Brandon Wendell, CMT
Brandon Wendell
When we are putting our money at risk in the financial markets it is easy to get nervous and excited. These common emotions can wreak havoc on our trading accounts if not put into check. I was reminded of this while teaching an Extended Learning Track course online recently and thought of the huge benefits of trading with a community of traders rather than alone.
In the class, we set up an intraday trade in the S&P 500 E-Mini futures. According to the trading plan, I calmly analyzed the trend and the locations of the supply and demand zones. I then evaluated the zones to see if there was a high-quality trading opportunity. Once I decided to take the trade, I planned out the exact entry, target and stop levels. I even talked the students through the strategies I would use for protecting profits by moving the stop to breakeven and also trailing. Finally, I set the orders into the computer and watched as my trade played out.
The comment that stood out the most to me was when a student said, ‘It is so calming trading with you.’
Trading, when done correctly, should be a boring, methodical process. Fear and other emotions arise from the unknown. By planning your trades and executing the trade according to that plan, you should have nothing to fear as you already know the maximum amount of loss you could receive and even the potential gains from the trade.
Many newer traders are not as confident in their trading abilities. They may have mixed results in picking quality supply or demand as they gain experience. Another reason why some students have problems with fear is improper planning for their trades. So, what is the solution for this problem? Trading in a group environment is a great way to get these fears under control while you hone your trading skills.
The Extended Learning Tracks (XLT) offer traders the ability to view professional traders employing the same tactics that they also use. The added benefit of the XLT is that you are trading with many other students who are experiencing the same issues and successes you are also enjoying. This becomes a support group and can greatly reduce the apprehension you feel while trading in isolation.
People often ask me why is it that I teach trading when I can obviously make a living just trading for myself. While it is true that there is a great feeling that comes from helping students become successful traders and achieve their goals, that is not my only motivator. I also need the accountability of others trading with me to maintain my own personal discipline in trading.
It is easy to stray from the path to trading success and become impulsive. Impulsive trading: not planning trades, chasing price, using mental stops, is a road to trading ruin. Even when I am not trading in front of students, I still ask myself, ‘Would I want my students to see this trade?’
To keep yourself in check, you can ask yourself on every trade, ‘Would I want to share this trade with my instructor or fellow traders?’ In fact, you can even share your trades to get input on your progress. The XLT programs also feature special Student Trade Review days where the instructor and class examine other students’ trades and help each other learn what to do and what to avoid in trading.
Calm down! Relax and plan your trades. Join a community to trade with a peer group instead of alone. You may just find the calming effect therapeutic for yourself.
Read the original article here - Keep Calm and Trade On
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Neither Freedom Management Partners nor any of its personnel are registered broker-dealers or investment advisers. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk. Also, Freedom Management Partners’ personnel are not subject to trading restrictions. I and others at Freedom Management Partners could have a position in a security or initiate a position in a security at any time.
Editors’ Picks
EUR/USD hovers around nine-day EMA above 1.1800
EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.
GBP/USD holds medium-term bullish bias above 1.3600
The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.
USD/JPY drops back below 157.00 on Japan's verbal intervention
USD/JPY has come under moderate selling pressure below 157.00 in the Asian session on Monday. The Japanese Yen lost ground to near 157.70 following Japan’s ruling Liberal Democratic Party's outright majority win in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi. However, JPY buyers jumped back and dragged the pair southward on FX verbal intervention by Japan’s Finance Minister Katayama.
Editors’ Picks
EUR/USD hovers around nine-day EMA above 1.1800
EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.
Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand
Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.
GBP/USD holds medium-term bullish bias above 1.3600
The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.
Bitcoin, Ethereum and Ripple consolidate after massive sell-off
Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels.
Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle
Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.
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