This past Sunday, Norman gave us Part 1 of "Becoming a Full Time Trader" and many of you enjoyed it, and helped with other Trader's Blog readers' comments, questions, and needs. We hope you'll enjoy Part 2 of Norman's series just as much. He as also just recorded a few 3 minute audio nuggets about trading discipline, which you can check out here.
Consider the following: if a trader is successful 65% of the time with an average profit of 6% per trade and losing trades are stopped out at 5% loss, then over 100 trades, there would be a cumulative annualized gain of over 26%. Real dollars would, of course, depend on the value of each trade. Another way to look at
it is if a trader averages just a 3% profit margin each month that translates into an annualized 36%.
Many of you know about Norman Hallett from TheDisciplinedTrader.com, and if you don't you should! Today I've asked Norman to bring us some of his wisdom and insight when it comes to being a full time trader. Norman's been a full time trader, then managed a room of full time traders, so he knows what it takes to be one...and be a successful one! Please enjoy his article today and visit TheDisciplinedTrader.com for a special free copy of his book "Taming Risk", enjoy the article.
People fantasize about what it must be like to be a full-time trader. The picture is of a relaxed person sitting in a lounge chair on the foredeck of an expensive yacht docked in Newport Beach or somewhere in the Mediterranean. Armed with a laptop, a cell phone and a large pitcher of rum and chilled grapefruit, the trader (who looks remarkably like a buffed version of you) scans a graph that pops up on the screen. The trader then activates the cell phone and places an order. The cell phone is snapped shut followed by the laptop. The trader stands up, stretches and dives off the side of the yacht into clear warm water. Come to think of it, the yacht is in anchored in a beautiful inlet off Tortola. The water is warmer there.
The implications are clear: easy money, independence and unlimited wealth.
Today's Guest blogger is Norman Hallett from The Disciplined Trader, and today he's challenged us to answer two very tough questions that ALL traders should sit down and think about. They have to do with our mental approach and Norman's one of the best at helping traders.
These are the first two questions of a 10 question quiz. If you want to see where you stand as a disciplined trader (or lack of it!) then take the whole 10-question quiz. It won't take much time and it's free. He's looking forward to your answers and comments!
The following 2 questions will conjure up different visions for each person. The idea is to relate to certain trading experiences and what actually happened in such situations-not what sounds like the best answer. Moreover, if a described situation has not yet been experienced, try to make an honest appraisal of how you would act. Again, not what sounds correct but how you think you would actually correct. Remember, being a successful trader requires continuous and almost brutal self-appraisal.
There are no “perfectly disciplined” traders. But there are many traders who come close. This quiz is meant to help you assess where you are in your quest to be The Disciplined Trader and help you to identify areas that you may want to improve upon… because the way to maximize your potential as a trader is BE The Disciplined Trader, and adhere to your tested trading plan without hesitation.
The following are the first 2 questions (and answers).
Yesterday Norman brought us a guest blog post that I think most everyone that read it enjoyed (re-read here) and I've asked him back to teach us a little about the mental aspect of being a successful trader. We know it's more then just picking winners, but Norman also lays out 7 other crucial steps that you should follow. Also his 71 page ebook has been read by over 25,000 traders just like you, and you don't want to be the only one without his free teachings. Grab his 71 page ebook, enjoy the article, and comment, THANKS!
Many investors take actions that aren’t in their best self-interest. They make irrational trades; they trade based on emotion, rather than logic; they hold on to a losing position due to their unwillingness to admit they made a bad trade; they trade based on greed or panic… the list is endless.
Successful traders, on the other hand, all have a few things in common. Developing these characteristics and habits will help make you a successful trader. 1) Successful Traders Set Goals
As many of you know we here at INO are huge Norman Hallett fans. He's been a featured guest blogger here many times (see previous posts) and today I asked him to give us an exclusive preview to his new book, "Taming Risk - A trader's guide". His post below covers Systemic Risk and the VIX. This information is extremely helpful so be sure and read on! Also for the next day or two only, he's allowing complimentary downloads of the complete book. I have read the ebook (2 days ago actually) and I can honestly say you WILL learn something that you didn't know before about risk and money management. So enjoy Norman's kindness and enjoy the special INO members only message where you can download the full book! Oh yeah comment...he wants to hear from you.
Sentiment is emotion. In regards to how the entire investing public feels about the market can be measured in many ways and the market indices are good general objective measures of how investors and traders feel about the systematic risk in the markets.
One of the more popular measures of sentiment and systemic risk is the VIX...