Become Your Own Trading Coach

Saturday, December 26, 2009

Indicator and Trading Pattern Posts - Volume One

Here is an archive of posts from August that illustrate specific market indicators and trading patterns. I'll be generating archives from subsequent months, picking out posts specifically relevant to trading methods:

* Intraday sentiment and trend with cumulative NYSE TICK line;

* Tracking sentiment with a moving average of NYSE TICK;

* Tracking sentiment by assessing extreme NYSE TICK readings;

* Understanding the market's macro themes;

* Assessing market strength with short-term new highs/lows;

* Using trend status of a basket of stocks to assess market condition;

* Aligning trading with sentiment trends and NYSE TICK;

* Volatility patterns, intraday;

* Tracking sector rotation and odds of market continuation;

* Identifying market breakouts;

* A few of my trading rules;

* Creating price targets for swing trading;
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Saturday, December 19, 2009

Creating Your Learning Culture

If I had to identify one characteristic that separated successful traders from their less successful counterparts, I would say that the successful ones maintained what I call a learning culture.

A learning culture is one in which there is an explicit philosophy and set of procedures to reflect upon recent experience, extract lessons from that experience, and use those lessons to guide future experience.

While such a culture can be maintained individually, it becomes exponentially more powerful when it is shared. Imagine a small group of people, each of whom is extracting lessons from experience and sharing them with all the others. The net effect is to condense time: a person has gained a week's worth of experience in a day, simply by assimilating the lessons of others.

This condensation of time is essential to a field such as trading, in which the learning curve may outlast one's bank account. Most of us have heard of the "ten year rule", which states that expertise in any performance field requires a minimum of ten years of learning and deliberate practice. Clearly, most of us cannot afford ten years of our lives to learn to master financial markets; few trading firms could or would support such an extended process.

Within a learning culture, however, a trader can gain ten years of experience in a fraction of that time. The key is learning from others and making use of proper tools for exploiting that learning.

Imagine, for example, that I am trading with a group of four other people. At the end of every trading session, each of us shares, via video and with annotation, his or her best trade of the day. Those videos and explanations are reviewed intensively, providing high-yield access to multiple trading patterns. Over time, those patterns are reinforced--and each of the traders is seeing many times the patterns of the average trader.

Sadly, few trading firms make concerted efforts to embody such learning cultures. Whatever mutual learning occurs is the result of informal conversations and occasional collaborations. Because the traders don't hang together, too many hang separately.

Just one learning colleague can double one's rate of growth; conducting learning in groups can turn a 10-year rule into a several year one. It is no accident that the same training facilities--whether in boxing, chess, college sports, or the arts--produce leading performers year after year. Nor is it an accident that the world's leading laboratories produce consistent world-class discoveries; that the world's leading educational institutions generate the best scholarship.

Culture counts. When you're surrounded by high performers, it brings out the best in you.

More:

The Will to Prepare to Win

Previewing and Reviewing Trading

What Makes an Expert?

Sunday, August 2, 2009

Perspectives on Teamwork and Trading

A big part of success in any performance field is networking and teaming with the right people. Here are some posts to help you build your own team:

* Fighting the Isolation of Trading

* Developing Virtual Trading Groups

* Teamwork, Creativity, and Trading Success

* Teamwork and Trading Performance

* Finding Teammates to Build Your Trading Development
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Saturday, August 1, 2009

Trading Lessons From July

A major objective of this site is to archive readings that can help traders with their psychology and their trading. The following posts from July address important elements of trading practice. See also trading lessons from May and June and these posts on trade setups: