4/22/2025 - Is your primary interest trading, or is your primary interest making money in financial markets? What if you're wired as a slower, deeper thinker--not as a quick pattern-recognizer--and your path to success is waiting for longer and shorter-term horizons to line up for fewer trades that you can allow to breathe? Perhaps the greatest trading edge comes from exploiting short-term participants who can't take heat and exit trades that ultimately work out. Here is an idea that you don't often hear: The best path to a positive trading psychology is to align your trading with your information processing strengths. For many, many traders, staring at screens and pressing buttons is training for impulsivity and distraction. Success comes, not from trading what you see, but from what you understand.
4/21/2025 - Note the overnight action across macro markets: US Dollar down, gold up, stocks down. If we are going to be selective in our trading and limit the number of trades we place to only the most promising opportunities, it's not enough to rely on short-term "setups". To profit from the bigger trades, we need to assess the kind of market we're in and align with the bigger picture. Is the market trading thematically across international markets? Is the market trading rotationally, with money coming into certain sectors and out of others? Is the market trading with above or below average volume and volatility? Successful trading begins, not with prediction, but with understanding.
4/20/2025 - What if we set a rule for our trading that said we're only allowed one trade per morning and one per afternoon. That's it: two trades per day. How would that impact our trading results? How would that impact our trading experience, including our psychology?Clearly, if we could only place one trade per morning and one per afternoon, we would have to make those trades count. That means that we would have to be highly selective, trading only the opportunities that stand out. In turn, that pushes us to define very carefully what goes into a top opportunity worth trading. What instrument would give us greatest bang for our buck? What time frame/holding period would we pursue? How would we size our top opportunity?
What if focusing on the criteria of winning cements a winning mindset? What if controlling the frequency of our trading places us in greater control of our trading--and our trading psychology? What if we could use the time when we're not trading to better understand what is moving, how, and why?
Making more by trading less and by trading very selectively: that pushes us to clearly define our rules and create experiences of mastery. When we are highly selective, we control our market activity; it can't control us.
Additional Note: Limiting the number of trades per day as suggested above pushes one to be very explicit about what goes into an A+ trade. That makes trading much more intentional and far less reactive. An important question for traders is whether their approach to trading reinforces reactivity and impulsivity or whether their approach strengthens their ability to act purposefully. If we can only trade once per morning and once per afternoon, we have to become quite thoughtful about what we're doing and why. Great example of how a shift in our trading can change our trading psychology.
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