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Insight from Experience

someone posted a link today ( that represents a collection of trading insights from a very veteran (40+ years) trader:

some of it may be familiar, but i've never been one to discount helpful information simply because i have seen it in more than one place


… on Trading Plan

Trading is very easy if you have a good plan and follow it.
Believe in it and in yourself

Understand your goal and your plan. Then
just do it. Trade your plan, not the market

Stop thinking so much. Set up YOUR RULES and DO IT

In order to be a winner you must
follow your plan that is geared to your goal
.... all else is a distraction

Any good plan will have its ups and downs
Don’t let yourself get distracted stay focused.

Set a goal.

Define your method and define your risk control.....

If you are not going to make trading an overwhelming passion,

You won’t get very far.

… on Risk Control

It all boils down to RISK CONTROL, DISIPLINE,

Anybody want to know Ed Seykota's trading secret ?
Risk control & discipline.... No secret.

You can not and will not catch every move.
Just do the planned ones.
If you try and do it all you will drive yourself nuts
and lose your efficiency big time.

The real magic is RISK CONTROL,

Once you have defined your goal and the plan to achieve it,
you should know EXACTLY what you are looking for each day.
No thinking, just reacting. Your only choice is play or pass

Define and test a setup...
now you MUST USE RISK CONTROL to allow it to work..
allocate x dollars to the risk control plan and let it play out.

Nothing is perfect , just control risk
When you start to understand that the risk control is the key,
and follow the risk control perfectly,
then, trading becomes a lot less stressful.

You will not worry about any one trade.
You must think in terms of a series of trades and
know that your risk plan will allow you to stay through the drawdowns.

If wrong your risk control plan protects you...and you get to play again next time and oh my ...if you were parlaying.

Look to the big picture try and make a bull case and try and make a bear case, meditate on it.....only four possible outcomes......a big win ....a small win.....a small loss....a big loss...but your risk control will keep the big loss to a small loss......think about this.... RISK CONTROL IS THE MAGIC... ANYBODY UNDERSTAND????

Sometimes the Market will say HAHA I fooled you other times it will take you along on a nice ride...and when the market fools you, you go "ha ha" I had my risk control in placed and I will get you next time.

… on Execution

It is time for all to make up some simple rules
and just work on execution.

You can perfect the rule later. Just practice by doing it consistently.
Don’t worry about all the nuances.

The more you try and tinker and adjust for the current day’s action
the higher the probability you will never get anywhere.

So, decide on some plan, do it, and keep records…
the fancy stuff and tinkering will come later...
set a simple plan and develop as close as you can to flawless execution.
If you don’t do that give up now.


… on attitude and trading psychology


As I have said a thousand times,
it is not you against the market, it is you against yourself.

If you dont stop the thinking,
the excuses, and the BS, you wont make it.

.... trading is a business and it is really very easy if you set a plan and follow it. However most people don’t have the personality for it.

Go look in the mirror and have an honest talk with yourself,

and decide to start now and drop all the excuses, or just decide to stop ...don’t keep fooling yourself if its for you do it already.

My attitude is very simple ,
I understand the game and know that I will win.
Total confidence. That does not mean every trade will win.


The methodology is the easy part ...its having the self-confidence and knowing and believing you are going to win is the key. My attitude is that I never ever lose any money, I may let the other traders hold it for awhile but then I get it back.

If you want success in trading, make perseverance your friend, experience your counselor, caution your older brother and confidence your guardian genius.

If you put on a short trade and the market trades down and you want to drop your stop to break even that is ok. However, if the market first rallies and you get scared and cover when the market comes back down to break even

that is just dumb in my opinion......
you never should trade if you are scared,
your risk control with stop is your protection,

then as it works manage as you like....I would rather be wrong and lose than be right and not make a profit.....amature or pro? your choice..


Get rid of the EGO and apply risk control.

Forget about yesterday, don’t worry about tomorrow, do it today.

I have learned that I have no idea where the market will go,
but I know how to go with it and
that is why I have absolute faith that I will win.

In order to be a winning trader you must....have nerves that never relax., an eye that never blinks, thoughts that never wander and a purpose that never wavers...these are the masters of victory...

The money I make or lose on the stupid trade is absolutely negligable, however the stress or loss of concentration could be very costly. except I wanted to be out my ego is involved , when I just follow rules no ego no stress just a complete plan that I have total confidence in. The worst thing if I happen to win that will reinforce bad trading habits...

so this is a lose lose situation.

… on trading TRUTH

Nothing works 100% and
if it did the frequency of occurance would be very low

Forget the exact entry understand the concept


You can’t and won’t catch every move.

You never know what to expect on any individual trade--over a series, yes

I never know what the market will do.....but there are guides there if you look...the guides are not setups just guides as the possibilities..

The trend is your friend, until the end.

"Make an old trend hard to end new one easy to start"

… on learning
Specialize in one way until it is second nature to you,
then and if you want ADD another way

Don’t try to do everything I do. I have been trading for over 40+ years.

Start simple and then build


When you get good at the setups you should be able to increase win % and risk reward but you will decrease the frequency of occurrence.

Until you are totally comfortable with one indicator, don’t even think about a using two it will confuse you and give you an excuse not to trade.

When you have practiced good trading actions & setups a while,
they become easy; when they are easy, we take pleasure in them.

When they please us, we do them frequently, and then by frequency of action, they become HABIT. YOU FIRST MAKE YOUR HABITS,

I think a review is called for strictly on a personal level.
are on track for your goal?
are you executing your trades according to your methodology?
are you using your risk control plan?
If you are net profitable for the past month, how efficient have you been?
If you are not profitable, what is the problem?

Talk to yourself. Pat yourself on the back, or identify and correct the problems.
Be honest with yourself.

Designing a plan to make millions that will work is easy.
Following it is the hard part.

… on the Method

A method goes far to prevent trading trouble. Be methodical if you want to succeed. Every great trader has the talent of organization... following good methods will teach you to win...


When you stop trading scared, and start waiting for the right wave to start a position and use some form of campaigning you will see a big difference. You must find the one key area to start a play. Then all the rest become just auxiliary trades....SEE THE BIG PICTURE.

Base trades just a handful a week easy to plan and prepare for, and use your risk control.

When you get a base trade you should be expecting a nice move, for the trade to work. Therefore no matter how well you campaign, no move no profit. On the other hand if there is a nice move most any campaigning will work. THINK ABOUT IT.

Use the 9 and 2 day avg as a guide to the direction. It will help you.

It will also make you miss the first good base trade
but will let you avoid a lot of the tricky ones.

You will make the most money with the highest frequency of occurrence,
but it will have a lower win percentage. Understand this.

If price is above the 9 and 2, and the 2 is above the 9 the up trend is much more predominant.

You don’t have to find the best signals, and you won’t. Just find signals with a positive expectation, and do them, and do them, and do them ... with risk control. And if you coordinate with a higher time frame window you will be trading like a pro. Many types of windows are available. Identify and choose the ones you like. If you wait for a higher time frame window to show itself, and use a lower time frame for entry and stop, and the higher time frame for targets and campaign, your win % wont be great but your risk reward will be outstanding.

Scalping as part of a campaign does not require a tight stop.. you can use the original stop or a break even stop on the position.

The only time entry should be critical is during a base trade.

But it is not because when played out to its full extent the risk reward is so good that a sloppy entry on the base does not change anything.

Don’t miss the forest for a tree

A power trade should be a possible base trade and lead into a campaign,
or is part of an existing one

I do only a little pure scalping anymore. Within a campaign trading against your position for a fast point or so, is scalping within a campaign and not running a scalping business.

Do what is comfortable for you. But understand all the math.
Win % - risk reward - frequency of occurrence –
and campaigning possibility.

Now, remember in a trend you can have a series of dot 2 and of course
the first one has the most potential.
Also, you can have a dot2 or a dot1 on the daily window of opportunity.
On the winners, you can campaign that will change your net results dramatically.

When you go with a campaign that works
you can do a lot of dumb trades that will mostly work.

You can always double your position
as long as you don’t increase your core risk, while in a play.

Unless a fast rally is a true bottom it just makes the market weaker . that is why power trades work so well SOMETIMES. If this is a true downtrend that will continue, this rally was just short covering, and that takes a lot of buyers out of the market, but always use risk control because you can not be correct all the time.

Just remember, a trend has 3 parts: a beginning, a middle, and an end. You can’t buy the bottom or sell the top. If you get a signal near the start and it’s wrong, you have a small loss. If correct, and you play it well, a nice profit.

If you get in late, your nerves take over & it is very hard to play it properly. In other words, find, test, believe in, and do the base trades. You won’t get a high win % but the risk reward will be very nice. Do the math.

When you get in at the start, you have the ability to trade with and against your position, and not only stay through the corrections but use them to your advantage.

As a rule, whenever you get a big surprise, fast ,unexpected move in your favor you should take it.


take care

Great posting - thanks omni!