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The Futures Trading Academy Less is More in Life & Trading for a Living

BY M AT T DAV I O A K A @ M I S S T R A D E

The Futures Trading Academy Less is More in Life & Trading for

2014 Market Prole Trading Academy - @MissTrade www.marketproletradingacademy.com

CHAPTER 1

Why do you trade?


! This question has to be asked for anyone who wants to trade. Why do you trade? Have some quick ideas today on why you trade. These are questions that I want to just kind of throw out there open-ended in a Socratic method and give you some idea and some thought for each perspective person when they get into the game of trading. Why do you trade?
Why do you trade?

! Do you get into trading because you want make a lot of money? That seems to be a common theme and I hear people say all the time "Hey I want to get into trading because I would make a lot of money." ! Well, do you want to get into being a doctor or a lawyer or a commercial real estate person because you want to make a lot of money? I think to do any of these tasks or jobs in the world, you have to ... you really have to want to enjoy what you're doing. Just because some doctors and surgeons make a lot of money, may
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be appealing to some, but once they go through the rigor of training, the time involved, the sacrices they have to make not only for that training but for their family afterwards. Being a surgeon may not be the choice for some. ! This is a really big question I think you have to answer for yourself. ! Money is a by product of the business whether it's trading, whether it's being a doctor, lawyer, commercial real estate, etcetera. It's really the game that you have to enjoy. If you don't enjoy it the by product meaning the money won't follow. ! A secondary question is if you are in it for the money, do you need a regular pay check? Because trading like most businesses that offer great upside also comes with inevitable draw downs and down periods. When volatility changes in the market, it's always evolving, it is not a game that you can consistently say "Hey, I want to make X dollars," especially if you're starting with a smaller capitalize trading account. You have to be realistic in understanding the rule of the game, how the process works and really 20% of the time you may make 80% of your money much like most businesses. ! Keep this in mind that trading is really not a linear gain. I think you need to show up everyday linearly to participate but it's very difcult to make, say you want to make X amount of dollars everyday day in, day out, everyday day of the year. ! We've kind of covered this in the past and that you have to look at what times works for you, what type of trading works for you, what works with your family, your lifestyle, etcetera. That's question number 1, why do you trade? ! Number 2, do you trade to impress family and friends. This is a good question you need to ask yourself and if the answer is yes, are they impressed? Again, this is a rhetorical question. ! Is your self-image tied to someone else's idea of what you should be? Again, this kind of goes back to that rst question whether you're a doctor, lawyer, trader, banker. All these titles really don't mean much unless they mean something to you. Trading really should be only for yourself and any business should be for yourself.

You should not tie your self-worth to anything outside of how you look at yourself and how you control and then manage your business. ! Key point here is that the man in the mirror is really the only person that you need to impress if you want to be a trader. Keep it real brief there and think about that when you get into this business. ! One of the things that I will say when you look at trading as a business is the relationships you have in your life. Your signicant other, your spouse, your girlfriend, your wife, your husband. It really comes down to your relationships with your spiritual side and your family and your friends are really the only thing that matters. Don't stress and fall into the reality TV trap that is out there and try to impress anybody but yourself. ! Trading should not be, in my opinion, be used to impress and should be only be used as a tool for yourself. ! Another reason why people trade is they want to get away from the corporate bureaucracy. However, I would say are you disciplined enough to do this? Trading is a very disciplined game and you have to show up everyday. That freedom that comes with this business of trading also demands great discipline. Are you sharp enough? Do you show up everyday? Do you need a paycheck every Friday? If so, trading maybe a difcult task for you even though the freedom is offered there. Can you control yourself and that freedom and live within that? Are you constrained by your won bureaucracy? Meaning you have too many biases or cognitive dissonances that you can't get over and when you look at market subjectively day in, day out. ! Trading demands great self-reection and again, if you want to get into this business, you better check yourself and make sure that that freedom shows up in your discipline and in your approaches and designing how you're going to create a protable business. ! Next thing I want to ask, in your trading, do you have too many signals? Do you have too much noise? Would you benet from a simpler strategy?

! Again, I am not a scalper, I don't believe in scalping, I think it's ... it affords too much shrapnel on my psyche to be able to trade much. It's not that I couldn't do it, it's just I know my strengths and my weaknesses. I don't want to be in and out of any markets hundreds of times a day. I believe less is more. I believe that doing less having less noise in the background whether it's CNBC News, etcetera, monitors. I don't need a ton of monitors with technology today you can do with 2 really big screens. You don't need to have 15 screens. I've been there, I've done that, trust me you don't need to go down that road. ! Less signals, less options. Focus yourself in on what works for you. Just trade your plan, develop your plan, dene your risk and plan and play accordingly. ! Finally, reasons why you trade. Do you trade to live? Or do you live to trade? That's a big question you need to ask yourself. There is big life outside of sitting in front of the screen 24/7. I only want to spend ... really ultimately I can handle my trading job within a couple of hours in a day. I am not in and out of the market, that doesn't work for me. I can take care of capturing the big chunks of the market by looking at where signicant opportunities lie in multiple markets in a very sufcient and efcient manner. ! Dene how you want to be in this business. Do you trade to live more importantly versus live to trade. ! That's it. How do you want to dene why do you trade? These are the tough questions I think you need to ask yourself before you get into the business.

CHAPTER 2

How do we pick futures markets to trade?


! All right, I want to have a little conversation about nominal and notional rates when it comes to futures. Primarily, we treat nancials, the U.S. stock market nancials and interest rates here at MissTrade.info, along with some grains, primarily, wheat, beans, corn, oil, natural gas, and then the metals, gold, silver, platinum, sometimes. These are the primary vehicles that I trade with.
How do we pick futures markets to trade?

! When you and if become a member, we will give you the entire list that the exchanges provide of all the futures that trade, what their notional are, what the per tick, per contract, payment is on the leverage, but you need to understand, [and I've got it right up front here,] a list of the primary vehicles. The S&P market, when you buy one e-mini contract you're buying one fth of a big contract, so ve e-minis equals one big. ! This goes the same with the NASDAQ. Five e-mini NASDAQ contracts equals one big. Five e-mini DOW equals one big. When you trade one fth of
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one big contract, or one contract at a time, you're controlling one fth of a percentage of the entire S&P 500. For you to go out and buy every stock and add that stock into your add every stock into your portfolio, would cost you, literally, hundreds of thousands of dollars. The pits and the exchanges created a product, a number of products that allow you to have great leverage and be in participation in these markets. ! Understanding that one contract in the ES, every point that it moves is one fth of a big contract. Every point doesn't cost you much because of the leverage and the margins available with these products. Now that's a two-sided coin in that both the upside and the downside can be signicantly large, so you need to understand that when you get into the futures marketplace, there's a lot of leverage involved in the marketplace. That being said, it's probably also the friendliest trading vehicle out there in the world. ! If you want to become a trader, I always tell people, you shouldn't start with stocks because there isn't the liquidity and the transparency that you have in the futures marketplace. That's why we play in the futures marketplace, because there is high leverage, but with that high leverage, you have great liquidity and great transparency. The markets are open pretty much 24/7 across the board, especially when you're looking at the nancials, the e-minim, S&P, the NASDAQ , the DOW, and the Russell are all pretty much open but 15 minutes every day. ! They close at 1:15 here on the West Coast until 1:30 and then they're reopen. They close Friday at 1:15 and then reopen Sunday at 3:00. These again are all Pacic Coast hours. That gives you a lot of time to participate in the markets. ! Now, when people ask why do you trade sometimes the NASDAQ versus the S&P, and I want to give a real simple example here of why. We're controlling, again, a piece of indices when we trade, or an index, when we trade, and having one e-mini for example, I've pulled up the e-mini charts as we trade here, currently live, in the middle of a late session, 1459 is so if you had one contract, each point on the e-mini is worth $50. ! If you bought one contract at 1459, here, and you thought we were going to go higher and it went to 1460 and you sold it, that would be a one point move.
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Each point is worth $50 per contract, so you'd make $50 on that trade. Let's assume commissions are somewhere in the 250 range. In and out, round trip, that trade might have cost you $5, so you netted $45 at the end of the day. ! Now why would I use the NASDAQ? Because the same percentage move in the NASDAQ gets a little bit wider, and you can see this even using this week's charts. This week, on Wednesday, we opened up at 2686. We went as high as 2747, which is around 61 points or just shy of two and a half, 3%. That's the range that we've been trading in when you look at the NASDAQ all this week. That's 2.5%, whereas the S&P, the total range, just to point out, where we opened Wednesday, 1438 to 1460 is 22 points, or less than 2%. ! The trading range in the NASDAQ this week has been wider than that of the S&P. I will look at things like range, especially when you look at if the what I'm trying to do is take the biggest bite I can out of a marketplace when I'm participating. If I want to take a .5% or a percent, I have a better chance of doing that in the NASDAQ this week due to the expansiveness versus that of the S&P. That's one reason we'll do that. ! Another quick example that I'll use to show that is if I'm playing in the grain marketplaces, because a lot of these things tend to move, especially in the U.S. indices, they tend to move together so the NASDAQ , the S&P, the DOW, they all really move in the same manner of speak, so they're all going up and down, kind of in that same percentage range. I want to nd the broadest vehicle to play in in the respective industries that I'm playing in. The ones that have the most expense, the most price change, the most time in moving around. Those are the things that we look for as traders, is those opportunities. ! If we were looking at corn, wheat and the beans this week, just to give an example, real quick. Corn this week has been anywhere from $707.07 a bushel to 680, so you're talking a 27-cent move, which is pretty large. That's a large move on corn. That's moved almost 4%. This is unusual, so that's a big move that we saw in corn. But the notional, as far as one contract on corn, is worth 50-cents per contract, per penny. If we went from 707 to 680, that's again, 27-cents each

contract that you had in that move, opportunity, is 27-cents times 50 per contract is what you can make or lose as you're trading that. ! The same thing is true in this circumstance with beans. Beans happen to be the same. They're the same, 50-cents per cent move. Now, we said corn moved bit, 707 to 680, but the beans have moved even large, 1435 to 1356, so you're talking a 79 point move or almost 5.5% range. Where would we want to play? We'd want to place our opportunities where the market is moving more, and right now beans are wider and more expansive than corn or wheat, so we tend to focus on the areas where we have more opportunity to make money. ! If we looked at those two instances this week, the NASDAQ is better opportunity as a trader, versus the S&P. Doesn't mean we don't uctuate and trade one versus the other, it changes, and this is something that you have to be aware, and we help guide you through here in our service. ! Again, beans over corn this week or beans over wheat that week. That changes, but these are the types of nuances that you need to look at when you're breaking down markets and nding the best items to trade.

CHAPTER 3

7 secrets of trading success it's not what you think


! I've come up with Seven Secrets of Trading Success and it's not really what you think would be the typical notions of what will drive your typical trading success.
7 secrets of trading success - it's not what you think

! Most people try to make trading a perfect game. Trading is a game. I want to keep that right up front. The rules of trading are very perverse, I like to say, and are different from most games. There are rules however and each trader has to come to those rules for themselves and guring out what type of trader they are. In other words, it is not a perfect game, but here's what happens. ! Most people ask themselves, "How can I trade without taking any losses or making mistakes? I want to be perfect." Guess what? This is the perfectly normal, no pun intended, and this is how most of us are hardwired due to the fact that we're raised to be in a society of no mistakes and perfection. It's not possible in anything in life. It's unfortunate. I wanted to change that mindset when you get into any game. You don't make every shot. You don't win every game. The whole
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idea is to have more made shots or more wins at the end of the season. Outside of that, there's not much you can control but following the rules of this perverse game. ! When the no-fail setup stumbles and doesn't work so perfect, what happens? We naturally go searching for the next best setup. When this setup fails, wash, rinse, and repeat. You get the picture. If you don't have a set of rules that work in the rst place and then you don't follow them, then you're going to be in a world of trouble. As long as you're on this merry-go-round, you will either get frustrated or you'll quit or you'll blow out your account and move on with a lot of pain. We don't want to get to that ouch factor. ! What are the seven secrets of trading success? Unfortunately, most traders will experience this cycle, and with regret, most will not nd success. What I'm trying to do with this video is help you to reduce or hopefully skip that painful experience and let you move on and be a successful trader in this game of markets and in this game of trade so you can stay on track as a successful trader. ! What are the seven steps? There is no one secret, sorry, just many keys. These are, again, if doing all these things just as a basis will lay the foundation for what you need to do as a successful trader. ! The rst thing is understand that 90%, and I'd say even 95% of your success, is between your ears, the six inches between your ears, is probably the most important facet of your trading just as it is in your potting game, on the golf course, just as it is in any preparation for any athletic event, just as it is in preparing to do a surgery as a doctor. You have to have a solid mindset to do this game. That means no distractions from the outside world which is difcult. ! Turn off the TVs, turn off the news, turn off the Twitter feed, turn off the things while you're trading, while you're in the zone. If you can do those things, the number one point, which is control what goes on between your head, have good thoughts, think positively, live in the state of gratitude, all those thing matter in bringing success to the table as a trader. ! Number two, give yourself time. That means screen time. Spend time on developing yourself as a trader. This is not something that happens overnight just as
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you don't become a surgeon over night. You don't become a procient surgeon overnight. You have to spend time and years and hours in front of the screens understanding the way that things work. Again, it doesn't whether you're technical, fundamental, you use market prole like we like to use here at MissTrade. You have to nd out what works for you. ! Number three, be capitalized. This is very important. Being under-capitalized is probably the biggest killer mentally. If you don't have enough money to play the game, earn your money before you step into the ring, okay? You can't become a good amateur boxer before you've learned the skills to step into the ring. Be smart with your money and be smart being capitalized before you step into this game. It doesn't matter whether you're trading stocks, futures, options. Make sure you are capitalized. Otherwise, you'll revert back to number one and that cycle and that merry go round of losing all the time. ! Number four, use reputable mentor to provide guidance and critical feedback for your success. This is why I work here. Learn while you're earning. That's what we try to provide here at our service at MissTrade. Come on board. Find somebody to learn with. This is not something, again, you can't become the best at whatever you're striving to me without some guidance along the way. So come on board. ! Number ve, don't trade for the money. Let me say it again, don't trade for the money. You have to do this because you love this game. If you're trading well in this game, you're playing this game well, trading is not a hyperactive activity. There may be high frequency trading programs and robots out there; that's not what most individuals, small traders will ever do. By small, you could be a hundred million dollars. That's small in this game of market. When I say small, it's really zero to a hundred million dollar capitalized account. Don't trade for the money. Do it because you love the game. Play golf because you love it, because it's going to frustrate you day in, day out just like the markets will. There are frustrations in this game and understand that it's not a simple game, so you must do it for the love, not for the money.

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! Number six, have a solid trading plan that covers all of these subjects as well as other important factors. Yes, write it down and put it down in paper. Go back and revisit, revise. It's going to happen over and over again. ! Number seven, good old fashioned hard work. Study in your setups on multiple charts, multiple timeframes, understanding market prole. You can spend some time. Read some books. Outside of what we teach, there are some plenty of good material out there. I would recommend the two Jim Dalton books as a starter. This title, Mind Over books, are fantastic. Reading about your setups, reading your journal daily, and learning from your mistakes because yes, in this game, you will be imperfect, you will take losses, and you will make mistakes. That's just the way the business goes. ! Those are the seven steps to being successful as a trader. If you can keep to those simply, you're on the right track. While there are few other factors that play into your success, i.e. money management, trade setup, trader condence, following these seven steps that I just laid out, you can increase your odds of becoming a successful and consistently protable and professional trader. Remember, this is a game trade, a trade to win; but understand that losing and missteps are part of the process.

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CHAPTER 4

3 good habits of a successful trader


! Let's talk about successful habits of traders who do well in this game of trading. I've got three basic habits that you need to have to play the game of trading, and they're pretty simple.
3 good habits of a successful trader

! The rst is patience. You need to be able to wait for the market, and wait for the trade to come to you. This means as a limit trader primarily we're not chasing the market. We're picking spots to either buy, or sell, or not play, and we use limit orders that could be a bid, or an offer, and we, also, use buy stop and sell stop orders, depending on where we think the market could fall, or go higher, and break either way. So, very much like a surfer, we're out there on the board waiting, and waiting, and waiting, but patience is real key to this. ! Number two. Can you take a loss? Loss is a part of the game. They're integral. You will not be perfect in this game, and if you are, and you think you can be perfect, then I would suggest you look at a different career path, because trading will not be for you.
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You've got to be able to take losses. You've got to be able to understand wins versus loses. You don't even have to have a winning percentage. As a matter of fact, you could win twenty, thirty percent of the time, just like a batter in baseball hits three hundred, his hall of fame caliber, if he can do that his whole career. It's all about where you establish that risk in that trade. So, if my risk is small, and I have a big upside, again an anti-fragile moment where I know there's a big upside, or there's a big wave to surf, all I need is to take a piece of that to the upside to make signicant prots in this business, if I dene my risks. ! Then, number three. These are the most important things. The number three bullet point with a successful trader and their habits is having the game plan, following it, doing your homework, doing the set up work, so when you come into a market you know where the opportunities lie. This is what the market prole does for you, and does for a trader, and this is why we use this tool. It is a tool. ! There is no holy grail. Do your homework. Have patience, and understand how to take a loss, and you'll be a successful trader.

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CHAPTER 5

Two way trading


What do I mean by two way trading?! ! Markets as we know can either be trending up, trending down, or basically not trending. Those are really the three ways the market can be moving. Recently most of late April and May (2013), we were basically trading up in the shorter-term markets for the month. As a matter of fact, I think we had about 29 days in a row that we were up.! ! The problem with a market like that is it doesn't give buyers an opportunity to really have a pull back and it doesn't give momentum chasers an opportunity to buy a break out. What I mean by two way trade is two way trade offers the best opportunities. You can make money both on the upside and the downside when the markets become more volatile.! ! We have now entered into a market that is more volatile as it comes to two way
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Two way trading

trading, so what this means is you want to be aware of the signicance of the market now being more volatile and being able to say play the short side, but also be aware that counter trend rallies happen often and they are often very, very violent and you need to be aware of this.! ! Take a little bit of your position off, maybe a core short position, get long a little bit, ride it up and sometimes this is difcult for some people to do. They can't switch from the bear head to their bullhead, or vice versa from their bullhead to the bear head. Yet nothing goes straight up and yet nothing goes straight down, so as reversion market prole traders, we are always looking for the best opportunities on both the long side and the short side on the interim.! ! This is the best way to make markets and trade as a trader, are really in these functioning in these two way markets, so be aware that when you transition from a trending market like we have been in that really did not give you much pull back because of the fact that the FMOC, in this case, was in buying in the market and the market was just trigging up slightly but you could not buy a break out and there really wasn't a pull back that was signicant enough.! ! It was almost a buy and hold market there for almost a six week time period. I just wanted to bring up the point that a two-way market needs to be one that you are able to, again, play both sides of the market. Sometimes you may want to have two accounts. One for the shorter term and one for the longer term, it is one way to manage this.! ! Just think about this moving forward. Two-way markets, again, understand that nothing goes straight to the moon and nothing goes straight to the basement. Be a two-way trader; don't get locked into a bear suit or bullhorns. Become a two-way trader; this is the best way to make money as a trader. You want to look objectively and say, Are we too short? Are we too long? Are you nowhere and there is no trade?! ! These are the things that you have to look at when two-way trading.
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CHAPTER 6

How long will it take until i can trade on my own?


! Let's talk a little bit about how long it will take you to be successful or not successful in this business of trading and why I believe as in any profession having their very good mentor helps in alleviating some of the pains that come in that process.
How long will it take until i can trade on my own?

! First of all, to be successful in trading you have to be well capitalized. Don't let anybody tell you ... 99.9% of the people are not going to turn $2,000 into 2 million in a year. I don't care how good their mentor is. To be well capitalize really has a big chunk in knowing whether you're going to be successful in the long run or not. ! I think if you're going to run trading as a business, you better have enough living expenses to subside, pay for yourself, your family, your overhead, your expenses for at least the next year, year and a half before you even step into this game. If you want to try to spend all of your time on that, expect to make no
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money. That being said, it doesn't mean it may take you a year, a year and a half to begin making money but if you're not well capitalized and you don't have enough living expenses, your mind is going to be surrounded by how am I going to pay my mortgage? How am I going to pay for the kids' tuition, food bills, etcetera and you won't trade with diligence, patients and focus. ! Being well capitalized is rule number one. Having the right mentor I believe will streamline that process. ! Let me also categorically say that not everybody is made out for trading and here at MissTrade we spend a lot of time with our students that come trade with us one on one or they take us up on our concierge services where we hand held ... hand hold and help the process along in the overall person more than just a week. We can help eliminate and at least point out those typical t falls that show up over and over again outside of the capital constraints. ! You really need to nd yourself into a situation where you can afford to live without your training income for a period of time until you can nd out if you are successful or will not be successful. Again, not everybody will be successful in this business and you need to be able to sustain yourself during these times. ! Trading again is like any business. You may make 80% of your money over 20% of the time. Trading in itself is more about preparation and planning than it is about the actual act of putting and taking off a trade. Don't get hung up software, hardware technology and things that you need to be successful as a trader. If you are well capitalized, have the right mentorship and will to put in the time. I do believe that the right skills can be found for the individual. ! Not everybody's going to trade like me, not everybody's going to trade like the person next door, but you should be able to pick out the right mode that ts your trading personality along with your own living personality and those really need to jive to be successful. ! I think that a realistic period ... again, if you want to become a doctor, you can ... you could do all the book study in a year possibly, but you're not going to be operating on a patient tomorrow. There's processes that have to happen to become a successful doctor just as there are ... you're going to have to go through a number
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of cycles as a trader just to start feeling normal and 1 year isn't necessarily going to be that. ! There are bull markets, bare markets and in my 20 plus years I've gone through multiple iterations and multiple markets of both bull and bare. Think about this as you sit down and go through this. This is a get rich quick business, it takes a lot of preparation, a lot of work and it's going to take you at least a half year. I've seen folks that are very good, very intuitive but they're going to through those periods where they're going to question themselves, wonder if they are going to survive and being well capitalize and being able to sustain yourself when you're not making money and there are periods in every trader's lives, we're not going to be making a ton of money. You need to consider this and really do your homework before, nd the right mentor that ts your personality and jump in. ! Again, I don't think trading is for everyone. Honestly I try to deter people before they even consider getting into this business. Keep that in mind. It is not a get rich fast business. Find the right mentorship, be well capitalized and as always, trade less, earn more, be patient, diligent and you'll be successful.

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CHAPTER 7

Why traders fail


People always ask me, "How can I become a successful trader?" I'd rather look at what can you do to remove the one or two negative things that will make you successful. Nassim Nicholas Taleb talks about this in his book Antifragile, and calls it removing the negativa, and so that's why I titled this video Why Do Most Wanna Be Traders Fail. It's pretty simple. There's three or four basic things that I would say that I would say that you need to focus on.
Why traders fail

! Number one. If you don't have a plan, if you don't know why you're playing this game, and what your goals are within that. It doesn't have to be very particular, but you have to have a plan. If you don't have a plan, you're going to fail. ! Number two. We talk about this all the time. If you're under-capitalized, don't step into the game. The money will be taken from your account quicker than

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you can you, "Bye bye." So, come into this game well-capitalized before you enter, otherwise you're not giving yourself much of a chance. ! Number three. I see people coming in chasing performance. What do I mean by chasing performance? Well, it could be a couple things. It could be having a strategy written down, and then straying from it. We call that style drift. Just because something becomes hot, or another vehicle becomes hot, you rotate from one asset class to another, or one stock to the next, or one future to the other. If it's not part of your initial game plan, check yourself. Slow down. Don't chase. Cars hit dogs that are chasing another car. That's just the way it works. So, if you want to stay in the game, make sure you're not chasing. ! Number four, and probably most important. Learn again ... learn again to take risk out of the equation by dening them upfront, and being able, and being okay with the fact that you're going to take loses in this game. Dene your risk. Name it. Live with it. Own it. You will not ever be perfect in the game of trading. ! That's it. So, if you want to succeed, and want to know why people that try to be traders fail, avoid one, if not all, of those things, one at a time, and you will become a successful trader.

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CHAPTER 8

Hard work is different than hard to-do work


! All right. Welcome back. Again, another great day for markets as the Dow closed at all-time highs today. The NASDAQ is still well below its all-time highs set in 2000 of 5000 or so, but it did close at 2800, which is a new year high.
Hard work is different than hard to-do work

! One thing I wanted to point out today is, again, day trading wise on the NASDAQ or the ES has been very difcult the last few weeks, up or down. I really have found very little edge intra-day out there. ! Coming into today, as you can see here by the charts [in video], we were pretty bullish. We were bullish based on yesterday's action, and then we gapped up overnight, and we closed yesterday at 2762 area. We gapped up, and we kind of held in there most of the night, and then around 3:30 on the West Coast in the morning, so three hours before the open, we really ramped up, and we had a huge gap-up again, 14 points of a half percent.
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! That's a big move, and really, basically, in the rst hour-and-a-half of trading, we hit the day's highs. We'll call it a little bit higher here at 2803, but we settled in right around that 2795, so really, most of the day was spent, 2790 to 2801, most of the day was spent in a 10-point range. ! I wanted to bring this up because we kind of did the same thing in oil. We only took one trade today, and it was in oil. As you can see here by the oil chart, we thought oil probably had put in a bottom yesterday. Actually took a long off the open there near $90.60 a barrel. We bought a contract, and basically, we're waiting for pullbacks. ! My bid was down today at $90.01. We got to $90.02. It's frustrating watching this happen over and over again, but the point I want to make is that in trading as with any art or game that you become an elite player, if you're super busy all the time, you're probably doing something wrong, and I was doing some homework on this subject a lot as I thought about the day and how frustrating it was that I had the right trade really the only trade I wanted to take today was the long in oil, and picking that area down here at $90.01, I was a little impatient buying off the open because I didn't want to miss a run, possibly, to $93. ! It looks to me like we're oversold, and we're probably going to run the next couple of days at $93. I was thinking today might be that day with the rest of the market taking off and the dollar weakening. ! I was a little early, bought a little bit, but my plan was basically to buy at $90 and then buy again at $89.60 and be out at a new low today. We never, obviously, got to either of my additional buys, so a bit frustrating picking spots. Sometimes, as a limit trader, that's what happens. ! Getting back to the premise of what I wanted to talk to today's video is, if you're busy and you're always doing something, you're probably going to be wrong, and that really applies quite a bit to, again, the trading game. The best traders I know are willing to basically take their lumps and say, "Okay." ! Again, I had a great narrative today when it came to oil. I had a very good narrative as it came to DNQ , and I decided not to trade. That was really my trade
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today in the NASDAQ , so I executed A on the NASDAQ , and I executed actually probably a B on the CL. I just missed it by literally a tick. ! That's the way it goes. I wasn't sitting in front of the screens. I left my orders at $90.01. I left my orders at $89.60, as you can see here, and then walked away, and they never lled. We did take small prots out of the trade, so I give it a B, B+ on the execution also. Not a bad day. ! Again, really, what you're going to nd between the elite traders and the average traders is basically what you're going to see over and over between the best and the most average. ! Hard work is very different than hard-to-do work, and to summarize, this is really how it's going to play out, the way I see it. The average players are working just as many hours as the elite players. ! Let's say they both average around 50 hours a week, but the average players are not dedicating the right hours to the right types of work, i.e., their homework, their narrative when it comes to trading, spending almost three times less hours than the elite traders is crucial on that deliberate practice. ! For traders, that is really, again, setting the narrative, writing the narrative, where I think the market could go tomorrow, what my behavior will be at certain price levels, up or down, and then coming in in the morning and seeing where we are as to relation to, rather, the narrative that I wrote the night before. I set a narrative tonight, do my homework. ! The spread, and then what you end up happening throughout the day is if the game plan is on task, and you're executing properly, you shouldn't work haphazardly throughout the day. Again, today I took one trade. We made a small amount of money but it was a good trade, and the other trade in the NASDAQ , I chose not to take. ! There was not really an opportunity for me in the grains. I did not take a trade there, so again, I executed. ! If you end up working so manically and haphazardly throughout the day, you're going to end up feeling that you did more work than the elite traders, and
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the elite traders really do less work. This is why we go back to the whole "Less is more." You end up sleeping less, and you end up feeling more stressed if you end up doing more manic type behavior and in my opinion as an elite trader, you want to focus on doing less, and if you execute well, you'll make money over time. ! Here's what it really comes down to: Hard work, again, coming back to hard work is different than hard-to-do work. Hard work is basically deliberate practice. It's not fun while you're doing it, but you don't have ! The elite traders spend, on average, three-and-a-half hours per day engaged in deliberate practice, and I would say this is very true in the way I operate my business. I'm busy the very rst thing in the morning, maybe a little bit in the middle part of the day, setting up the afternoon trade, and then at the end of the day. I break my trading really into two sessions, and it's very deliberate practice or preparation, if you will, for the day's trading. ! It also provides a way for me to measure my efciencies, my executions, and my plan. This generates for me a strong sense of contentment and motivation every day as I come in here. Therefore, although the work is hard for shorter periods of time, it's not as draining, and it can t nicely into pretty much a relaxed and enjoyable day, and today was one of those. ! I'll tell you. I watched a couple of the 2012 Oscar nominees, movies today, because again, the NASDAQ was stuck in this 10-point range, and I'm not looking to play in that kind of mess until we kind of break out of that, and it wasn't happening today. You could tell it was a slight trend day after a trend day yesterday from the second half on, so we just stayed away. ! We got long oil, and we stayed long in the position. We got out, made a little bit of money, and that was the day. It happened. ! Hard-to-do work, on the contrast, is draining. If you're hyperactively trading, scalping, running around all day in a state of false busy-ness, is what I'll call it, that will leave you like average players, like average traders, feeling tired and stressed. ! As we have learned, it also has little to do with real accomplishment, so if you really want to focus on trading and working hard for short amounts of time versus
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hard-to-do work, this is really a key point that I want to drive home today, so focus on this. Make your goal to live a more remarkable life, not being in front of your screens all the time, having a game plan, sticking with it, following it, adjusting and basically pivoting when necessary but knowing when to make those pivots. That's very important. ! If you do that work before, your exhaustion levels will go way down. You'll be better rested, and you'll be able to make yourself a better and more productive trader.

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CHAPTER 9

The not knowing path of being a trader


! Once again I was going The not knowing path of being a trader through Leos work at ZenHabits.net and I found a piece that applies very directly to trading and I want to call this the not knowing path of being a trader. He did a little piece a bit ago was revisiting about being an entrepreneur. It really applies to all businesses and trading as a business. I want to talk about some of the pieces that people get into again this trap. Weve kind of talked about this envy trap and lots of people get into trading for the wrong reasons. They think that they can become very rich overnight. They think that they can become rich quickly and fast, and its really not the case. Its also the same thing if youre trying to run trading as a business and start this is as a business operation. ! You need to really step back a little bit and consider that all of us really cant control too many outcomes. One of the things that a lot of people try to control when it comes to trading is they have a very severe vision of their business and
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theyre trading business and the success of it. If it falls off the track they get a little bit behind. They also try to control the outcomes associated with goals, so I want to make $2,000 a day. I want o make $500 a day, I want to make 10 points in ES today. This is not a linear business as any business is not linear. Its very difcult to set yourself up for failure and put those goals out there. Also I think trading is much different than many businesses and that its not the more you do, doesnt necessarily pay you more. ! Matter of fact, I truly believe that the less trading you do and the less activity you have around the markets, the more successful you will be. Also trying to control the outcomes as it comes to producing in certain amounts again of money that youre making based upon how much you trade or certain metrics is really setting yourself up for failure. Unfortunately, the ability to control outcomes as a trader or in any business is really an illusion. Theres not much you can control when it comes to markets. This is something I want to talk a little bit about as being a trader for 20 plus years. You really dont know how a trade is going to work out. The only thing that you really can control is the risk and even that sometimes you have not total control. ! The one thing that I want to talk about today is again accepting the fact that the unknown and the outcome of your trade doesnt necessarily ... shouldnt scare you or at least you should embrace that unknowness or that fear that maybe grappling with as you become a better trader. Not knowing for me is what makes being a trader probably the most amazing job opportunity I call it. For me trading is not really a job, its something that I enjoy doing. Its a great game, I say this all the time. Being okay again with that unknowness is really something that you have to get around and embrace. It can be liberating and lets take a little bit of a look at some of the things you can do when you want to embrace that unknowness that comes with trading. ! For most people, one of the biggest difculties in trading is being wrong but really what is the worst thing that can go ... that can happen with having a trade that you lose money on. If youve established risk parameters that really keep you on the game and allow you to come back and take the next trade over and over again, again whether its 1%, 2%, 5% you have to establish that. Once you do
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that, if you are good with that risk level that you set, theres really a million possibilities that can go right and you know what the ... if you can again limit that downside youll have I think, less anxiety. Thats one of the things that I want to talk about as we consider the situation as embracing that anxiety that comes with it. ! You shouldnt be tied to one trade. No one trade should really dene you as a trader, good or bad. I think that is really the best idea. Its the little things that matter, its just like I tell my boys on in the golf course, that last golf shot you took whether its great or whether its poor, its not going to matter to the next one. Its how you deal with both the good and the bad and moving forward that allows you to be good with the anxiety that comes with running a trading business. You have to be more honest with yourself and [made 00:04:38] into yourself that you really dont know whats going to happen with this trade is probably the most honest approach that you can have. Hoping things will turn out the way that they want obviously is great, but honesty is much more important than hope. Be honest with yourself. Know where your trade is, why youre taking the trade into the trade and thats going to be the best thing, honesty with yourself. Again, the game of trading is not about me versus you, or you versus the high frequency traders, its me versus me. Me versus the man in the mirror and thats the most important thing that I think you need to look at. How do you walk this path of not knowing whats going to happen with the trade? Heres some steps that I think you can follow to walk this path. Admit what you dont know, this obviously is the rst step but its hard because we dont often want to admit that we dont know something. That again its that ego that we have to let go off. We think we can will things to happen but its not true. Many things fail despite all the planning and all the narratives that we write, and managing the trade, entering the trade, sometimes it just doesnt work out. Number two is watch for the anxiety. When you start feeling anxious and it will always happen in life as in trading, as in anything, raising children, in a relationship, probably numerous times in a day, when you feel this way start to look inward for that source of anxiety. What do you think it is that is making you feel this anxiety? What are you hoping will happen thats making you anxious?
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This awareness is the key to everything. Number three, tell yourself youll be okay. You make a winning trade, you make a losing trade, either way youre going to be ne. You become aware of an outcome youre hoping for. Now, tell yourself that it doesnt matter if that happens. If it really doesnt matter, if we made up the story for ourselves that all depends on it happening. It doesnt matter, no matter what happens be content with the good, the bad, or the indifferent. Youve got to get yourself into a spot. Again another truism that I nd on the golf course cures over into trading. Will you remember that bad [taught 00:06:57] golf shot you hit off the tee yesterday, just as you would a slip in a trading world. A bad trade that you made again wasnt bad just because you stopped out and had a loss thats not a bad trade, thats a perfect execution. Every trader is going to go through losing situations. Number four, consider the worst case scenarios under trading. Whats the worst thing can happen with this trade? Well, if you know where your stop is then thats the worst thing that can happen. Now, if you dont know why youre taking the trade, you dont know whats going to happen to it then you dont have management of that situation. Dont worry about that loss in that trade. How bad is that worst case scenario? Probably it shouldnt be that bad if its half to 1% to 2% of your overall trading capital, youre going to have to do that 50 or hundred times in a row for you to lose your trading account. Again consider the worst case scenarios. Know your principles, why are you doing this business? Why are you trading for a living? Why are you trying to run a trading business? Take some time to think about what should guide you. If you arent guided by trying to make something specic happen, youre not going to be tied to an outcome or a vision of the future you cant control. Step back, reect what drives you. Are you trading for the money? Are you trading for the freedom? Are you trading for other reasons? Why do you want to do this business? Think about this, know your principles when you get into this game of trading. Act on your principles is number six, not on your goals or your detailed plans. My plans and my narratives change all the time. I have to accept that the market is always going to trade. I will be right sometimes, I will be wrong sometimes but Im doing this because it is the right thing for me, the right thing for my family. Dont
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let other peoples ideas and visions control you on a day to day basis, moment to moment. Listen, we all go through draw down periods. You got to get comfortable with that, act on your principles not on your goals. Breathe and dont forget to smile, this is very important. I always say this to partners that come trade with me, dont forget to take a deep breath and dont forget to exhale. Sometimes you just have to breathe in and out, and smile green and bear it because thats all it can be. In the end, not knowing, sure can be scary but it can be liberating and quite profound if you just let it be to the ne four from Manchester. Anyways the point here is you cannot control the outcomes ultimately of your trading business. What you can control is dealing and feeling, and letting those emotions again, let that anxiety be, let it live there and live through it, breath through it. Dont forget to breath and smile. Well see you on the other side, peace.

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C H A P T E R 10

Trading shouldn't control emotions - losing or winning $$


! All right - pretty balanced. We're now 6 trading days. This was the day last Tuesday which is now full week, full 6 trading days where we've really been balanced here between 2784 up to a high of, we saw 28 17 on this tip up last Thursday.
Trading shouldn't control emotions - losing or winning $$

! Where does this leave us? Today, we came in with a pretty simple narrative. We wanted to sell rallies up to that 2817 and the overnight session, we couldn't make a new high overnight on the European and Asian session. We came in, we told our members we want to be short but we want to wait for time. We waited for about an hour of trade to go by before we got short. We got short right at 2799.75 and we told out members we probably are likely to test this low that we put in late week, early last week around 2784 and sure enough we went to that number almost to a T. We then sold this rally again in the afternoon and pulled back not quite touching that and 2 short tied trades, they're really the same trade twice.
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! The key point here is the total days ranges only 22 points and we ended up netting and taking out on the day about 22 points of the NASDAQ , a very good trading day. ! Again, when I look at trading anywhere from a quarter to a third and a great day as far as pulling out maximum points is a day where I can pull out on a day trade half of the nominal range. Today, again we were 22 points wide on the intra day range 2805 down to 2827.83. Just about 23 points and we pulled out about 9 points or about 40% of the day. ! Here's where we are. One thing I want to talk today is the idea about trading. Trading ultimately for most people is going to make them feel bad and what do I mean by that? Well, it's pretty simply, if you lose you're going to feel bad, that's obvious. Not only when you lose that you feel bad but when you win, sometimes you feel equally bad. You're probably sitting there and saying why is that? Why do you feel bad when you win? Well, the bottom line is, and this is kind of where you come into the psychology of it is, you see the top today which is 2805 and we could have sold that every early in the open but we waited for a conrmation. ! Again, don't feel bad about not picking a top and a bottom. Not ... just by a simple reason, there is not ... it's very unlikely everyday that we're going to sell the top and buy the bottom and both the long and short side of things. You have to be content and be happy with what the market gives you everyday. ! When we say that it's not about necessarily how you deal with the loss but how do you deal with the win? Today's a perfect example. Coming after yesterday where we saw no trades in the NASDAQ. Today, we came in with again, a solid game plan, we acted on it, we waited for time and then the C period, right around 8:00, 7:45 rather, was where we put the trade on. That trade happened pretty quickly in the next hour. I was ... plenty of opportune time to take it off, we took it off. ! When you win, I don't want traders for feel like they have to have held for the perfect, for the maximum. I did not get out here at the bottom at 2783. Matter of fact my average was somewhere around 91. I ended up pulling out about 8 or 9 points out of the trade. That being said, we also ... the next thing that winning
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traders nd difcult to do and it's pretty obvious on why they feel bad is when you get late in the day, you try to ... maybe you start trading more and over trading. We were looking for a bounce, we took it, it gave us a few more points later in the day but we weren't ... at that point I didn't trade after ... I think it was around 11:00 here on the West Coast. 2 trades happened before 2:00 in the afternoon East Coast and I didn't put on another trade. ! Sometimes in the past, traders that are successful, including myself would have gotten back into the market. I was very content with taking almost 40% of the nominal move out of the NASDAQ today and be stuck with that. That's one thing I want to focus on that we work on with our education here @Misstrade. ! Don't give back your prots when you have a good day. Go ahead, take the rest of the day off. If there's not great opportunity trades ... and in this market where the volatility again is back to 7 year lows, you're really looking at 1 to 2 trade opportunities a day if your intra day training, ! You have to really focus on good entries and her plan was set in stone. We were able to move it but there was no trade set up that we like, so we didn't take one. Today, we took the trade, it happened, we made our money fairly early and didnt get back in. ! When you're winning, don't feel bad by not hitting the top, catching the bottom and also don't feel bad about not taking this long trade that looks easy at the end of the day. It wasn't that easy. You guys, she could have bought here 8485 again late in the day and then gotten yourself anywhere up to 13 points back. It's hard to trade 2 ways in an intra day market that is so tight like this. Don't get too hard on yourself. ! Also this is why I think this is so important of a subject in this video today. Be happy not only with a at day like we had yesterday. Be happy with the day that you had good wins and good points taking out of the market today. Focus on these things folks and you'll really help yourself drive home success as a trader.

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C H A P T E R 11

Entries and exits are key to trading


! I wanted to put some thoughts down on are you a better at initiating a trade or managing a trade and exiting a trade. They're very two distinct things that I see often with students that come and work with us here at MissTrade. A lot of people nd it hard to initiate a trade. They're looking for the perfect entry. They have some paralysis around nding the perfect entry.
Entries and exits are key to trading

! One thing that we work on with the market prole is the entry and exit areas versus all in all the time. What I mean by that is at many times, you don't have to be perfect with your entries nor your exits. Again, what we're trying to do here every day is trying to take the meat out of the widest ranging, most liquid trades that we nd out there in the marketplace. ! Really, a way to look at the market is more or less, and what the prole helps us do is nd the areas of interest, nd areas that we have higher odds of succeed36

ing with our entries and our exits. That's one of the things that I wanted to talk about today is, again, are you better entering a trade or managing a trade? Really, they're two distinct things. You really need to work with an encounter to be successful. ! Now, one of the things that, once you get into a trade - people are poor at is maybe they haven't even established what the risk is. If you can't establish a risk, you shouldn't enter a trade. The rst thing I like to do before I ever get into a trade is know absolutely where my fail-safe or where are my bail is, where my risks is. Now, that doesn't mean that it doesn't change over time, both time in the market and the premise of the market. The one thing that you have to do when you get into a trade is know where your risk is from the onset. ! That can change. Let's say a trade goes with you and starts going your direction the way you want it to go. Obviously, you have to have a strategy in place to manage that trade and manage that risk. Maybe it is moving it to a breakeven spot at a certain level or moving it to just above so you have some prots, and then letting the trade really run its course. Can you stay with the trade as it's working for you? It's a hard thing for people to do when they see prots, no matter how big or small, a lot of people like to take them too quickly. ! One of the things that we really work on and focus on is helping you to really be comfortable in establishing that risk rst because if you do that, your entries will be better and then you'll be able to stay in the trade as long as the premise of the initial trade and the risk stays the same. You want to stay with the trade for as long as you can. Now, the more time you spend where you may not be the trade may not be working for you, you want to probably adjust your risk component. Time is a part of the risk situation. I always tell people, sometimes the trade maybe working for me or maybe slightly against me; but the time, the longer the time goes on, the more difcult it is, I think, to stay with an initial premise. That's one thing that you want to focus on. ! The third issue is when to trade and when not to trade. Sometimes, you dont have to be in the market to be taking a trade that is a trade and that is a choice. Entries and exits are important in managing the trade but when to trade and when
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not to trade, that's really the third component of are you better at entering and exiting or are you better at managing the trade. Can you sit and not trade? ! Those are really, again, three distinct opportunities and possibilities that are really key components of managing the entire process from the onset to the close. That's really what we wanted to talk about today. Are you better in entering the trades, establishing risk, or are you stronger in managing the trade once you're in it.

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C H A P T E R 12

The art of letting go in the midst of trading chaos


! How do you put yourself The art of letting go in the midst of trading chaos into a Zenful or peaceful state of mind in the middle of chaos and/or stress? What do you do when your trading or your personal life is a constant source of busy-ness, rushing around, nose to the grindstone type of trading and stress, or how about this situation? What do you do if your life is relatively simple, and in that fact, if your trading is simple and relatively stress free, but something blows up and causes chaos, and you're in the middle of that high stress all of a sudden, like a fat nger trade where you've put on too many contracts that you were looking to buy or sell? ! How do you deal with these types of situations, and how do you get to a place of contentment and a place of peace and really, that art of letting go is something that I'm constantly working on and allowing myself in both success and in poor trades to be good either way.
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! One of the things that I want to talk about, some of the steps that you really need to work on, is how do you get to that fact of just letting go? Some of these steps, again, are: ! Number One: Notice why you're stressed. What external event in your trading is stressing you out? What external event do you fear? What fear do you have from these external events? ! Number Two: Notice what you're holding onto. If your response if fear, is it because you're holding onto something that maybe is not real? It's probably a fantasy or wanting to control something, and in the markets, we know we cannot really control anything but our buys and our sells. Outside of that, we have very little to control. ! When you want something to turn out a certain way, wishing things would meet the expectations of a positive trade, if you're saying, "It should do this," or, "It should be like this," then you're holding onto an ideal expectation outcome that may not be real. ! Number Three: Realize that this expectation or ideal is not real, that it is a fantasy, and this expectation, this wishing you could control things, is really just made up in your head. To be fair, we all do it, but it's a real thing, and it can be let go. ! If that's hurting you see if that is making you feel uncomfortable, this thing that you've made up in your head to cause stress or fear in your trading, you've got to be able to let go, because it's really going to shorten your lifespan as it comes to being a successful trader. ! Making yourself aware of these expectations and these outcomes that you really have no control over is very difcult, and one of the things I think you have to do is just let go of it all. ! When you get into a trade, I think it's easier for me at least, it is easier to acknowledge exactly where I'm going to take a loss on a trade. That way, I've already accepted the fear, the risk that is enabled and put into any type of trade that I put on. If that is still causing you pain, then you've got to get over some of these
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expectations and these control issues because trading is probably much like the rest of life. ! There's very little control you have over what the FOMC's going to do, over what somebody's announcements are going to be, and there's a myriad of things that go wrong market wise, individual equity wise. There are so many things. You just have to let go. It's not worth it. ! Come in with a plan and narrative, and prepare yourself for these anomalies that happen over and over again. Release that pain that you're dealing with as a trader, and you'll be a better worker when it comes to showing up every day in making prudent and smart entries and exits as you move toward your path to trading success.

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C H A P T E R 13

9 rules for a simpler trading day


! Leo was back again today with some great inspiration for rules for simpler days, and I've obviously taken it into the trading world and made it 9 Rules for a Simpler Trading Day.
9 rules for a simpler trading day

! Number One: Know what is important to you as a trader. In other words, get rid of the noise that is in the background. This is going to be a continuous theme that we continue to drive home here but as traders, we need to focus on what is important, and nding the time of day that is important is also real crucial. ! Focused on the most important tasks to succeeding as a protable trader, and go from there. Figure out what those top one to three items are, and make them happen. ! Number Two: Visualize your perfect trading day. I think this starts again with the narrative, which we've talked about on and on again here, but you have to
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really do your homework, gure out the markets that you're interested in looking at. Write a narrative. Where has the market been? Where could it be? Behave within the constraints of that market for that day. Visualize it. Engage yourself. Understand that situations change and accept that change, and that will make visualization of your perfect day happen. ! Number Three: Say no to extra commitment. If you're trading, try not to schedule meetings in the middle of the trading day unless it's during that slower time when you nd that trades aren't available for you, but say no to extra time commitments that take you away from important tasks and staying on task to your perfect visualization. ! Number Four: Limit the number of items you trade and the number of trades. I think this is really key. We don't believe in scalping. We believe, get yourself well capitalized. Set yourself up for success by being number one, well capitalized, and then limit yourself to really no more than three items that you want to look at, whether it's one stock, two stocks, three stocks, whether it's the NASDAQ , oil, natural gas. Pick three things that you want to focus on, no more, and honestly, you could probably start with one. Limiting your tasks will make you have a more productive, simple trading day. ! Carve out time within your trading day. This is Number Five: Carve out time to give yourself a break. Go get a coffee. Go for a walk. Work out. There are times in the open market hours where you don't need to be sitting in front of the screen. This is really important to my daily success, and I would recommend you put this into part of your simple ways to make your trading life much easier. ! Number Six: Slow down. Very simple. It says it. It speaks for itself: Slow down. Find the time of day that works for you as a trader. Own it. Be engaged. Slow down. ! Number Seven: Single task. Again, this kind of goes along with the same tasks we've been talking about here, but please, nd yourself engaging in the trades that make sense. Don't style drift. Don't get away from things that are part of your normal distribution in your trading day.

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! Number Eight: Turn off the email. Turn off some of the screens, the distractions that get in your way and let them go. Email, paperwork, again, CNBC, research reports. Trade what is in front of you. Get rid of the smaller tasks and batch them for later parts of the day. Read your email maybe twice a day, maybe three times a day. Read your IM, your texts, maybe only certain parts of the day. Don't respond to every single ping and noise that's going on in your life. Make your trading life much more simplied. ! Number Nine: Finally, here, to 9 Rules of Creating a Simpler Trading Life is create space between both trading and your personal life. Don't bring it home with you. Find some time to work out. Do some things for yourself. Do some things for your family, for your kids, for your community. Find some time to create some space between work and home life, church and state, as I say. Create some space between, and these should help you to nd a simpler trading life as you go on in your trading career.

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C H A P T E R 14

Unique differences between day, swing & long term trading


Lets talk about the distinct differences between unique trading styles of day trading, swing trading and investing. If you dont know the difference between these, again, make sure that you can dene those before you get into the trading game.
Unique differences between day, swing & long term trading

! Now, most of the trading that I do intraday is in a trading account. This should by no means be every last dollar that you have to invest with. You have a day trading account. You should have a more intermediate swing trading account, which could go from a day to multiple weeks, up to months I would day. ! Then, investing should be for the type of operation, where you plan on buying a company and holding it, and hopefully receiving dividends and growth in a stock portfolio and a bond portfolio. These are things that you really shouldnt

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look at every day, and really probably more than once a month or quarter should not be on your radar. ! How would I break that down? Id have multiple accounts. I would have a long-term investing account, whether its a multitude of 401Ks, SEPPs, different property product there that you can put together, where you again, build a diversied, but not overly diversied portfolio that you dont make a ton of decisions. You may make two to ve moves a year on something like this depending on how much capital you have, but again, thats something you need to go over with your nancial advisor. ! Swing trading allows you to take a look at positions that maybe are attractive from either the long or the short side over again, from a period of a day to up to multiple months. Id say maybe up to six months youd have a swing trade type of account. Then, youd have a more speculative day trading or two-day trading account that really doesnt take a ton of your overall capital, but it allows you to take some opportunities and learn how to make money on a regular basis, take money from the market by looking at some different strategies in the marketplace. ! Make sure again, that you separate those three entities. They are uniquely different. If youre not doing this, it could become you dont want a trade to slip into a swing trade. You dont want a day trade to become an investment. Make sure youre not crossing those boundaries and those borders when youre looking at those three uniquely invested principles.

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C H A P T E R 15

Short complacency and long volatility


Let's talk a little bit about volatility. Volatility is something I think that is ... can be over utilized and underutilized.
Short complacency and long volatility

! What do I mean by that? You hear people talking about volatility all the time. The $VIX in itself used to be a measurement of the options on the SMP 100. This kind of evolved over the time and I can't even tell you exactly how it's derived anymore. Therefore, as industries change, as the $VIX has, it becomes a little bit different to ... and difcult to analyze. Much like take information and much like prices in the SMPs since they're always guarding the old names that ame out in the SMP and bring in new names. It's got an upward bias always. These things really are important to understand how they function. ! One thing that I believe that we're seeing as it relates to volatility right now is volatility is becoming more and more volatile even though we've been in a range
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here, most of 2013 where volatility, the index itself has been less so of a number and kind of hanging around that 12 or 13 area for a good chunks of the time, but then we get these very powerful spikes up to the early 20s for instance and then 2 days later we're right back into the 12ths. ! Understanding the context of volatility is as important as the number and I think because we have so much intervention between QE over the last 4 years and we have so much FOMC chatter almost say a dozen time a week we have different fat heads talking to us, we've got jobless numbers. We've got a litany and we've talked about this. We've got a litany of economic indicators and jobless claims, GDP, CPI, PPI. ! The more that the government tried to intervene with free markets, more and more people, more big money leave the market and what that tends to or where we're kind of heading right now is we're in a period where we get these great swing and intra day, week, month volatility, yet the number stays relatively low. Why is this important? Well it's important to note because in environments like this, it makes it very difcult for very short term traders to trade with sides. ! If you're out there trying to scalp in a ... in a volatility environment like we're in, I'm in a state of mind right now where you have to be short complacency in long volatility. What do I mean by that? We're in a state of market right now that I think people have been very comfortable with buying the dips. There arent really dips per say to buy that I would buy as a trader but it seems to me that the small short term money is buying any little pull back that they get and that's been the case all year because of the winds behind us from QE. ! Now, everybody keeps talking about taper and I don't think a taper's going to come. I think it's already well into the cards that the fed and the money policies and the scal policy, the monetary and scal policies are such that they've painted themselves into a hole. They cannot stop printing money. The dilemma they have in the bond markets are already telling you this is that we're starting to tick up in interest rates. ! Part of the problem is that the debt that is compounding for the US government is so out of control now that the fed is now demanding congress and senate
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tax as much as they can, anywhere they can, however they can and that's why you're seeing so many laws changed worldwide into transactions that are happening across boarders because every country is in the same situation. ! This printing of money is starting to come to route and I think you're ... if you have ... if your long complacency and short volatility, the opposite of where we are, I think you really need to check yourself because I think we're in a period now, especially 2014, 15, 16 through 20, that volatility is going to continue to explode and you're going to see longer periods of time between highs and lows versus the shorter periods where we've kind of coming off a bottom possibly right now and overall long term volatility and these are just the rst percolations. ! I am long complacency and ... or rather short complacency and long volatility here over the next few years. Are you ready for that type of change in your train? I can tell you that market prole in the Market Prole Trading Academy are tools that will help you with this. ! Nothing goes up forever and nothing goes down forever. The transitional periods are very important in the nuance to understand those are quite important. Please check yourself. Again, we are short complacency long volatility at Mistrade.info for the next few years. !

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C H A P T E R 16

Zero clutter trading method


! You know I was reading Zero clutter trading one of my favorite blogs called Zen Habits and Leo wrote recently about an idea that he's got called the zero clutter method. I thought about it and the way that my trading has proceeded over the nearly twenty plus years and how it's gone like much and many things in life it gets crowded, complicated, and then it needs to come back to simple for it to work no matter what your business is. It's no different in the cluttered lifestyle than it is in trading and so I wanted to kind of apply his zero clutter method and call it the zero clutter trading method. It's pretty simple when you think about it. ! Trading needs to be simplied and that's something that we preach here to our students @Miss Trade and one of the things that I've found over time is you really have to create a zero clutter trading zone. What I mean by that is pick a workspace, whether it's your ofce, which I'm sitting in right now. I've got a home ofce that I will utilize at various periods, but with the cloud technology that's out
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there, most of my technology has kind of the same set up. I've got multiple screens at both ofces and we really try to keep our trading style pretty simple, so pick a workspace. Use it consistently and have your routine in place before you start trading whatever it is you're going to trade. ! The other thing that I would say you need to focus on in your zero clutter trading zone is your daily narrative. Think about what you come in before the market, what you're opportunities are, where you think the value areas are, where you want to buy, where you want to sell and what it is you want to trade in that day and try to stick with that plan. You have to have that game plan. Have your charts ready. In other words have that ready before you get there. If your systems aren't ring, sometimes this happens to all traders where you can't sign in to one or more of your brokers, you're having Internet problems, have back ups. Make sure you have backups ready, whether it's a laptop and if you don't have it don't come into the game of trading, just step away for a while. ! Make sure you have your order entry, your direct order management system set up ready to go and keep it simple. That's the rst thing, have a zero clutter trading zone, a place that you go to do your work everyday and every time you step into the game. Number two clear out this zone, so only keep things around that are absolutely necessary. Again, your order entry, your brokers, your quotes, your charts, one or two simple news feeds, I've gotten rid of, again getting rid of things that just complicate the trading day. I pretty much don't look at email intraday unless there's a lull in the day. I don't look at Facebook. I don't look at LinkedIn. I really don't look at ... read news feeds. I've gotten rid of the TV. I don't have CNBC, Bloomberg in my ofce anymore. I can look at it on-line if there's something I want to research. ! Again most of the trading that happens intraday I don't need to have the news both time, price will provide me the opportunities that I need, so clear out your zone. You don't need to be reading or writing your blogs throughout the day. You can set that up. If you're a blogger, write your posts in the middle of the night and have it post during the day, but you don't need to be writing. Stay focused on the tasks. Stay focused on trading and doing. Throw everything else into a bag, into a box and remove it. Put it at your door so when you get to the door
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you take it away, give it away, give it away to your kids school, your grandkids schools. There's plenty of people that can use some of the excess technology whether it's screens, old computer boxes. I give these away, recycle them after cleaning the hard drives and giving them away all the time. ! There's plenty of people that can use the technology that you may have used as a trader that is still very good and still very usable. Place it at the door and when you get to the door take it away. Don't let it sit there. Don't let it linger. Clean up your workspace. Clear out the zone, zero clutter trading zone. Number three have places for the remainder of your things. Now listen, I went to a standup desk about eight months ago again. I traded this way back in the late nineties. I spent about ve or six years back in a sitting desk and I've gone back to a standing only desk about seven, eight months ago and it's been the best thing for my trading. It's really helped me to simplify. ! I've got a hanging box for my computer underneath. I've got a standing desk that I'm leaning on as we speak right here and I stand ten to twelve hours a day. You get used to it. Your body gets used to it. I think more clearly. Place your pens and pencils, nd as far as tools for all your things, get readers for all the blogs and things that you may want to read at night. Organize all this stuff so you don't have to go searching through multiple websites and again nd places. Have a trading log, whether it's on-line in the cloud that you're keeping track of your orders, why you bought it, how much you bought, when you bought it, what time. I like to keep track of all my trades, so when I get into the position and I want to review why I took a trade, how I took it, I lost, I won, what were the situations, what were I feeling. I lay out all those things. ! Those are the important things that you have to have places for when you come to trading. This also will allow you to focus on the day and the task at hand. Number four once you've created a zero clutter trading method and a trading zone and you've cleared out that zone, you've found places for things the number four thing is begin creating a habit. Throw out the things that don't matter to you. Don't add more things to your pile to read. You may have enough. Clear out some of the things that just don't matter. I mean does it really matter if you're a trader to continuously read Zero Hedge and all the negative articles that come
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out. Does it really matter to read the jobs that CNBC and MSNBC pump and all the other news is talking about how great everything is. Both sides have their faults. ! The bottom line is as a trader we care about time, price, and opportunity and come into the day with less noise. If you have distractions whether it's around your desk in your workspace, you're not going to be able to do well. If you're not, if you're distracted because there's something going on at home, this also carries over into the work, and your trading zone. If there's a sickness in the family, if your kid's got a special day, a wedding, a game coming up and you're only going to be able to be there for a moment don't trade, take the day off. The markets will be there the next day. Use this time, pick a day, pick a spot, the same spot every time I would recommend, have that routine because it's a comfort zone. It puts you into that mode, into that cockpit so to speak that we have here as traders. ! The next thing when you're picking up everyday again take everything that doesn't have a place and get rid of it. Take it out of your workspace. Then number ve think about expanding that zone. Maybe you can take these ideas apply them to your home ofce, apply them to areas where you're not trading necessarily, but again de-clutter your life and thanks Leo at zenhabits.net.

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C H A P T E R 17

Don't add to a losing trading position, not so fast...


! Lets talk about position sizing. A lot of traditional work that you see out there always suggests don't add to a losing position. I want to start with that thought.
Don't add to a losing trading position, not so fast...

! I agree with that in a conceptual manner. The problem I nd is most people are stuck in the mindset of a scalper, and that means you have to enter and exit almost perfectly to be successful. As a position trader, and a limit trader, which is what primarily we focus on, we look for ranges to sell into. I think this is a difcult concept for people when they go into position sizing. So, when you look to trade, whether it's the ES, or crude markets, or some of these very liquid futures markets, you want to get into a situation where you're looking for ranges, and that range may be one to three percent. It may be three to ve percent. Whatever the range may be that I'm looking to sell into, or sell below, or buy into, or buy below, I'm always doing my homework in my narrative in set54

ting up these ranges in my trading prole, my market prole that I'm interested in participating in, and stock in. ! The nuance that I want to suggest here is that I agree with the suggestion that you don't want to add to losing trades. However, I typically will leg into a trade with the biggest piece of my trade coming near where I'm ultimately maybe going to stop out. So, let's say I'm trading the NASDAQ , and I'm short three thousand up to maybe a two percent range of three thousand and sixty. I may be lightly into a trade at three thousand, knowing that I need to take some heat on that initial entry, but the bigger piece of my position may be put on near that three thousand sixty level. ! That's only a two percent nominal range, and one way to look at this is if you want to have a leg into the market, and be short just a little bit at three thousand, because I don't know if it's going to get to three thousand and sixty, but that's a range I'm interested in trading. Then I, also, have to have a foot into the market, and be participating. ! Now, in liquid markets this is not a difcult thing to get your head wrapped around, but, unfortunately, in a scalper's mentality, you start thinking, "Well, if I go full in at three thousand, I can't handle the heat up to three thousand and sixty," and that's absolutely true. So, scalper versus swing position trading are much different beasts, and you have to position yourselves. Sometimes you have to leg into a position with the biggest piece of the position being put on near the top of the range. ! That, also, means that sometimes you don't get a full position on, and guess what, that can work out just ne. Let's say in the instance I sold a little bit at three thousand. I sold a little bit more at three thousand twenty. Even a little bit further at three thousand and forty. Layering into the position, knowing that maybe my maximum size is twenty lots, so I might go two, four, six, knowing that I still have another eight lots left to sell near that top of three thousand sixty. ! When they say don't add to a losing position, consider the fact that the range that you want to enter said position is very important, and how you establish that

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range, looking at the market prole is ultimately the arbitrage that you want to look at. ! I do agree with the premise, "Don't add to a losing trader." However, there are nuances to this. You don't have to be absolutely perfect in picking entries, and or exits. ! It's the same thing really on the way out. As you step out of a trade ... on a successful trade, let's say on the NASDAQ , just like yesterday, in the situation where you are scaling into a position on a short, and you're scaling out on the position on the way down. You're taking some off as you go. All this is doing essentially is not only taking prots, but raising your ultimate average, and it allows you, again, kind of that accordion ... that inhale, exhale to manage the position kind of on a trading around a core position is what I like to call it. ! So, you may be short, but sometimes you're going against yourself, covering some down as it comes in. Waiting to sell it as it bounces again. You may be long looking to buy the dips, but selling it as it rises. This is the way that professional traders manage positions.

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C H A P T E R 18

The 7 habits of a calm trader


! Lets continue with the The 7 habits of a calm trader Zen Habits site. Leo as my guide and these points that Leo brought in as far as the habits of calmness I think can be applied to most things in life as he tries to do it. But I'm going to take them and use them for our purposes here in the trading world, because I believe and do many things that Leo talks about and he's explained it very well. Zenhabits.net, please read Leo's blog if you haven't been reading it. I've read it for years. It's a fantastic website. A lot of good things are going to be pulled out of that for traders and non-traders alike. ! The very rst habit that you really want to focus on as a successful trader is having a calm morning ritual. For me, this means doing my homework the night before, having a narrative written where I think the market could trade, the markets that I want to play in. I've done my homework and I gure out where it is that I want to play, what it is I wanted to do. Whether long or short I have conditional ideas of what I think the market may do.
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! With that calm narrative, I do a little prayer in the morning whether it's meditation, yoga that you choose. I nd that the mornings are the best time for me to get in some prayerful moments. Make that part of your routine. Number two is quite simple. Learn to watch the way that you respond to the way that you trade. Whether it's a good trade or a bad trade, what types of emotions do you go through. Acknowledge those emotions. If there are emotions of that are hurtful, angry, overwhelmed, then maybe you shouldn't trade under conditions like that. ! I talk about this all the time that when you have a good trade is equally as powerful as when you have a bad trade. Sometimes the emotions that are triggered to that response of both good and bad trades, you need to really recognize and watch and understand that you don't have to take another trade immediately after that whether good or bad to try to get even with the market or make more money and use that greed and fear to your advantage. ! Number three, don't take things personally. How this applies to the market is pretty simple. The market is not out to get you. You can have your opinions about the Fed, about the big government, about the things that are going on the market, but it is still the market that we have. It is the free market. It is the gain that we're able to play and it's always evolving and changing. Don't take anything that the market does as an upfront to anything to you personally. ! Number four, very important here, is be grateful. If you've done the rst three steps, you should come into your day and be grateful that you have the opportunity to play in the game of the market. If you're well capitalized and can play the game of trading, go ahead and play it. Be grateful for that moment. Be grateful for the fact that maybe there weren't any trades yesterday. Be grateful for the fact that maybe you had a good plan and executed it but still lost money. You need to be grateful every day when you come into this game and don't let other people be rude, condescending and those things, your kids in the background misbehaving, don't let that get to you. Again, just be grateful for everything that you have. ! Number ve, create stress coping habits. This is pretty simple. You've got to have hobbies and activities outside of the trading world. Don't get stuck locked into looking at the markets in your screens all the time. You don't need to trade
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24/7. Find a time that works for you and for your family and for your life. Get some good activities, Again, whether it's meditation, exercise, game, golf, hiking, biking, drinking lots of water, taking a walk, talking with someone that you care about and that cares about you. These are things that you need to do to create stress, releasing your stress coping situations. ! Number six, this is a very important one when we talk about trading as far as bringing calmness to your trading. Find one, two, possibly three items that you trade consistently. The way that I like to look at the market is I like to trade the nancials. I like to trade the crude products and I like to trade the green products. Within those three tasks that I look at, there's a time of day. There's a buy rhythm that each market offers for me as a trader. Make sure that when you're focused on the market, you're active in the times that are important. That could mean, the morning for the spoo's , it could mean the afternoon for oil and that could mean midmorning for the grains. But you really have to focus on one task at a time. Don't try to multitask too much. Don't get into watching the news, turn off the noise, Facebook, Instagram, Twitter while you're trading and focus on the task which is trading in the moment. ! Number seven, real simple to bringing a level of calmness to your trading as again, reduction of the noise. I got rid of the TV 2005. I've got no CNBC Bloomberg TV coming in. If I need to nd out something, I bring it in. As far as clutter in my ofce is very simple, I was standing, that's okay. I have two very large screens that I trade off of now primarily. I got a 15-inch and about a 40-inch. I would use to have 12 screens plus a TV, plus a laptop. I've really reduced the screens, the noise that is in your space. ! If you're able to do these things quite simply, you'll be a better trader. You'll trade less, you'll earn more and bring calmness to your life. Thank you Leo for pointing out these levels of calmness. I applied them to my trading and they work very well and I hope you can do the same.

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C H A P T E R 19

Do you have the stomach to trade?


! Let's talk about stomach, Do you have the stomach to trade? not six packs or beer bellies, but do you have the stomach to trade? I would say that 90 to 95 percent of people do not have the stomach or the makeup to be a successful trader. It's really the same thing I see in any game. You need to take risk when you step into this game of trading, especially in the futures side. If you don't understand that risk, you're going to get your head and your stomach handed to you. ! What do I mean by, "Do you have the stomach?" Well, once you've established some money management rules and dening your risk, whether that's 1 percent, half a percent, 5 percent, of your trading capital per trade, do you have the stomach to watch a position go against you, pushing that limit of said dened risk, and then taking that stop? Do you have the stomach to watch it get close to it, but not take you out, not be near your stop, follow your plan, and not bail out of that position early just because it's going against you?
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! In other words, what kind of poker player are you? Do you count your chips all the time? Do you know exactly how much money you have in the pot? Does it make you stressed to have money going against you, lose a couple hands, or do you stay calm, relaxed, following your plan as a player in this game of trading? That's what I mean by, "Do you have the stomach to trade?"" ! I can tell you I've"seen over the years, many people think they have the stomach, but you see very quickly the light of day and the color and the stripes of people when they have a position go against you. As a trader, and a successful trader, you will have many times in your career that a position goes against you. That does not mean that it's wrong. ! In many instances, you put on a trade, have dened a risk, the trade goes against you. You just have to have the patience and the trust and the faith and the time to follow your plan. Follow your narrative that we've talked about over the years. Follow what you think the risk is. Manage that risk; dene it; live with it, right or wrong, and move on. ! Do you have the stomach to trade? Look in the mirror. Ask yourself, "How does it feel?" when you have a trade that's going against you: 1000; 2000; 20,000. Every trader worth their salt has gone through those moments. ! Don't concern yourself with how much money you're going to make. This is not a linear game. It will go through up periods, down periods. At the end of the day, if you follow your risk management, your money management tools, playing this game can be very, very successful to people who have the stomach to trade. ! Do you have the stomach to trade? Ask yourself; be honest with yourself. Go through those feelings. I can tell you that paper trading, although it is a good tool to use to build your self-esteem and your worth as a trader, is not the same thing as having real money on the line, feeling the position going against you." ! How does it feel to have your stomach turned inside out and still keep your head sane and straight and following your plan? If you can't do that, you won't be successful in this game. !
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C H A P T E R 20

80-20 rule applied to futures trading


! Let's talk a little bit about 80-20 rule applied to futures trading applying the 80/20 rule that you hear in most businesses. I do believe that the 80/20 rule applies to the majority of businesses. Meaning 20% of your time drives 80% of your prot, 20% of your customers drives 80% of your revenue. It's generally the rule of keeping it simple with focusing on what you're good at. How does this imply in trading and setting the table to succeed in the 80/20 rule? Most of the time in trading and I've said to people, most of the time is preparing and setting the table and planning everyday in advance. What you really need to do everyday before you sit down is decide exactly how you want to behave. Are you a day trader? Are you a swing trader? Are you multi day, multi week, multi month trader? Dene that, that's essential. ! Write out your goals and your objectives before you even step into the arena. These are very important just to set the rules that you're going to play by to be successful in this game. Plan every day, every week, every month as far as you can in
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advance. What do I mean by this? Think on paper, write it down, go through the task if you will of putting your thoughts on paper and how you will behave if prices see this level on wheat. If that price you see on this level on corn if price you see this level on oil so you know how you will behave when those prices come and then you don't have to think about it. A minute that you spend planning makes the decision making process in the heat of the moment less stressful for the trader. Think about this, it will save you ve to 10 minutes when it comes to that execution point. ! If you know that you wanted to buy when you got a certain price level, have your order in there. If you know you wanted to sell, have it in there and apply that 80/20 rule. Consider the consequences of your actions when you come into the trading world. What do I mean again by this? If you take the trade, where is the risk in the trade? I always say this is really the only thing that you can effect and what I mean by that is that if you said exactly how much you want to lose on a trade, that's about all you can control. The prots will take care of themselves on the bad side. Positive or negative, in life and in work you have to consider both the risks of your moves and how it affects the rest of your business, you life, your work etcetera. ! Focus on the consequences, the risk if you and then always be practicing your A B C type trades. What do I mean by A B C? A is being your strongest ideas, B is being your next C D and the next. Some type of structure is needed for you to plan and when you're setting the table to know that you're going to allocate capital towards a higher risk trade or a lower risk trade and you need to prioritize your moves everyday, putting this down on paper, planning, these are the things that need to happen to make yourself a successful and contributing 80/20 trader.

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C H A P T E R 21

Your neighbor has no clue what trading is, stop listening


! Ive found, over the years Your neighbor has no clue what trading is, stop listening in training many types of individuals, male, female, all walks of life, from doctors to engineers to high school degreed people, to technicians, tradesmen, tradeswomen, all types of backgrounds that making a living off of prots from your activities in trading is one unlike any other profession that Ive encountered. However, there are some that I can assimilate that would be similar. Being a brain surgeon, even though I have no background in this and operating in a very micro space takes tons of preparation. Tons of background and education, time in the OR, every patient is different and its no different in trading. One of the things that I want to talk about when you get into this business of trading is dont get hung up what kind. People ask me all the time what do you do for a living? I used to say I was a trader. Now I just say Im chief cook and bottle washer. Ill make something up, because when I say trader theyll immediately
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want to pocket you into oh youre a broker, youre an analyst, youre an investment advisor. Im none of those things. Youre a day trader means most people dont even understand that being a day trader means explicitly that Im in a trade and Im out of trade within a day. There may instances where yes, sometimes I am a day trader. In most instances Im trading over a course of a number of days, weeks, months. Dont get hung up on categorizing what you do if youre going to get into this business. People, your neighbor, your Doctor, will not understand ever what trading means. Its so difcult for most people to even understand taking the rst step in this business; taking the risk in putting your own capital on the line when you get into this. Its unlike any other profession except for again, maybe some of these professions that have life and death; whether its a police ofcer or a doctor, on the line every single day. Again, trading is nothing as serious as those very admirable professions, but its one that really takes a toll on the trader at times. It takes its toll sometimes on your person, your family and you have to be able to not care and really separate your ego not only from the trade, but also from what other people think or may say about what youre doing for a career. Listen, I think there are people that make a living betting football games or just basketball games and theyre very good at. I bet you its the same way for them. They have to come into an arena and say listen how do you make your money when youre sitting down meeting a family at a social function and its very difcult to explain that yes there are people that do that for a living. Its no different in trading. Dont get hung up on categorizing what you do for a living, just do the best you can. Be successful, take care of yourself, your family rst and everything else will fall into place. Dont worry about it again. The image and what people think its generally most of the successful traders I know are not ashy. Theyre not showmen per se. Dont get hung up on this ideal or denition of what you think other people think traders should be. Be the person that is most true to yourself. Stick to your passion and if you love this game you will be successful in it.

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Dont worry, again what the outside world thinks about trading. Dont get hung up on it. It will cloud your judgment and you dont want to go there. Keep it simple, stick to what works in your business as a trader and dont drift from what works. Style drift is again a big piece of what happens. A lot of it has to do with that image that you think other people are envisioning for you as a trader. Only you can dene what trading means for you. Whether its short-term, long-term, midterm, you dene how you want to trade. Long, short, spreads, nobody else should tell you how to trade.

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C H A P T E R 22

5 ways to build and sustain high performance in trading


There are a lot of 5 ways to build and sustain high performance in trading moments in trading where ! you have a lot of time on your hands, that is both a good and a bad thing and we've touched on all of this. One of the things that I want to talk about today is how to build and sustain high performance in your trading. And really it's pretty simple, it comes down to ve basic things and we've talked about a lot of things of the course of the years. I'm going to try and capsulize what I believe are the biggest ve components that are needed. ! First and we've talked about this quite a bit is routine. When it comes to trading, you need to have a regular routine and that means getting up at the same time, that means watching the markets at the same time, that means stopping trading at the same time, it means having a style, a way to trade, a way to look for setups, basic setups. Routine is very important in this business.

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! Number two, you have to have focus. What does this mean? This does not mean you should be trading 24/7. However it does mean you should have a focus, whether it's ... your going to trade for the open market hours in the US, the Decks, the Asian, pick your focus of what markets you want to trade and when you want to trade them. It has to be very driven how you want to perform in the market. "Having that specic focus is quite important to achieving your goals. ! Next and this is where we come into play @MissTrade. Practice and by practice I don't mean just get a pretend account and fake trade and paper trade. "That is, of course, important but more important is get a mentor like myself, if it's not me then nd a mentor that works with your style again and your focus and your routine and work with somebody that can help you gain that condence with the knowledge that you are trying to build with both your routine and your focus. ! Practice is important and mentorship within that practice is key to elevating and raising your game and becoming a successful trader. ! Number four, and this is kind of tying back into the routine, exercise. You need to exercise every day. It's not my work, it's not my research but many researchers have gone out there and said, "Listen if you are out there walking, moving, stretching your muscles, it helps your cognitive skills in the business of trading and in any business for that matter." So get out there, get away from the screens, have diversions, exercise every day if you can. It's the best thing possible for you, it gets you away from driving yourself crazy and also when it comes to the market and having that high performance that is necessary in this difcult, difcult game of trading. ! Number ve, and not least important by any means is along with exercise you must rest. Do not sit in front"of the screen 24/7 everyday and spend your time looking at every tick. It really is not a healthy thing, not matter what your business. We've grown up in this society and this culture now that more is better and really less is more. "Exercise and rest, number ve are key to sustaining and building your high performance trading business. " ! That's it. Keep it pretty simple. Again, we try to keep it simple here with our education and our training. Talk to us, if you have some questions and you want a
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specic answer that we're not providing in the videos, please come us MissTrade@gmail and we do look forward to having you join us as one of our partners and we'll see you on the other side @MissTrade.

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C H A P T E R 23

Book References & Bonus Webinar


@MissTrade Recommended Book List Top of the list must read before really trading as a business: 1. Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb ($13.99 iTunes)

The list below is a small aggregate of books read over the years and contributes to the mindset of @MissTrade. LEGAL: Reading these will not necessarily contribute to anyone being a better trader, but they most likely, from experience, contribute to a better life. Read and enjoy!

2.!

The Time Keeper by Mitch Albom ($9.99 iTunes)

3.! The Inner Voice of Trading: Eliminate the Noise, and Prot from the ! ! Strategies That Are Right for You by Michael Martin ($20.49 Amazon)

4.! Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb ($12.99 iTunes)

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5.!

Liar's Poker by Michael Lewis ($10.99 iTunes)

6.! The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb ($11.99 iTunes)

7.! Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder ($49.48 Amazon)

8.! The Psychology of Trading: Tools and Techniques for Minding the Markets by Brett N. Steenbarger ($37.50 Amazon)

9.! Trading in the Zone: Master the Market with Condence, Discipline and a Winning Attitude by Mark Douglas ($31.99 iTunes)

10.! Those Guys Have All the Fun: Inside the World of ESPN by James Andrew Miller ($7.99 iTunes)

11.!

McMillan on Options by Lawrence G. McMillan ($59.99 iTunes)

12.! The Predictors: How a Band of Maverick Physicists Used Chaos Theory to Trade Their Way to a Fortune on Wall Street by Thomas A. Bass ($16.28)

13.! Pit Bull: Lessons from Wall Street's Champion Day Trader by Martin Schwartz ($14.48 Amazon)

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14.! Inside the Investor's Brain: The Power of Mind Over Money by Richard L. Peterson ($39.99 iTunes)

15.! Investing and the Irrational Mind: Rethink Risk, Outwit Optimism, and Seize Opportunities Others Miss by Robert Koppel ($19.99 iTunes)

16.! Hit and Run Trading II: Capturing Explosive Short-Term Moves in Stocks by Jeff Cooper ($48.99 iTunes)

17.!

When Supertraders Meet Kryptonite by Art Collins ($15.90 Amazon)

18.! Devil Take the Hindmost: A History of Financial Speculation by Edward Chancellor ($11.67 Amazon)

19.! When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein ($9.99 iTunes)

20.! Moneyball: The Art of Winning an Unfair Game by Michael Lewis ($11.99 iTunes)

21.! Entries & Exits: Visits to 16 Trading Rooms by Alexander Elder ($64.99 iTunes)

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22.! Bulls, Bears, and Millionaires: War Stories of the Trading Life by Robert Koppel ($7.04 Amazon)

23.! My Life as a Quant: Reections on Physics and Finance by Emanuel Derman ($11.99 iTunes)

24.!

Day Trade Futures Online by Larry R. Williams ($30.06 Amazon)

25.! Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions by Ben Mezrich ($11.36 Amazon)

BONUS WEBINAR
LINK Presentation by Steve Ribble

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