day that strategy is ALL THAT YOU DO.
That includes totally not looking at any other set-ups, determining what your initial stop will be on your position and also when you are going to take profits. For me, that means when you get a clear signal on the CCI to get out of a trade – You get out!