Your Personal Trading Environment

II. Your Personal Trading Environment

Forget all the psychological self-help books for Traders: Here are five easy rules.

1. You have to have a strong support structure/environment. This environment includes the office where you work as well as your home. Regarding the latter, to have the faith of your spouse, family and friends through thick and thin cannot be underestimated. To be in contact with naysayers leads to failure. If you happen to ever watch any award ceremonies all the recipients thank the people around them for their support. You don’t need some in depth, self help psychology book to become a better trader.
2. Live a balanced life. The job of trading is always going to test your mental and emotional resilience. It is going to bring out the worst in you. The market can create doubts in you. It will frustrate you and humble you in unimaginable ways. If you do not have emotional stability trading will certainly not be the antidote.
3. You really need to enjoy the whole process of trading. You need to enjoy the statistics, objective critical thinking, evaluating, challenging yourself on a daily basis and construct a portfolio.

Lastly, there are two types of traders. Ones that are rich and ones those are not. The ones that are rich, or at least think like they are rich, have a much better chance at succeeding in trading. Alternately, the trader who is not rich, but wants to be rich is taking a bigger risk, by nature. I am in no way saying that it can’t be done, it can, but know who you are and what you are trying to achieve.

The whole exercise in trading the futures is the control of risk. There is no costless lunch. To control risk you have to structure a diversified portfolio just like you would manage a good baseball team or any other team sport that you can think of. On your team you need to have a home run hitter but they strike out a lot, you also need a player that can hit for a high percent accuracy, you need the kind of player that can hit the ball with men on base to score some runs. Putting together a portfolio is like putting together a “fantasy base ball team”. You have to be able to have players that provide great defense and so on.

Successful traits of others,

• Mechanical trading models were used my many of the most successful.

• They all used clearly defined systems and stuck to their rules.

• Many of them back tested their ideas before implementing them in the real market.

• Most of them surrounded themselves with exceptional people who had the expertise they needed.

• Many of them paper trade to avoide losing money for the first few years before hitting their stride.

• Each trading system they use they understand and its styke fits their personality.

Common Personality Traits

• Low Emotional Reactivity, Staying calm; experiencing neither major highs nor lows.

• Detached, Understanding the market does what it does that they have no control over it.

• Humble, With little ego they have no challenge taking losses or letting profits run.

• Decisive, They reach decisions quickly and take action without second guessing.

• Conscientious, Self-controlled, disciplined, consistent, and plan-driven, they persevere.

• Confident, They have faith in their system and their ability to implement it.