Trader Mindset

Subscribe to the show Focusing on your process can keep you placated. It can also help prevent you from getting too emotionally invested in an outcome that you don't have any control over. This is good advice and something that can help in life also. We talked about having an expectation about a trade that you've been stalking for several weeks. One where you saw the set up a mile away, yet it reversed in your face. I've learned the hard way that such expectations have built in disappointments. When you focus on the process you go to bed at night having done your best - and that's all you can do. You're powerless over where the markets go. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show What parts of your process can you delegate and even improve your results? You can learn to trade and make money without being there. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show You can spend weeks stalking a chart and have the set up work perfectly, only to have the name reverse, sometimes in the same day. You put all this work in and the name doesn't have the common courtesy to go up... How do you feel about that? For some of you, it can lead to disappointment or anger. If that's the case, you can sometimes become derailed and trade on those emotions - whether you have systematized rules or not. It's important to remember that we are guests at the market's party and we're lucky enough to be invited in the first place. False breakouts and reversals don't care when you get long. Sometimes the market is not amenable to your trading style. It has nothing to do with you or your ability so you might consider not taking it personally. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show It happens from time to time that you make a huge win. You should celebrate it and understand that they don't happen all the time. Many traders will intuit that they are "on to something" and without any thought, start to trade larger. They also start trading names or asset classes outside of their core ability. Plan to grow methodically and not get to invested in the hubris that we can feel after large wins. Someone a lot smarter than me said "pride is a big banana peel." If you stick to trading a fixed percentage of your assets, you'll be fine. You can condition yourself to feel the same about all your trades - you're just following your system. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show What does trading mean for you in your life? What do you want your money to do for you? When you know the answer to some of these type of questions, figuring out the best asset class and trading style will be easier. Know and master yourself first, then figuring out the trading part is much easier. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Attitude is the one thing that I can't teach you. I can help you change your paradigm and that in turn can help you have a good attitude. However, you're going to want to do the work. Sometimes attitude can carry you when nothing else is working. According to General James Mattis, to the "USMC, attitude is a weapon system." Think about that for a minute... How do you think you can use this information as you manage risk? Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show If you know someone who trades across asset classes and trading styles, they are likely gambling. A person becomes the casino when they stick to one asset class and one style of trading, and get that down cold. Making predictions, fading the Fed, and fighting the tape are all examples of gambling. Tell them to keep their opinions to themselves and focus on getting good at one thing, and grow from there. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Many traders learning the craft are governed by the need for success for public purposes. Some like to peacock. Some are just flat-out greedy. You'll make a more progress sooner if you're clear about what your motivations are. In the end, consistent behavior predicts where you end up in life, not throwing around size trying for hero trades. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show A trader can gun for 100% RoR, but at what cost? You need to conjugate what you're doing with risk (and time). Your open trade equity shows allocators the risk that you're taking for the returns your endeavoring. Most allocators are looking at daily vol and risk-adjusted returns. If your ethos is to chase hero-sized returns, you have to know that those are often a result of good timing. And if you continually trade too big, it will catch up with you - it's just a matter of time. Slow and steady wins the race. Know what you're trading for. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Commodities are cyclical whereas equities are secular. You can take advantage of that cyclicality by trading seasonally or by trading commodity spreads. When you combine that with good risk management and maybe some trend following tactics, guess what happens? Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Alan "Ace" Greenberg had a great rule that he mandated on the Bear Stearns trading floor: "If the name is down coming into Friday's close, it trades." He didn't wait for stops to be hit. If the prop trader was long and there was an unrealized loss, they sold it before the close on Friday. This simple, but brilliant rule is one that you might want to employ. By selling your losers and going flat, you have a clear head that night and the rest of the weekend. Life is good. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Things don't always go as planned. Give yourself some room to expected the unexpected. This is the best way to hedge against your blind spots for which you have many. Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Your sole purpose in life is to play superior defense. Where do you think you can express that ethos the best? Click here to get your free copy of The Inner Voice of Trading audiobook.

Subscribe to the show Nothing happens randomly. You decide that you want to trade voluntarily. Whatever happens after that is your responsibility regardless of the outcome. The best traders I have known over the years are the ones who live in a paradigm of personal responsibility. Let go of judgment of yourself and others and focus on risk management. That's what traders are at the end of the day - risk managers. If you don't manage risk, the risk manages you - and it's your fault. Click here to get your free copy of The Inner Voice of Trading audiobook.

I think it's important to trade small at the beginning of your career so that you can find out what your edge is. Once you have it, then you scale and trade larger. You should think of it like panning for gold (to find your edge). The goal isn't for large trading gains right away, but to discover and shine the light on your edge.

It's more than rate of return...

Marshall Ulrich is an American legend. As a mountaineer, he's climbed the Seven Summits - completing each on his first attempt. The Seven Summits consist of Mount Everest, Aconcagua, Denali, Kilimajaro, Mount Elbrus, Mount Vinson, Puncak Jaya, and Mount Kosciuszko by order of elevation. Marshall has completed 130 ultra marathons, each over 100 miles in distance. Most notably, he's known for completing the formidable Badwater 135 ultra marathon across Death Valley 18 times - winning the event 4 times - including 3 in a row. Temperatures can reach 130 degrees F during this race in July.

Steven M. Sears is a contributor to Barronsonline.com and the former editor of the Striking Price column of Barron's magazine. He is the author of The Indomitable Investor: Why a Few succeed in the Stock Market When Everyone Else Fails published by Wiley.

Philip Shaw is a farmer in Western Ontario. In this episode, you'll here someone on the physical side of the commodity business discuss how he thinks about what commodities to grow, how he manages risk, and his thoughts from several decades in the commodity business.

Thanks to everyone who wrote in about September 11. Here are some of my memories from growing up in Manhattan and spending a great deal of time near WTC 1 & 2.

Don't build it so they will come. There is no connection to spending money you don't have in order to cast a bigger shadow when you have zero potential clients. Start small. Nothing wrong with it. Grow as your defined needs grow.

If the instrument you're looking at has a daily volatility measurement that is greater in dollars than you are willing to risk, you must pass on the trade.

Money you don't spend when you're starting out is money that you don't need to earn. And that's important when you don't fully understand what you're doing.

The trading world has changed since I began, but the tenets of good trading are still in tact. Here's how I would counsel myself at the beginning of my career based upon what I know now and the experiences I've had - both good and bad.

Focus on one style of trading. Build a system for client communications also. Else, your business is going to run you.

Cannabis Green Book partners with Equifax and Matt and Michael revisit the High Times IPO.

Michael Martin and Peter Borish discuss the current environment and when it looked like this before. We also speak about what inspired him to develop his analog model that anticipated the market crash in 1987. Peter is on the faculty at MartinKronicle and also joins the "live" Mastermind to answer our students questions.

Hari Krishnan returns to the show to discuss how the VIX can play a role in portfolio diversification, not unlike Managed Futures. [Sorry about some of the audio. Hari's schedule is very tight and he was overseas at the time of our recording. No matter how many times we hung up and retried getting a better connection, nothing worked.]

Shareholders of GWPH need two approvals in order for their investment to pay off, one of which they have - the FDA approval. Trickier to understand is the DEA approval which needs to happen by the end of September or 3 months after the FDA approval.

Check out their videos at YouTube also.

If you're wrong 60% of the time in good markets, why lose on your optimal bet size right away? Cut that in half for your first entry and then add the second half to your winning trade...

You don't have more control over an instrument by downtiming to 10 minute bars? Trader smaller if you're afraid to lose and trade off of weekly charts, then daily.

Jeff Dorman is a Portfolio Manager and Head Trader at Arca Funds in Los Angeles.

Tape readers have had to evolve their process with the proliferation of HFT. This is just one example of what you'll face over the course of your career.

Matt Dula is an expert in the marijuana investment space. You can find out more about what he's doing at Cannabis Green Book.

Trim the hedges or not?