Month: June 2016

Long Term Conviction

Posted on by Anatoliy Schneider

There are many differences in our approach to short term and long term trading.

When trading short term you can start your day 3-4 hours before the start of the trading session, do your analysis, check the calendar, prepare the trading plan for this session and then follow it. You are only interested what the Market will do in the next couple hours so you only need to remain confident in your plan for this short period of time.

If you are not seeing the Market well today or just not feeling particularly well, you can simply skip the trading session and start over the next day – one trading session is not that different from another, so you will not miss much.

The main difficulty in long term trading is that we are preparing the trading plan for coming weeks and months and the trick is to maintain your conviction in this plan over a long period of time. No matter what the Market will do today it can hardly cancel your long term trading plan. It will gradually update your view with new information and it is up to you to keep the original scenario in your consciousness throughout many weeks until it plays out or is canceled.

How many times I would prepare the plan – a result of careful analysis over many days – just to find myself losing confidence in it over the next couple days. The Market does not cancel my scenario per se, it is just not confirming it yet, and yet sometimes it is easy to lose the sight of the big picture over the course of a couple days.

Two trading styles cannot be compared in terms of being better or worse – they are just different. Interestingly enough, they are not so different in their technical approach – the analysis methods and price action patterns can be very similar. Their main difference lies in psychological demands.

Long and Short term trading will affect our lifestyle differently, require our attention span to be very different and will present us with different psychological challenges every single day.

Relax

Posted on by Anatoliy Schneider

The Market can do nothing to hurt you, nothing can cause any damage to your reality, so why is it that we find it hard to just relax? How much easier our job would be if we would follow the Market, instead of following our thoughts about the Market?

The reality of the Market can never do anything that would cause you stress. Only your interpretation of the Market – your thoughts about it – cause emotions and prevent you from being detached.

Yes, it is important to have a trading system – a framework inside of which you view the Market. A trading system will cause you to interpret Market’s actions, so it must be constructed in a way that avoids all inner conflict. However, if you are unaware of your thinking, even the best trading system will fail because you will not be able to follow it precisely. You will never notice when faulty thinking enters your mind and causes you to choose incorrect interpretation of the information Market puts in front of you.

Until we learn to just relax and listen to what’s going on inside, there is no point to try building a trading system. The conflict our unconscious mind tries to hide will be projected into our trading and ensure our failure.