Trade Psychology and Effective Journaling

okay folks welcome back this teaching is going to be specifically dealing with trade psychology and affective journaling okay trade psychology ineffective journaling the points of focus in this module major psychological barriers and my personal opinion in solutions for overcoming them and effective journaling how journaling can assist your development okay so major psychological barriers the first on our list is the fear of missing moves I believe this personally is rooted in not fully understanding what your setup is now you see this glibly tossed about in seminars webinars videos whatever it is folks that are teaching today many of them aren't even you know qualified to be in the role of a teacher in my opinion but we'll leave that for another discussion the fear of missing moves is rooted in your unique setup now every trader is gonna have their specific setup it may or may not have an indicator I personally don't believe that indicators should be a part of your trading but that's just my personal taste my faith in price action is sufficient enough but if you have a tool if you have a method if you will that relies on an indicator to give you that buy or sell decision for you then whatever it is you need to stick with it and know that that's the one you're going to trade if you have defined that setup in a written form in other words a trading plan you're not going to have many times that same feeling a neophyte trader or a lesser organised trader would have now it doesn't mean that we're going to be profitable it just means that we're not going to be fearing missing a move because once you understand this setup the setup should be directly linked to time and price there should be a time when this setup forms and there should be a consistency to it if your pattern doesn't have that and it's rather ambiguous or untimely you don't know when it's going to happen then you probably don't have a valid set up and you're gonna have hit and miss results and when it wins you're going to falsely attributed to your setup when it's really just randomness so to overcome fear of missing moves is obviously to have a well-defined plan and what your setup is knowing it intimately will keep you far less anxious about missing a move because you'll know when they're most likely going to form this is why I use kill zones this time element of the trading day I know what I'm looking for I know my setup and if I know what time it should occur I know when what days of the week it should form and I know it should be either a bullish model or bearish model I'm not anxious about missing a move even if I do miss that trade I know when the next one's going to form most neophyte or novice traders do not have that luxury they're on the seat of their pants all the time not knowing when it's going to happen or what it is it's supposed to happen at all for them to take a trade fear of losing well this one's going to have you looking for systems to have high accuracy and there's not a real need for high accuracy it's wonderful to have it but the fear of losing comes by not having a plan and if you don't have a plan if you don't have a method that seemed consistency in hindsight and back testing and then walk forward with it seeing it working and in having momentary lapses of accuracy you will not have the wherewithal that's necessary to do what is necessary as a trader that means embrace uncertainty the ability to do this is not going to be for everyone and there's going to be a fine line between those individuals that hit this wall that every one of us will hit and we had to determine for ourselves if this is really right for us and for some of you it isn't no one's gonna be able to make a decision before you but it's important that you understand that there is always that element if you're a new developing trader and you're unproven it may be that trading isn't for you you would have to more or less rely on someone else to do the trading for you or don't rate it at all but if you're gonna trade you can't fear taking a loss fearing a loss is many times directly linked to over leveraging and/or over trading both of those two elements are very easily fixed lower your leverage and you won't be so fearful about taking a loss because it won't hurt you so many times in a row if you have a losing streak if you slow your frequency down in terms of your over trading again even if you're not trading a high accuracy method or setup the high frequency won't be quickly eroding your equity very simple solutions to an otherwise rather routine problem that comes up in many traders impatience between setups this is going to come by way of infancy as a trader especially if you have a setup that is profitable and you can be well organized you could have a well-groomed money management strategy and you know what your setup is but you're impatient and waiting for it or you see the setup forming but you're trying to get in just before you're really supposed to in other words you're looking for a specific level you're looking the 50 level to be buying it and it's flirting with 65 and you just can't stand it he's got to get in that's going to be dealt with over time and forging discipline by following the rules in your method the problem is is you don't have the time killing it enough in the experience trading to know what this is going to require of you and you're going to have many times previous exposure either by demo preferably or if you eventually go into live trading which I don't ever try to tell anybody to do that because it's a decision you're gonna make on your own if you ever do it at all but if you find success that feeling or that rush you get when you make a profitable decision you want to have it right away as quickly as possible and many times immediately as soon as you close the trade or it hit your limit order and you're out with a profit another demo or live worst-case scenario it's alive you're going to want to go right back in again and you're going to jump in before your setups you're going to take things that aren't necessarily aren't your setups and I can tell you as a commodity trader when I had initial luck back in the early 90s I would have an idea what I wanted to trade but I would also feel that impulse to want to get back in and be a winner again so I would look at the market and say okay well that's not my setup but I still think it's gonna go up and I would buy it I had no idea what I was doing but I still sir come to that impulse that hey look you know I need to be doing something cuz I'm sitting in from the charts and I want to feel good again so let me roll the dice and see what happens that impatience comes by way of your infancy and your lack of experience experience is going to teach you one of two things one that losing sucks and it's better that you tried not to lose too much when you do lose or experience it's gonna teach you that you're not perfect so therefore you have to wait for the best scenarios for your quote unquote luck to be in favor we don't know if our setups going to be accurate but we also don't know if our cells are going to come when we are expecting them to so forcing it or jumping ahead and more or less anticipating the setup whereas we're interested in next move in price that's what trading is it's a statistical guess now with that there's a measure of uncertainty and that uncertainty and the weighting side of trading it's just like a Water Torture okay it's you can't stand it especially if you're sitting in from the charts you just want to get into getting a trade already and accept the wider risk if you need it and that's wrong you don't want to do that demand your price demand your setup and by doing so you'll combat that impatience that resides between setups that novice traders always feel fear of not being good enough well this is a byproduct of being on social media everyone's gonna be better than the next guy or they're gonna be trained by the person that's leading the pack or they themselves are you know the rock star if you are not equipped to handle the tomfoolery that takes place on social media like Facebook and Twitter and Instagram it's probably better for you not to be on it now I understand that I have a online presence on Twitter and I have a Facebook and I have a YouTube channel but I have a thick skin and I like to engage other traders because I like the feedback I like to see what their responses will be and I just like the engage so if you are quickly feeling like you are not sufficient or your learning speed is not up to snuff in terms of what you've seen other people and many times what you see online they're lying anyway they may say they have their things together they're all you know completely figured it all out in terms of what they're doing many times the ones that are saying that aren't really as astute as they claim to be and they're trying to fake it until they make it so don't let it wear on you to too much or make you feel like you're insignificant in terms of where you're at in your development because your report card on your own results as you'll hear me refer to in the journaling section of this video that's the only opinion that matters it's not mine or anyone elses that matters it's are you seeing development progress and by measuring that and by keeping tabs in that in terms of your journal that's the scorecard that really matters and obviously knew your bottom the bottom line that's the one that really makes the case for whether or not you're developing so fear of not being good enough is simply a game that's between your ears it's all a trap so don't think about being on social media don't engage other people because if you're developing sure the worst thing you can do for you men is to go into this armwrestling match about you know what's better who's better how much is you know a good amount and what you should be making in terms of pips all that stuff is the goes back to the proverbial measuring contest you know who's the bigger man and it's not about who's the bigger man it's about surviving long enough so that way you can appreciate and develop as a traitor fear of losing streaks and drawdown well this is going to be directly related to money management and if you're afraid of taking losses in any set or series and or fear drawdown it's because you have no process or protocol in place or what you would reach for should you have a loss or a losing streak develop I've given you a teaching to help you flatline your your losses that way it removes the effects of drawdown in your losing trades and by implementing something as simple as that quickly changes your perspective on fear and anxiety about taking losses or a single string of losses lack of discipline and following roles well it's in our nature to be human and I've said this many times if the sign says don't walk on the grass your first impulse is gonna be what I'm gonna tap-dance all over that look just like your children you know god bless them you know I have four boys and I have literally watched them do these very same things that they should know not to do but they still do it well with an account with money or a demo we do those same things we know we shouldn't be doing something but because there's an opportunity to do it and there's really no one keeping you from doing it you end up doing it as soon as you into the trade or mess around with your trade like you shouldn't as soon as you do it that little voice in your head says I should not be doing this or don't do this but you ignore it you want to see what's gonna happen and if you want to experiments okay do it somewhere else not in the marketplace but you have to have discipline and you have to have rules and when those rules are made you have to stick to them do not deviate from them and over time this Forge is discipline and it'll also serve you well because you're going to have periods of drawdown you're going to have periods of losing trades and if you don't have the discipline to stick to doing the very things that will eventually lead to longevity in this business you're not gonna fare well so discipline comes by forcing yourself to follow a set of rules and those rules have to be rigid they have to be concise detailed and not ambiguous they're very binary in the sense that you do this or you do that or you do nothing at all and they have to be three conditions for every decision-making process either it's a go it's a no or you sit still and you don't do anything searching for the next best thing I think this is one of the biggest problems if you just look at Twitter whoever is hot right now whoever's got the most attention by everyone that's where everyone's gonna flock okay and it's always been like that not just in trading but in anything okay whoever's barking loudest draws the biggest crowd now whether or not they have anything to say once the crowd gets there that remains to be seen but you can see how folks that are in love with one concept or one guru or method this month will change teams and go somewhere else in the thought process thinking that this is the better way of doing it or this is something different in it's an amplification of something and I have learned that there's nothing really better for me as a trader so therefore I don't look anymore I know everything I need to know in terms of price action the open high low and close tells me everything I need there isn't anything out there that entices me personally and like the Bible said there's nothing new Under the Sun so if I have arrived at something that makes sense for me even if it's not perfect I don't need perfect but I know I have a statistical edge in the things that I do they're highly accurate they're very precise and they're time-based I know when my setup is going to form you if you were able to pull the majority of individuals that were trading any asset class if they could set a time on when their next I was gonna be Dober 90% would say I don't think so I don't think I could do that that's why trading is uncertain to me it's not because I know what time they certain things should happen I know what days of the week certain things should happen so therefore I'm not anxious about women next so it's going to be I don't care about missing a move in fact it's fruitful for you to take vacation time scheduled time away from the marketplace and do that and I would suggest to do that even more so if you're hot right now if you're really really well best thing you can do is forge development in terms of your discipline and also your experience force yourself as FK I'm taking a break now I've been killing it I got 25 winning trades in a row or whatever it would be I'm gonna stop trading it'll take a week off don't even look at the marketplace you're gonna want to look at it but don't by doing that you're gonna prove yourself there's nothing better than the thing you're doing right now because you understand it doesn't have to be my material if you found something in another discipline that you've really gravitated towards and it made sense for you to use it great that's awesome that's all it matters is that you find something that you can make a wager on and then wager that with sound money management because ultimately no matter whether we're talking about order blocks or ICT breakers or anything else that's out there none of that stuff really makes price move and we can't control price once we're in the trade once we're in the market all of the control the steering wheel is not ours now the markets driving what we're going to see in terms of profit or loss so understanding that everyone's gonna have losing trades and the first thing that happens is folks that go through a losing streak and the experienced drawdown then they show their lack of discipline and following rules so they think there's something better out there okay something easy or something that doesn't have losing streaks everything has losing streaks folks believe me everything does no one stays hot or the top forever and there's always going to be some measure or drawdown and whatever system or method you're using so the best thing you can do is find something that works enough time to warrant investigation and stick with it you sound money management and you can turn it into something really impressive and you may in surprise yourself okay effective journaling about doing journals every single day I make a journal entry in my personal journals at the end of the week usually it's on a Saturday I do a weekly vlog in my personal performance and what I have seen happen in the previous week more or less I'm reviewing the total weeks range I do this on the two pairs that I trade which is predominantly the euro dollar and the cable pound dollar I don't do a lot of trading in a lot of other payers if I want to be a deviant I will trade sometimes the Canadian dollar or the Aussie dollar but generally that's about it I don't like to do anything more than that and the reason why is because I actually spent a lot of time planning and investigating certain setups and things I'm looking at and I want to go through that time and use that time the most economical way I can and I don't want to be doing that with 28 pairs so if I'm going to put the time into doing a sound top-down analysis and/or review of my own setups if I'm following 28 pairs can you realistically do that every single day you're never gonna have any time to do anything else so I have a life to live and I can find all the setups I'll ever want to find in these two pairs in fact I could just trade one but because they're closely correlated and it fits my model as far as a short-term and day trader I look at both euro dollar and cable and if I want to find something else that may or may not have a set up in a cable or fiber then I'll trade like I said the loonie or the Aussie but I tried to make a daily entry whether I take a trade or not and I give myself an opportunity to stay in a routine but every single week I'm doing a complete review of the weekly performance as my trader half of me has performed and then the analyst half of me so I'm always giving a voice to the two people that reside in me just like you oh you all are going to be looked at internally as a traitor but there's actually an analyst inside of you too and there's also a gambler so you have to figure out who's in control at the time when you're doing the trading and many times you don't see it before you do into the trade you always see it after the trade ok the ones that paint out really really well and you're not feeling a lot of exposure to uncertainty or fear and anxiety generally you're gonna find that that's going to be the analyst because they're focusing on the numbers and they're not really worried about it the person that finds themselves excited about the results many times no they're good or I guess the adverse side of things they're weighing things in terms of the outcome that's the trader and then you have the gambler where they're impulsive they're doing things that are undisciplined and they're pushing more leverage than they should that's the one you want to keep your eye on ok the gambler is going to get you in trouble the trader will take care of himself because the analyst will speak to that side of you to your conscience but you want to reside in the mindset of the analyst sticking to what you see in the chart sticking to what your process is your your model ok the analyst is what's going to keep you on the right path that formation that makes a trader is it's made up of three people but you're all the same person the analyst generally they're the ones that are most sober minded the trader is the one that wants the opportunity and the right or wrong measurement but then you have the gambler who wants the thrill of it all and it's also going to be the person that takes the hardest in terms of the grief that comes when there's a losing trade and that part of you is gonna always be negative it's going to be well it's not my fault it's something else that call that the gambler is only gonna be worrying about when it was right and when they made money or when you made money when it was in your favor that's when you want consider it but when it isn't making money for you the gamblers gonna cry it's gonna manifest itself into a spoiled perspective toxic thinking so you kind of like want to keep that side of you on a short leash and you don't want to allow it to manifest itself in your journaling how you felt going into the trading day is really important there were times in my life as a trader that my oldest son would have to go into surgery and I wish I would have stayed out of the market those days because I was already anxious I was already nervous about the outcome of the surgery so those are days that I wish I would have had the discipline to not trade but because I was feeling anxious and helpless because I couldn't do anything to fix my son's ailment I would try to satisfy my anxiety by having a win because even if I made a hundred bucks doing something in the marketplace it would keep me distracted from what I was feeling in my personal life so you're gonna see that you're losing trades are going to be directly related to things that are going on in your personal life and the only way you're gonna see that trend or that truism is if you go through your journal and you index all of your trades based on a negative mindset or if you're sick if you're physically ill probably not a good idea to trade if you have a migraine like I have migraine sometimes and I have made the mistake of sometimes still time to take control of her because there's nothing worse than feeling like your head's gonna explode and I already have sensitive eyes so I can't look at the chart long to follow out what is the best procedure for me right now should I stick with the trade should I move my stuff should I do anything with it when it would be better for me just to not to be in it at all and just relax and go to a quiet dark place and Allisyn just relax and let my migraine take care of itself so how you feel okay and this is not only physically but how you feel emotionally did you just have a death in the family we're seeing in the world you can do is medicate yourself by rolling the dice you know you just have loss in your family or you and your spouse you're separating god forbid or something terrible happens okay you don't want to open yourself up to gambling okay because that's what's going to become in those environments you want to be relaxed you want to have a neutral mindset going in you want to feel healthy it's why it's important to have a good exercise program good healthy diet and staying active and stretching out and giving yourself hobbies outside of trading because you want to have a fresh perspective you want to have a alert mind you want to have a healthy fed body going into the marketplace with a sickly unrest 'add which I didn't enter me for but sleep is important you need to have it especially if you have jobs and businesses you need to recuperate I've been blessed and I have to need those things because I'm home most of the time doing whatever I want to do so sleep for me isn't as needed versus someone that has a business and you know doing all these things or has a job and they have to commute I mean commuting alone okay if you're rushing home from your job you know and you had a bad experience on the road you're angry so what are you gonna do you're gonna want to take it out on the marketplace you're you're upset so you're looking to have that replaced by some kind of a feel-good feeling and what better feeling is there is to make money okay it's like there's a lottery so you're gonna do things that you shouldn't do because you're acting impulsively because of the way you feel so it's important that you always be honest with yourself when you journal I always give myself an opportunity to debrief okay and also release those things and it's almost therapeutic because you know what you're doing is the wrong thing when you do it and you're acting impulsively because you want to have a different feeling than whatever it is that's bothering you okay if you're stressed if you're worried if you're angry you just want to replace that with something okay and since we're traders we can clearly see that there is a reason to expect a market to go up or down so all we have to do is roll the dice and just gamble and see what's gonna happen and our attention will be diverted from whatever the things that we are stressing over or anxious about or mad about or sad about or fearful of all those stimuli will be replaced by I'm in a trade and I made the mistake of doing that as a young man and it filled my head up with all the wrong things as a trader so the way you want to avoid that is be sober-minded going into the trade and also know what it is you're feeling at the end of the day when you're done trading you want to put that into word and write it out and be honest not if you know you were angry at your spouse or if you angry at your your child or if you're worried about something that's taking place if you have a job you're if you're anxious about losing your job or if you're angry that someone else got a promotion that you didn't get okay make sure that you do that in your journal by allowing it to come out because if you don't release it and put it in your journal where you can see it in text read it and release it if you don't do that you're gonna harbor it and it's going to become cancerous to you as a trader it's going to infect your mind it's going to infect your your performance and it's not going to always be what you want okay it's going to be many times the opposite of what you're expecting it's going to have an adverse effect on your overall development anyone record any of your concerns or fears that you had while you're watching price action so if you're in a trade or not in the trade whenever you feel a sense of anxiousness or not trusting to set up the our beautiful opportunities for you to learn because that's when you want to be doing screen captures okay if you're in front of the charge you have the luxury of being able to do that screen capture that very moment and then in your chart you want to make a notation of what you're feeling and what you're thinking at that time you may be feeling that it's getting go up but it's retraced a little bit deeper than you thought and you're starting to have anxiety about it it may not pan out that's a time when you want to screen capture and make that notation and log that keep that as part of your journal entry each time you do this you're gonna find that you're gonna find less sensitivity or emotional attachment to these ideas because you've been there before and yes you see that there may be a opportunity for the trade this you know to fail and hit your stop-loss but if you stick with it how many times did it really actually go there and that's the benefit of keeping a journal because unless you write the things down and keep a journal of what the charge looks like and what you were thinking you're never going to remember them you're gonna remember that really good trade and you're gonna try to forget with all of your energy and effort a night to forget those trades that you should have never been in you knew you were getting into it and you should have never done it and now you're gonna do your best to try to avoid it and and forget that ever happened and they're your lessons that see what you want to learn from so journaling is absolutely crucial to your development as a trader especially if you want to be organized and you want to be collective and calm about what you're doing that only comes by doing this exercise here journaling every professional whether it be a doctor or a lawyer physician psychologist long and short is is they keep good records about what they say what they have done they do not want to rely on their memory and you can't rely on your memory you're gonna forget things okay every 7 years your brain breaks off this little nodule okay and part of that you lose memory so it's important to keep a record of things that you've said and done because when you have these adverse times in the future as a trader because you're going to you want to go back and reflect on those times too you forgot how you've been through that before and what you did to go through it's important contrast your personal expectations of what you thought was going to happen in the marketplace and how you were going to do versus the actual result this is where you get to be more or less than the scorekeeper you're able to soberly and balanced give a an opinion about what you did in terms of your analysis going into the day for the week and then what actually happened now you're not in this section of journaling to beat yourself up that's not what this is but what you're trying to do is highlight the things that you missed but you don't want to draw so much attention to it that it seems like you're writing you know a suicide letter like you know I'm no good um this or that what you want to be doing is is highlighting the opportunities for you to develop the better or spend more time focusing on in your weaknesses because that's what journaling helps you do it identifies your weaknesses you if you were too honest with yourself you probably would have about ten things that you could list as a weakness but you're probably gonna have four to five times more than that that you won't really readily discover until you go through the journaling process and it's not something you do for a short term and then you abandon it you always do this I've been doing it for 25 years and I did journaling before that and other things in my life so to me it's it's something I've always done and you don't need to spend a whole lot of time doing it but I've always made a reference to what I've done or said in the previous day at the end of the day in other words I'm looking back in reflection otherwise if I try to go to bed my mind will not allow me to because my mind's gonna race I should write this down in many times I have tried to go to bed even after journaling and I have something on my mind I can't do it until I get up and I write that down on my journal because then it's I've released it and the only way you're going to trade with a emotion free or as close as you and a well-balanced mine is to have a clear conscience anything that's bothering you you release it into your journal your journals not gonna call you a name it's not gonna say it wants a divorce it's not gonna say you don't love me enough or you don't spend time with me enough okay it's only gonna say what you write in it so when you go back to it it's going to say the words that you put in so it's important to what you put in it is gonna benefit you but you're not sure coding it either so you want to be honest about your evaluation about what you did or thought going into the day or the week and then what the actual results were keep it simple all you're doing is this is what I thought and this is what actually happened you're not using adjectives you're just stating the facts this is what I thought was going to happen I thought I was gonna go here I thought was gonna have this effect I was going to move this much and this is what the actual result was and you're not adding anything to it or attaching any emotionalism to it okay you want to detail where you felt uncertainty and this is important how you actually coped with it you're gonna find that many of your coping skills for stress aren't really coping skills they're actually feeding that emotional stimuli and it creates even more stress the only way you're gonna find that is by actually recording it writing it down and you may be in a trade and it may be flirting with your limit order and you've already had your profits taken for the most part scaled out your stop-loss is child up now but now you're feeling like it's going you hit your stop and you know I'm gonna get that last piece of the move what are you doing to cope with that are you staring at the chart screaming or are you taking a walk or are you turning the computer off and then saying I'm gonna see what happens at the end of the day you know come hell or high water it's gonna take my stop or it's gonna take my limit or it's gonna trade sideways until the next session and then whatever it's gonna happen is gonna happen whatever that coping mechanism is that you used for that stress trigger you want to include that because it's important the ones that do not work you're gonna see in that way when you start feeling that stress trigger come up you immediately discount that felt process to follow that same regimen again if it's something that hasn't worked in the past and it's maintained a stressful level and you know you're wanting to think about it or do that same thing again like smoke cigarettes okay or grab a drink that's alcoholic those things you may feel like they're soothing you but actually they're not so what you wanna be doing is focusing on when the coping mechanism that you've used to get through that stressful environment when it helps you it's highlighted on an opportunity for you to use that in the future and here's the thing many times I've learned coping skills that were in high stressful events through trading when I had stressful events and my personal life I used those same coping skills so for instance you know while I'm trading I usually have a deck of cards in my hands I'm a fidgeter okay and now they have these things called these fidget spinners which I had loved them I absolutely loved them for me it keeps me distracted from worrying about what next moves gonna be in price I'm allowing my method to pan out and do what it's gonna do before I did that I used to have a coin I'd always keep a coin in my hand and I'd either roll it through my fingers or I would just keep it pressed in my palm and I would just practice palming okay because I've some of them amateur magician nonetheless I would do those things to keep me distracted and not being hypersensitive to every fluctuation in the marketplace so whatever the coping skills are okay that you find work in high stressful environment of trading I found that they were they were just as equally effective in high stressful environments like when my son was in surgery you know I would take it to cards and I would fidget with those or I would have coin in my hand and it would just keep me distracted enough where I had to go through that experience I couldn't escape it just like you can't escape the trade unless you just kill it if you're going to take the trade you have to through the trade either it takes your stop or it takes your limit but you have to submit to that so whatever it takes for you to submit to that overtime these coping skills that you will find that there really isn't a this is what you do because it's only gonna work for you when you discover it works for you it may be something as simple as having something your hands to fidget and maybe something that it requires you to completely step away from the charts and grab a book you know my mind personally I can't read if I'm in the market you know I can't do that I have to read when there's no one talking to me and I'll have complete silence so whatever those things are that you discover through journaling to help you and your trading don't look at it as that's your fix for trading stress many times if you apply it to your stressful personal life it fixes it as well what's many times is that's a plus you want to use positive words for the things you did well on you don't want to sugarcoat it you won't say you know I'm the best trader in the world because I did this but you do want to say I'm happy with my execution with this trade because I did this and I had that in mind and I did exactly as my plan outlined and I did not deviate I'm glad that I used the 25 pip stop-loss and didn't try to get short and sweet with it with a 15 or 10 pip stop I followed my rules regardless of what the trade was doing anything that you did that was predetermined and you follow through with it you want to record that in your own words and use adjectives like happy or pleased or proud okay those types of things because your minds gonna retain that and when you go back to it this is where it's important when you come back to your journal and you read those things you certainly don't want to litter it with things that are just gonna be mundane or not impactful you want to be well you want to cheerlead yourself basically because there's going to be times when you're gonna go through periods of drawdown and it's gonna feel like trading is the worst thing you could have ever done so you want to have that old friend of your conscience to feel soothed when you read your own words in your journal you don't want to read it like well you know I really didn't feel well that day and I'm lying to myself in there you want to be honest but you also want to be well you wanna be comforting to yourself but you don't want to sugarcoat and you don't want to embellish and lie about how you did something right when you really didn't you want to be accurate about what you're describing but you also want to do it in a positive light and here is the kicker when you do things messed up okay and you do the wrong things and you make errors you want to avoid negatively charged words where ever you struggled in the execution or the application of money management or your leveraging or if you ever traded you do not want to say oh I'm a stupid so-and-so or I am a failure or I'm never going to get this do not do those things in your journal because your mind will latch on to that and whatever you use negative words on your subconscious is gonna see that and say okay well this is a problem or it's a source of stress so I'm going to avoid it so what's going to happen when you look at the charts subconsciously your mind is going to say this is stressful I want to avoid this and you're not going to pay attention and or your mind is not going to let that set up jump off at this chart at you so that way you can engage it properly so it's very important not to use negative terms so while this is not an exhaustive list I wanted to have some measure of journaling suggestions and I wanted to have some measure of psychological well solutions and both of these topics can be really explored in greater detail and it comes by personal experience and while there's a lot of books written about both that's ugh the subject matter that I mentioned here tonight I don't think it's something that you need to make any more complicated than what I have here because this is really the bare bones of what I've done for 25 years and the best trading book out there is the one you're about to write in your journal that's the best one because they're going to be directly related to you and your own experiences you can't teach your experience to someone else you can talk about it you can share it you can share your journal let them read it but it still won't have the same impact that your experience has for you and that's the wonderful treasure and well secret weapon if you will of a trader by using a journal it seems like extra work it seems frivolous oh I got time for that who does that well I'll tell you who does it winning traders do it and we know what we're looking for because we've studied it we've had days and days and days on end where we have recorded the same exact setup the same winning attitude that we went into is always there so these are all signatures these are hallmarks of classic setups so that way when you start feeling a certain way going into the market day if you're not Owen you'll know it and you'll be honest with yourself and say okay I got to not be in the market today I got to take a day off otherwise how would you know those things because you're gonna talk yourself into taking a trade if you're feeling bad that's the normal response for a human distract me I need a distraction what's a better distraction than getting money nothing so you want to play the lottery it's time for casino so many times that results in a negative withdrawal from your equity whether it be demo or live and we want to try to avoid those things okay so what type of thing we look for in terms of adding charts to our journal and then we can go through the charts now and give you some suggestions alright so this is the Canadian dollars the daily chart and this particular week I was looking for the market to want to run above there's equal highs and I'll have that actually in recording so you can go back and look at that but we have double tops and a third time the market trades up to this same level so we know that this is too clean of a level we had a nice rejection down here so markets most likely gonna want to push above this level now if it's so clean like that what's the most likely outcome should it trade to that level a blast off and continue higher or retreating back down into the range oh look what's happened we've had a sell-off people have made money there so now let's sell off people have me money and now we're going right back up to those levels again so to take those individuals out or put new traders in on the wrong side buying the market's going to want to push up there so in your journal when you start seeing these things you want to print out your chart or screen capture it and in your notations you want to write down what you think is going to happen what's the most likely outcome okay so that we have a condition that we can wait against what actually happens later on but you want to build the context in your chart and your journaling so that way when you go back and look at it if it pans out well you're gonna be encouraged in the future when you have periods with time when your trades don't actually pan out okay and soon as the event that you've been waiting for occurs like I share a lot of my trades at the time of the setup or the confirmation if you will of whatever I'm looking for that sets the ID a lot this many times is the screen capture where either hits a level I was reaching for or a level I'm trying to get in it this is where you want to take a picture of it again and this is why I don't do 28 pairs or a lot of different markets because I'm only focusing on two things cable and fiber so it's very easy for me to the dialing and get the screen capture what I'm looking for and then I don't share my chart with all the notations on it because there's a lot of things that I do in my own finances and in my own trading that I don't make public so but I do make references to the things I'm talking about here in terms of okay this is the run on the buy stops so I'm right now I would say I would have an expectation of seeing a strong reversal and I would look for price don't want to reach down into those wicks here and see how far we can go in as far as that low here and now we can start dropping down into a four-hour chart and working to an intraday price action and we can see how noting areas of stops because if we thought that price is going to go up all these highs here again we give more details about what we're looking for the time of day that this occurred and how long of a timeframe we would reasonably expect to see this move take place if we're going to run out this low all those things you can add in all these open spaces on your chart you want to make it personal you want to make your journal and your charts something that's unique that you're comfortable with and it's something that you're really not aiming to share with anybody it's comfortable for you to be able to look at and it gives you all the information at the time what you were thinking at the time at the time the chart was creating the very setup that's being screen captured okay dropping down to a 30-minute chart same mindset here we're adding any details that we're noticing okay and we're here we have Monday's trading and the anticipated rally up once we see those types of things we know that this is the setup so we want to be a seller up here but where are we gonna be reaching for what's the draw on price so you want to have that before the trade really starts to unfold as its setting up you want to get extreme capture but at that time you also want to outline what you're reaching for and what was the context behind why you would expect it to occur we have an old low here got twenty and ten pip grades of swing that would be expected to go below it in here just for the sake of keeping the chart neat on this the referencing tempest below that low and on Monday because I don't like to trade on Monday I would like to use that Monday range and project it like the power three study that was used I'll tell you in the Asian session and or power three and I would take that Monday range if I'm bearish looking for that run I'm going to take that range of Monday and apply it right on top of its daily high and that gives me a projected range of one standard deviation and we take that out in the future it's approximately what Tuesday's high of the day is so I know that I'm looking for a Judas swing so how far will it go up well it could go this far which would take us right above that old high at 129 10 where it touch three times and that's where the buy sauce will be residing so we're looking for a move above that so it could be a seller right there but before we do that we have to remember if this is in fact a bearish week and this is the weekly high forming this Judas swing is useful and we can apply power three concepts to it we can get the range of the Judah swing and apply it in one standard deviation below the low in other words I'm taking this range and adding it or in this case subtracting it from this low and projecting it down you give me one standard deviation so we're seeing power 3 which is accumulation accumulate more manipulation run the stops put them in by side we're gonna see hopefully I moved down with power three with distribution and a final area distribution down here so we have three measurements of the actual Judah swing projected down and that gives us just below that old low so that validates this potential stop run while prices like this only we don't have anything else capping yet so we have power three scaled out accumulation manipulation and distribution framed before the move even occurs you can see that 10 pips below this low is what we're looking for so 10 pips below that we're gonna have a little level there and now we see Wednesday's trading and during the New York setup we have a optimal trade entry form and we can run projections on the fit we can see there's a 400 extension overlapping exactly with one of the levels we've already arrived at and then here's Wednesday gives an optimal trade entry short-term swing here trades back up athol trade entry short sells off aggressively and reaches down into our 10 pip sweep below the Oliv low and we're going to get a measurement from the highest body to the lowest body and these two price swings and that projection down gives us exactly a 300 extension right there and it actually gives you the low today which actually overlaps with the approximate 10 pips swing below the old low so we have several things being used here that I've given you in the recent teachings every one of these screen captures you would write down any notation that would be necessary for you to have as a benefit and that way when you go to the end of the week usually on Saturday morning for me may not be Saturday for you but I like to take about thirty minutes and go through to the market and see what I didn't see and note that but every day I'm writing down what my expectations are what the daily high-low should be and then I'm recording what actually happened and it builds a lot of confidence seeing how many times I'm right and when I'm wrong even though I learned something from the well the time I was not accurate it proves that I'm more right than I'm wrong so therefore I don't fear being wrong and I used the times when I'm wrong to learn what it is I did wrong so I'm taking no pain out of the experience I'm looking at it as okay this is actually like a workout okay I'm strengthening myself I'm I'm putting stress on my body with the attempt to make it stronger okay so I don't look at adverse --'tis in trading as a defeat I look at it as exercise and strengthening iron sharpens iron so we can see how using the tools here we get one more instance well this could be the very weekly low okay if we trade through it so be it but if this is all I would ever get that's fine because this would be power three applied to the weekly range okay and I apply that to weekly it's on the opening vertical line if you hit control Y and I use the thickest trendline to draw right on top of that then I delete the actual control wide line and I draw a little horizontal tick representing the open and I forecast where I think the close is gonna be and it doesn't have to be words you actually gonna close I like to do that just to keep myself entertained and trying to dial in as best I can for where I project the close sometimes I'm really accurate and other times I'm not so accurate but I'm more inclined to focus on what if I'm bearish what the highs going to be and how far of a reasonable objective how low it can go if it keeps going lower who cares long and short it is is I want to have an opportunity that get some kind of range expansion and on Wednesday we can also see that there was no return back to that opening price on Sunday once it moved away from it on the new york session set up we accelerated away from it there's a lot of things that took place in the dollar cad this week yet we have outlined before they are hallmarks to the things I've taught you and we did in fact run there's equal highs out as I mentioned in the higher time frame scenario and conditions video for this for xmas set of videos for 2017 so hopefully you enjoyed this presentation if you'd like to find more you can visit my website at the inner circle trader.com

okay folks welcome back this teaching is going to be specifically dealing with trade psychology and affective journaling okay trade psychology ineffective journaling the points of focus in this module major psychological barriers and my personal opinion in solutions for overcoming them and effective journaling how journaling can assist your development okay so major psychological barriers the first on our list is the fear of missing moves I believe this personally is rooted in not fully understanding what your setup is now you see this glibly tossed about in seminars webinars videos whatever it is folks that are teaching today many of them aren&#39;t even you know qualified to be in the role of a teacher in my opinion but we&#39;ll leave that for another discussion the fear of missing moves is rooted in your unique setup now every trader is gonna have their specific setup it may or may not have an indicator I personally don&#39;t believe that indicators should be a part of your trading but that&#39;s just my personal taste my faith in price action is sufficient enough but if you have a tool if you have a method if you will that relies on an indicator to give you that buy or sell decision for you then whatever it is you need to stick with it and know that that&#39;s the one you&#39;re going to trade if you have defined that setup in a written form in other words a trading plan you&#39;re not going to have many times that same feeling a neophyte trader or a lesser organised trader would have now it doesn&#39;t mean that we&#39;re going to be profitable it just means that we&#39;re not going to be fearing missing a move because once you understand this setup the setup should be directly linked to time and price there should be a time when this setup forms and there should be a consistency to it if your pattern doesn&#39;t have that and it&#39;s rather ambiguous or untimely you don&#39;t know when it&#39;s going to happen then you probably don&#39;t have a valid set up and you&#39;re gonna have hit and miss results and when it wins you&#39;re going to falsely attributed to your setup when it&#39;s really just randomness so to overcome fear of missing moves is obviously to have a well-defined plan and what your setup is knowing it intimately will keep you far less anxious about missing a move because you&#39;ll know when they&#39;re most likely going to form this is why I use kill zones this time element of the trading day I know what I&#39;m looking for I know my setup and if I know what time it should occur I know when what days of the week it should form and I know it should be either a bullish model or bearish model I&#39;m not anxious about missing a move even if I do miss that trade I know when the next one&#39;s going to form most neophyte or novice traders do not have that luxury they&#39;re on the seat of their pants all the time not knowing when it&#39;s going to happen or what it is it&#39;s supposed to happen at all for them to take a trade fear of losing well this one&#39;s going to have you looking for systems to have high accuracy and there&#39;s not a real need for high accuracy it&#39;s wonderful to have it but the fear of losing comes by not having a plan and if you don&#39;t have a plan if you don&#39;t have a method that seemed consistency in hindsight and back testing and then walk forward with it seeing it working and in having momentary lapses of accuracy you will not have the wherewithal that&#39;s necessary to do what is necessary as a trader that means embrace uncertainty the ability to do this is not going to be for everyone and there&#39;s going to be a fine line between those individuals that hit this wall that every one of us will hit and we had to determine for ourselves if this is really right for us and for some of you it isn&#39;t no one&#39;s gonna be able to make a decision before you but it&#39;s important that you understand that there is always that element if you&#39;re a new developing trader and you&#39;re unproven it may be that trading isn&#39;t for you you would have to more or less rely on someone else to do the trading for you or don&#39;t rate it at all but if you&#39;re gonna trade you can&#39;t fear taking a loss fearing a loss is many times directly linked to over leveraging and/or over trading both of those two elements are very easily fixed lower your leverage and you won&#39;t be so fearful about taking a loss because it won&#39;t hurt you so many times in a row if you have a losing streak if you slow your frequency down in terms of your over trading again even if you&#39;re not trading a high accuracy method or setup the high frequency won&#39;t be quickly eroding your equity very simple solutions to an otherwise rather routine problem that comes up in many traders impatience between setups this is going to come by way of infancy as a trader especially if you have a setup that is profitable and you can be well organized you could have a well-groomed money management strategy and you know what your setup is but you&#39;re impatient and waiting for it or you see the setup forming but you&#39;re trying to get in just before you&#39;re really supposed to in other words you&#39;re looking for a specific level you&#39;re looking the 50 level to be buying it and it&#39;s flirting with 65 and you just can&#39;t stand it he&#39;s got to get in that&#39;s going to be dealt with over time and forging discipline by following the rules in your method the problem is is you don&#39;t have the time killing it enough in the experience trading to know what this is going to require of you and you&#39;re going to have many times previous exposure either by demo preferably or if you eventually go into live trading which I don&#39;t ever try to tell anybody to do that because it&#39;s a decision you&#39;re gonna make on your own if you ever do it at all but if you find success that feeling or that rush you get when you make a profitable decision you want to have it right away as quickly as possible and many times immediately as soon as you close the trade or it hit your limit order and you&#39;re out with a profit another demo or live worst-case scenario it&#39;s alive you&#39;re going to want to go right back in again and you&#39;re going to jump in before your setups you&#39;re going to take things that aren&#39;t necessarily aren&#39;t your setups and I can tell you as a commodity trader when I had initial luck back in the early 90s I would have an idea what I wanted to trade but I would also feel that impulse to want to get back in and be a winner again so I would look at the market and say okay well that&#39;s not my setup but I still think it&#39;s gonna go up and I would buy it I had no idea what I was doing but I still sir come to that impulse that hey look you know I need to be doing something cuz I&#39;m sitting in from the charts and I want to feel good again so let me roll the dice and see what happens that impatience comes by way of your infancy and your lack of experience experience is going to teach you one of two things one that losing sucks and it&#39;s better that you tried not to lose too much when you do lose or experience it&#39;s gonna teach you that you&#39;re not perfect so therefore you have to wait for the best scenarios for your quote unquote luck to be in favor we don&#39;t know if our setups going to be accurate but we also don&#39;t know if our cells are going to come when we are expecting them to so forcing it or jumping ahead and more or less anticipating the setup whereas we&#39;re interested in next move in price that&#39;s what trading is it&#39;s a statistical guess now with that there&#39;s a measure of uncertainty and that uncertainty and the weighting side of trading it&#39;s just like a Water Torture okay it&#39;s you can&#39;t stand it especially if you&#39;re sitting in from the charts you just want to get into getting a trade already and accept the wider risk if you need it and that&#39;s wrong you don&#39;t want to do that demand your price demand your setup and by doing so you&#39;ll combat that impatience that resides between setups that novice traders always feel fear of not being good enough well this is a byproduct of being on social media everyone&#39;s gonna be better than the next guy or they&#39;re gonna be trained by the person that&#39;s leading the pack or they themselves are you know the rock star if you are not equipped to handle the tomfoolery that takes place on social media like Facebook and Twitter and Instagram it&#39;s probably better for you not to be on it now I understand that I have a online presence on Twitter and I have a Facebook and I have a YouTube channel but I have a thick skin and I like to engage other traders because I like the feedback I like to see what their responses will be and I just like the engage so if you are quickly feeling like you are not sufficient or your learning speed is not up to snuff in terms of what you&#39;ve seen other people and many times what you see online they&#39;re lying anyway they may say they have their things together they&#39;re all you know completely figured it all out in terms of what they&#39;re doing many times the ones that are saying that aren&#39;t really as astute as they claim to be and they&#39;re trying to fake it until they make it so don&#39;t let it wear on you to too much or make you feel like you&#39;re insignificant in terms of where you&#39;re at in your development because your report card on your own results as you&#39;ll hear me refer to in the journaling section of this video that&#39;s the only opinion that matters it&#39;s not mine or anyone elses that matters it&#39;s are you seeing development progress and by measuring that and by keeping tabs in that in terms of your journal that&#39;s the scorecard that really matters and obviously knew your bottom the bottom line that&#39;s the one that really makes the case for whether or not you&#39;re developing so fear of not being good enough is simply a game that&#39;s between your ears it&#39;s all a trap so don&#39;t think about being on social media don&#39;t engage other people because if you&#39;re developing sure the worst thing you can do for you men is to go into this armwrestling match about you know what&#39;s better who&#39;s better how much is you know a good amount and what you should be making in terms of pips all that stuff is the goes back to the proverbial measuring contest you know who&#39;s the bigger man and it&#39;s not about who&#39;s the bigger man it&#39;s about surviving long enough so that way you can appreciate and develop as a traitor fear of losing streaks and drawdown well this is going to be directly related to money management and if you&#39;re afraid of taking losses in any set or series and or fear drawdown it&#39;s because you have no process or protocol in place or what you would reach for should you have a loss or a losing streak develop I&#39;ve given you a teaching to help you flatline your your losses that way it removes the effects of drawdown in your losing trades and by implementing something as simple as that quickly changes your perspective on fear and anxiety about taking losses or a single string of losses lack of discipline and following roles well it&#39;s in our nature to be human and I&#39;ve said this many times if the sign says don&#39;t walk on the grass your first impulse is gonna be what I&#39;m gonna tap-dance all over that look just like your children you know god bless them you know I have four boys and I have literally watched them do these very same things that they should know not to do but they still do it well with an account with money or a demo we do those same things we know we shouldn&#39;t be doing something but because there&#39;s an opportunity to do it and there&#39;s really no one keeping you from doing it you end up doing it as soon as you into the trade or mess around with your trade like you shouldn&#39;t as soon as you do it that little voice in your head says I should not be doing this or don&#39;t do this but you ignore it you want to see what&#39;s gonna happen and if you want to experiments okay do it somewhere else not in the marketplace but you have to have discipline and you have to have rules and when those rules are made you have to stick to them do not deviate from them and over time this Forge is discipline and it&#39;ll also serve you well because you&#39;re going to have periods of drawdown you&#39;re going to have periods of losing trades and if you don&#39;t have the discipline to stick to doing the very things that will eventually lead to longevity in this business you&#39;re not gonna fare well so discipline comes by forcing yourself to follow a set of rules and those rules have to be rigid they have to be concise detailed and not ambiguous they&#39;re very binary in the sense that you do this or you do that or you do nothing at all and they have to be three conditions for every decision-making process either it&#39;s a go it&#39;s a no or you sit still and you don&#39;t do anything searching for the next best thing I think this is one of the biggest problems if you just look at Twitter whoever is hot right now whoever&#39;s got the most attention by everyone that&#39;s where everyone&#39;s gonna flock okay and it&#39;s always been like that not just in trading but in anything okay whoever&#39;s barking loudest draws the biggest crowd now whether or not they have anything to say once the crowd gets there that remains to be seen but you can see how folks that are in love with one concept or one guru or method this month will change teams and go somewhere else in the thought process thinking that this is the better way of doing it or this is something different in it&#39;s an amplification of something and I have learned that there&#39;s nothing really better for me as a trader so therefore I don&#39;t look anymore I know everything I need to know in terms of price action the open high low and close tells me everything I need there isn&#39;t anything out there that entices me personally and like the Bible said there&#39;s nothing new Under the Sun so if I have arrived at something that makes sense for me even if it&#39;s not perfect I don&#39;t need perfect but I know I have a statistical edge in the things that I do they&#39;re highly accurate they&#39;re very precise and they&#39;re time-based I know when my setup is going to form you if you were able to pull the majority of individuals that were trading any asset class if they could set a time on when their next I was gonna be Dober 90% would say I don&#39;t think so I don&#39;t think I could do that that&#39;s why trading is uncertain to me it&#39;s not because I know what time they certain things should happen I know what days of the week certain things should happen so therefore I&#39;m not anxious about women next so it&#39;s going to be I don&#39;t care about missing a move in fact it&#39;s fruitful for you to take vacation time scheduled time away from the marketplace and do that and I would suggest to do that even more so if you&#39;re hot right now if you&#39;re really really well best thing you can do is forge development in terms of your discipline and also your experience force yourself as FK I&#39;m taking a break now I&#39;ve been killing it I got 25 winning trades in a row or whatever it would be I&#39;m gonna stop trading it&#39;ll take a week off don&#39;t even look at the marketplace you&#39;re gonna want to look at it but don&#39;t by doing that you&#39;re gonna prove yourself there&#39;s nothing better than the thing you&#39;re doing right now because you understand it doesn&#39;t have to be my material if you found something in another discipline that you&#39;ve really gravitated towards and it made sense for you to use it great that&#39;s awesome that&#39;s all it matters is that you find something that you can make a wager on and then wager that with sound money management because ultimately no matter whether we&#39;re talking about order blocks or ICT breakers or anything else that&#39;s out there none of that stuff really makes price move and we can&#39;t control price once we&#39;re in the trade once we&#39;re in the market all of the control the steering wheel is not ours now the markets driving what we&#39;re going to see in terms of profit or loss so understanding that everyone&#39;s gonna have losing trades and the first thing that happens is folks that go through a losing streak and the experienced drawdown then they show their lack of discipline and following rules so they think there&#39;s something better out there okay something easy or something that doesn&#39;t have losing streaks everything has losing streaks folks believe me everything does no one stays hot or the top forever and there&#39;s always going to be some measure or drawdown and whatever system or method you&#39;re using so the best thing you can do is find something that works enough time to warrant investigation and stick with it you sound money management and you can turn it into something really impressive and you may in surprise yourself okay effective journaling about doing journals every single day I make a journal entry in my personal journals at the end of the week usually it&#39;s on a Saturday I do a weekly vlog in my personal performance and what I have seen happen in the previous week more or less I&#39;m reviewing the total weeks range I do this on the two pairs that I trade which is predominantly the euro dollar and the cable pound dollar I don&#39;t do a lot of trading in a lot of other payers if I want to be a deviant I will trade sometimes the Canadian dollar or the Aussie dollar but generally that&#39;s about it I don&#39;t like to do anything more than that and the reason why is because I actually spent a lot of time planning and investigating certain setups and things I&#39;m looking at and I want to go through that time and use that time the most economical way I can and I don&#39;t want to be doing that with 28 pairs so if I&#39;m going to put the time into doing a sound top-down analysis and/or review of my own setups if I&#39;m following 28 pairs can you realistically do that every single day you&#39;re never gonna have any time to do anything else so I have a life to live and I can find all the setups I&#39;ll ever want to find in these two pairs in fact I could just trade one but because they&#39;re closely correlated and it fits my model as far as a short-term and day trader I look at both euro dollar and cable and if I want to find something else that may or may not have a set up in a cable or fiber then I&#39;ll trade like I said the loonie or the Aussie but I tried to make a daily entry whether I take a trade or not and I give myself an opportunity to stay in a routine but every single week I&#39;m doing a complete review of the weekly performance as my trader half of me has performed and then the analyst half of me so I&#39;m always giving a voice to the two people that reside in me just like you oh you all are going to be looked at internally as a traitor but there&#39;s actually an analyst inside of you too and there&#39;s also a gambler so you have to figure out who&#39;s in control at the time when you&#39;re doing the trading and many times you don&#39;t see it before you do into the trade you always see it after the trade ok the ones that paint out really really well and you&#39;re not feeling a lot of exposure to uncertainty or fear and anxiety generally you&#39;re gonna find that that&#39;s going to be the analyst because they&#39;re focusing on the numbers and they&#39;re not really worried about it the person that finds themselves excited about the results many times no they&#39;re good or I guess the adverse side of things they&#39;re weighing things in terms of the outcome that&#39;s the trader and then you have the gambler where they&#39;re impulsive they&#39;re doing things that are undisciplined and they&#39;re pushing more leverage than they should that&#39;s the one you want to keep your eye on ok the gambler is going to get you in trouble the trader will take care of himself because the analyst will speak to that side of you to your conscience but you want to reside in the mindset of the analyst sticking to what you see in the chart sticking to what your process is your your model ok the analyst is what&#39;s going to keep you on the right path that formation that makes a trader is it&#39;s made up of three people but you&#39;re all the same person the analyst generally they&#39;re the ones that are most sober minded the trader is the one that wants the opportunity and the right or wrong measurement but then you have the gambler who wants the thrill of it all and it&#39;s also going to be the person that takes the hardest in terms of the grief that comes when there&#39;s a losing trade and that part of you is gonna always be negative it&#39;s going to be well it&#39;s not my fault it&#39;s something else that call that the gambler is only gonna be worrying about when it was right and when they made money or when you made money when it was in your favor that&#39;s when you want consider it but when it isn&#39;t making money for you the gamblers gonna cry it&#39;s gonna manifest itself into a spoiled perspective toxic thinking so you kind of like want to keep that side of you on a short leash and you don&#39;t want to allow it to manifest itself in your journaling how you felt going into the trading day is really important there were times in my life as a trader that my oldest son would have to go into surgery and I wish I would have stayed out of the market those days because I was already anxious I was already nervous about the outcome of the surgery so those are days that I wish I would have had the discipline to not trade but because I was feeling anxious and helpless because I couldn&#39;t do anything to fix my son&#39;s ailment I would try to satisfy my anxiety by having a win because even if I made a hundred bucks doing something in the marketplace it would keep me distracted from what I was feeling in my personal life so you&#39;re gonna see that you&#39;re losing trades are going to be directly related to things that are going on in your personal life and the only way you&#39;re gonna see that trend or that truism is if you go through your journal and you index all of your trades based on a negative mindset or if you&#39;re sick if you&#39;re physically ill probably not a good idea to trade if you have a migraine like I have migraine sometimes and I have made the mistake of sometimes still time to take control of her because there&#39;s nothing worse than feeling like your head&#39;s gonna explode and I already have sensitive eyes so I can&#39;t look at the chart long to follow out what is the best procedure for me right now should I stick with the trade should I move my stuff should I do anything with it when it would be better for me just to not to be in it at all and just relax and go to a quiet dark place and Allisyn just relax and let my migraine take care of itself so how you feel okay and this is not only physically but how you feel emotionally did you just have a death in the family we&#39;re seeing in the world you can do is medicate yourself by rolling the dice you know you just have loss in your family or you and your spouse you&#39;re separating god forbid or something terrible happens okay you don&#39;t want to open yourself up to gambling okay because that&#39;s what&#39;s going to become in those environments you want to be relaxed you want to have a neutral mindset going in you want to feel healthy it&#39;s why it&#39;s important to have a good exercise program good healthy diet and staying active and stretching out and giving yourself hobbies outside of trading because you want to have a fresh perspective you want to have a alert mind you want to have a healthy fed body going into the marketplace with a sickly unrest &#39;add which I didn&#39;t enter me for but sleep is important you need to have it especially if you have jobs and businesses you need to recuperate I&#39;ve been blessed and I have to need those things because I&#39;m home most of the time doing whatever I want to do so sleep for me isn&#39;t as needed versus someone that has a business and you know doing all these things or has a job and they have to commute I mean commuting alone okay if you&#39;re rushing home from your job you know and you had a bad experience on the road you&#39;re angry so what are you gonna do you&#39;re gonna want to take it out on the marketplace you&#39;re you&#39;re upset so you&#39;re looking to have that replaced by some kind of a feel-good feeling and what better feeling is there is to make money okay it&#39;s like there&#39;s a lottery so you&#39;re gonna do things that you shouldn&#39;t do because you&#39;re acting impulsively because of the way you feel so it&#39;s important that you always be honest with yourself when you journal I always give myself an opportunity to debrief okay and also release those things and it&#39;s almost therapeutic because you know what you&#39;re doing is the wrong thing when you do it and you&#39;re acting impulsively because you want to have a different feeling than whatever it is that&#39;s bothering you okay if you&#39;re stressed if you&#39;re worried if you&#39;re angry you just want to replace that with something okay and since we&#39;re traders we can clearly see that there is a reason to expect a market to go up or down so all we have to do is roll the dice and just gamble and see what&#39;s gonna happen and our attention will be diverted from whatever the things that we are stressing over or anxious about or mad about or sad about or fearful of all those stimuli will be replaced by I&#39;m in a trade and I made the mistake of doing that as a young man and it filled my head up with all the wrong things as a trader so the way you want to avoid that is be sober-minded going into the trade and also know what it is you&#39;re feeling at the end of the day when you&#39;re done trading you want to put that into word and write it out and be honest not if you know you were angry at your spouse or if you angry at your your child or if you&#39;re worried about something that&#39;s taking place if you have a job you&#39;re if you&#39;re anxious about losing your job or if you&#39;re angry that someone else got a promotion that you didn&#39;t get okay make sure that you do that in your journal by allowing it to come out because if you don&#39;t release it and put it in your journal where you can see it in text read it and release it if you don&#39;t do that you&#39;re gonna harbor it and it&#39;s going to become cancerous to you as a trader it&#39;s going to infect your mind it&#39;s going to infect your your performance and it&#39;s not going to always be what you want okay it&#39;s going to be many times the opposite of what you&#39;re expecting it&#39;s going to have an adverse effect on your overall development anyone record any of your concerns or fears that you had while you&#39;re watching price action so if you&#39;re in a trade or not in the trade whenever you feel a sense of anxiousness or not trusting to set up the our beautiful opportunities for you to learn because that&#39;s when you want to be doing screen captures okay if you&#39;re in front of the charge you have the luxury of being able to do that screen capture that very moment and then in your chart you want to make a notation of what you&#39;re feeling and what you&#39;re thinking at that time you may be feeling that it&#39;s getting go up but it&#39;s retraced a little bit deeper than you thought and you&#39;re starting to have anxiety about it it may not pan out that&#39;s a time when you want to screen capture and make that notation and log that keep that as part of your journal entry each time you do this you&#39;re gonna find that you&#39;re gonna find less sensitivity or emotional attachment to these ideas because you&#39;ve been there before and yes you see that there may be a opportunity for the trade this you know to fail and hit your stop-loss but if you stick with it how many times did it really actually go there and that&#39;s the benefit of keeping a journal because unless you write the things down and keep a journal of what the charge looks like and what you were thinking you&#39;re never going to remember them you&#39;re gonna remember that really good trade and you&#39;re gonna try to forget with all of your energy and effort a night to forget those trades that you should have never been in you knew you were getting into it and you should have never done it and now you&#39;re gonna do your best to try to avoid it and and forget that ever happened and they&#39;re your lessons that see what you want to learn from so journaling is absolutely crucial to your development as a trader especially if you want to be organized and you want to be collective and calm about what you&#39;re doing that only comes by doing this exercise here journaling every professional whether it be a doctor or a lawyer physician psychologist long and short is is they keep good records about what they say what they have done they do not want to rely on their memory and you can&#39;t rely on your memory you&#39;re gonna forget things okay every 7 years your brain breaks off this little nodule okay and part of that you lose memory so it&#39;s important to keep a record of things that you&#39;ve said and done because when you have these adverse times in the future as a trader because you&#39;re going to you want to go back and reflect on those times too you forgot how you&#39;ve been through that before and what you did to go through it&#39;s important contrast your personal expectations of what you thought was going to happen in the marketplace and how you were going to do versus the actual result this is where you get to be more or less than the scorekeeper you&#39;re able to soberly and balanced give a an opinion about what you did in terms of your analysis going into the day for the week and then what actually happened now you&#39;re not in this section of journaling to beat yourself up that&#39;s not what this is but what you&#39;re trying to do is highlight the things that you missed but you don&#39;t want to draw so much attention to it that it seems like you&#39;re writing you know a suicide letter like you know I&#39;m no good um this or that what you want to be doing is is highlighting the opportunities for you to develop the better or spend more time focusing on in your weaknesses because that&#39;s what journaling helps you do it identifies your weaknesses you if you were too honest with yourself you probably would have about ten things that you could list as a weakness but you&#39;re probably gonna have four to five times more than that that you won&#39;t really readily discover until you go through the journaling process and it&#39;s not something you do for a short term and then you abandon it you always do this I&#39;ve been doing it for 25 years and I did journaling before that and other things in my life so to me it&#39;s it&#39;s something I&#39;ve always done and you don&#39;t need to spend a whole lot of time doing it but I&#39;ve always made a reference to what I&#39;ve done or said in the previous day at the end of the day in other words I&#39;m looking back in reflection otherwise if I try to go to bed my mind will not allow me to because my mind&#39;s gonna race I should write this down in many times I have tried to go to bed even after journaling and I have something on my mind I can&#39;t do it until I get up and I write that down on my journal because then it&#39;s I&#39;ve released it and the only way you&#39;re going to trade with a emotion free or as close as you and a well-balanced mine is to have a clear conscience anything that&#39;s bothering you you release it into your journal your journals not gonna call you a name it&#39;s not gonna say it wants a divorce it&#39;s not gonna say you don&#39;t love me enough or you don&#39;t spend time with me enough okay it&#39;s only gonna say what you write in it so when you go back to it it&#39;s going to say the words that you put in so it&#39;s important to what you put in it is gonna benefit you but you&#39;re not sure coding it either so you want to be honest about your evaluation about what you did or thought going into the day or the week and then what the actual results were keep it simple all you&#39;re doing is this is what I thought and this is what actually happened you&#39;re not using adjectives you&#39;re just stating the facts this is what I thought was going to happen I thought I was gonna go here I thought was gonna have this effect I was going to move this much and this is what the actual result was and you&#39;re not adding anything to it or attaching any emotionalism to it okay you want to detail where you felt uncertainty and this is important how you actually coped with it you&#39;re gonna find that many of your coping skills for stress aren&#39;t really coping skills they&#39;re actually feeding that emotional stimuli and it creates even more stress the only way you&#39;re gonna find that is by actually recording it writing it down and you may be in a trade and it may be flirting with your limit order and you&#39;ve already had your profits taken for the most part scaled out your stop-loss is child up now but now you&#39;re feeling like it&#39;s going you hit your stop and you know I&#39;m gonna get that last piece of the move what are you doing to cope with that are you staring at the chart screaming or are you taking a walk or are you turning the computer off and then saying I&#39;m gonna see what happens at the end of the day you know come hell or high water it&#39;s gonna take my stop or it&#39;s gonna take my limit or it&#39;s gonna trade sideways until the next session and then whatever it&#39;s gonna happen is gonna happen whatever that coping mechanism is that you used for that stress trigger you want to include that because it&#39;s important the ones that do not work you&#39;re gonna see in that way when you start feeling that stress trigger come up you immediately discount that felt process to follow that same regimen again if it&#39;s something that hasn&#39;t worked in the past and it&#39;s maintained a stressful level and you know you&#39;re wanting to think about it or do that same thing again like smoke cigarettes okay or grab a drink that&#39;s alcoholic those things you may feel like they&#39;re soothing you but actually they&#39;re not so what you wanna be doing is focusing on when the coping mechanism that you&#39;ve used to get through that stressful environment when it helps you it&#39;s highlighted on an opportunity for you to use that in the future and here&#39;s the thing many times I&#39;ve learned coping skills that were in high stressful events through trading when I had stressful events and my personal life I used those same coping skills so for instance you know while I&#39;m trading I usually have a deck of cards in my hands I&#39;m a fidgeter okay and now they have these things called these fidget spinners which I had loved them I absolutely loved them for me it keeps me distracted from worrying about what next moves gonna be in price I&#39;m allowing my method to pan out and do what it&#39;s gonna do before I did that I used to have a coin I&#39;d always keep a coin in my hand and I&#39;d either roll it through my fingers or I would just keep it pressed in my palm and I would just practice palming okay because I&#39;ve some of them amateur magician nonetheless I would do those things to keep me distracted and not being hypersensitive to every fluctuation in the marketplace so whatever the coping skills are okay that you find work in high stressful environment of trading I found that they were they were just as equally effective in high stressful environments like when my son was in surgery you know I would take it to cards and I would fidget with those or I would have coin in my hand and it would just keep me distracted enough where I had to go through that experience I couldn&#39;t escape it just like you can&#39;t escape the trade unless you just kill it if you&#39;re going to take the trade you have to through the trade either it takes your stop or it takes your limit but you have to submit to that so whatever it takes for you to submit to that overtime these coping skills that you will find that there really isn&#39;t a this is what you do because it&#39;s only gonna work for you when you discover it works for you it may be something as simple as having something your hands to fidget and maybe something that it requires you to completely step away from the charts and grab a book you know my mind personally I can&#39;t read if I&#39;m in the market you know I can&#39;t do that I have to read when there&#39;s no one talking to me and I&#39;ll have complete silence so whatever those things are that you discover through journaling to help you and your trading don&#39;t look at it as that&#39;s your fix for trading stress many times if you apply it to your stressful personal life it fixes it as well what&#39;s many times is that&#39;s a plus you want to use positive words for the things you did well on you don&#39;t want to sugarcoat it you won&#39;t say you know I&#39;m the best trader in the world because I did this but you do want to say I&#39;m happy with my execution with this trade because I did this and I had that in mind and I did exactly as my plan outlined and I did not deviate I&#39;m glad that I used the 25 pip stop-loss and didn&#39;t try to get short and sweet with it with a 15 or 10 pip stop I followed my rules regardless of what the trade was doing anything that you did that was predetermined and you follow through with it you want to record that in your own words and use adjectives like happy or pleased or proud okay those types of things because your minds gonna retain that and when you go back to it this is where it&#39;s important when you come back to your journal and you read those things you certainly don&#39;t want to litter it with things that are just gonna be mundane or not impactful you want to be well you want to cheerlead yourself basically because there&#39;s going to be times when you&#39;re gonna go through periods of drawdown and it&#39;s gonna feel like trading is the worst thing you could have ever done so you want to have that old friend of your conscience to feel soothed when you read your own words in your journal you don&#39;t want to read it like well you know I really didn&#39;t feel well that day and I&#39;m lying to myself in there you want to be honest but you also want to be well you wanna be comforting to yourself but you don&#39;t want to sugarcoat and you don&#39;t want to embellish and lie about how you did something right when you really didn&#39;t you want to be accurate about what you&#39;re describing but you also want to do it in a positive light and here is the kicker when you do things messed up okay and you do the wrong things and you make errors you want to avoid negatively charged words where ever you struggled in the execution or the application of money management or your leveraging or if you ever traded you do not want to say oh I&#39;m a stupid so-and-so or I am a failure or I&#39;m never going to get this do not do those things in your journal because your mind will latch on to that and whatever you use negative words on your subconscious is gonna see that and say okay well this is a problem or it&#39;s a source of stress so I&#39;m going to avoid it so what&#39;s going to happen when you look at the charts subconsciously your mind is going to say this is stressful I want to avoid this and you&#39;re not going to pay attention and or your mind is not going to let that set up jump off at this chart at you so that way you can engage it properly so it&#39;s very important not to use negative terms so while this is not an exhaustive list I wanted to have some measure of journaling suggestions and I wanted to have some measure of psychological well solutions and both of these topics can be really explored in greater detail and it comes by personal experience and while there&#39;s a lot of books written about both that&#39;s ugh the subject matter that I mentioned here tonight I don&#39;t think it&#39;s something that you need to make any more complicated than what I have here because this is really the bare bones of what I&#39;ve done for 25 years and the best trading book out there is the one you&#39;re about to write in your journal that&#39;s the best one because they&#39;re going to be directly related to you and your own experiences you can&#39;t teach your experience to someone else you can talk about it you can share it you can share your journal let them read it but it still won&#39;t have the same impact that your experience has for you and that&#39;s the wonderful treasure and well secret weapon if you will of a trader by using a journal it seems like extra work it seems frivolous oh I got time for that who does that well I&#39;ll tell you who does it winning traders do it and we know what we&#39;re looking for because we&#39;ve studied it we&#39;ve had days and days and days on end where we have recorded the same exact setup the same winning attitude that we went into is always there so these are all signatures these are hallmarks of classic setups so that way when you start feeling a certain way going into the market day if you&#39;re not Owen you&#39;ll know it and you&#39;ll be honest with yourself and say okay I got to not be in the market today I got to take a day off otherwise how would you know those things because you&#39;re gonna talk yourself into taking a trade if you&#39;re feeling bad that&#39;s the normal response for a human distract me I need a distraction what&#39;s a better distraction than getting money nothing so you want to play the lottery it&#39;s time for casino so many times that results in a negative withdrawal from your equity whether it be demo or live and we want to try to avoid those things okay so what type of thing we look for in terms of adding charts to our journal and then we can go through the charts now and give you some suggestions alright so this is the Canadian dollars the daily chart and this particular week I was looking for the market to want to run above there&#39;s equal highs and I&#39;ll have that actually in recording so you can go back and look at that but we have double tops and a third time the market trades up to this same level so we know that this is too clean of a level we had a nice rejection down here so markets most likely gonna want to push above this level now if it&#39;s so clean like that what&#39;s the most likely outcome should it trade to that level a blast off and continue higher or retreating back down into the range oh look what&#39;s happened we&#39;ve had a sell-off people have made money there so now let&#39;s sell off people have me money and now we&#39;re going right back up to those levels again so to take those individuals out or put new traders in on the wrong side buying the market&#39;s going to want to push up there so in your journal when you start seeing these things you want to print out your chart or screen capture it and in your notations you want to write down what you think is going to happen what&#39;s the most likely outcome okay so that we have a condition that we can wait against what actually happens later on but you want to build the context in your chart and your journaling so that way when you go back and look at it if it pans out well you&#39;re gonna be encouraged in the future when you have periods with time when your trades don&#39;t actually pan out okay and soon as the event that you&#39;ve been waiting for occurs like I share a lot of my trades at the time of the setup or the confirmation if you will of whatever I&#39;m looking for that sets the ID a lot this many times is the screen capture where either hits a level I was reaching for or a level I&#39;m trying to get in it this is where you want to take a picture of it again and this is why I don&#39;t do 28 pairs or a lot of different markets because I&#39;m only focusing on two things cable and fiber so it&#39;s very easy for me to the dialing and get the screen capture what I&#39;m looking for and then I don&#39;t share my chart with all the notations on it because there&#39;s a lot of things that I do in my own finances and in my own trading that I don&#39;t make public so but I do make references to the things I&#39;m talking about here in terms of okay this is the run on the buy stops so I&#39;m right now I would say I would have an expectation of seeing a strong reversal and I would look for price don&#39;t want to reach down into those wicks here and see how far we can go in as far as that low here and now we can start dropping down into a four-hour chart and working to an intraday price action and we can see how noting areas of stops because if we thought that price is going to go up all these highs here again we give more details about what we&#39;re looking for the time of day that this occurred and how long of a timeframe we would reasonably expect to see this move take place if we&#39;re going to run out this low all those things you can add in all these open spaces on your chart you want to make it personal you want to make your journal and your charts something that&#39;s unique that you&#39;re comfortable with and it&#39;s something that you&#39;re really not aiming to share with anybody it&#39;s comfortable for you to be able to look at and it gives you all the information at the time what you were thinking at the time at the time the chart was creating the very setup that&#39;s being screen captured okay dropping down to a 30-minute chart same mindset here we&#39;re adding any details that we&#39;re noticing okay and we&#39;re here we have Monday&#39;s trading and the anticipated rally up once we see those types of things we know that this is the setup so we want to be a seller up here but where are we gonna be reaching for what&#39;s the draw on price so you want to have that before the trade really starts to unfold as its setting up you want to get extreme capture but at that time you also want to outline what you&#39;re reaching for and what was the context behind why you would expect it to occur we have an old low here got twenty and ten pip grades of swing that would be expected to go below it in here just for the sake of keeping the chart neat on this the referencing tempest below that low and on Monday because I don&#39;t like to trade on Monday I would like to use that Monday range and project it like the power three study that was used I&#39;ll tell you in the Asian session and or power three and I would take that Monday range if I&#39;m bearish looking for that run I&#39;m going to take that range of Monday and apply it right on top of its daily high and that gives me a projected range of one standard deviation and we take that out in the future it&#39;s approximately what Tuesday&#39;s high of the day is so I know that I&#39;m looking for a Judas swing so how far will it go up well it could go this far which would take us right above that old high at 129 10 where it touch three times and that&#39;s where the buy sauce will be residing so we&#39;re looking for a move above that so it could be a seller right there but before we do that we have to remember if this is in fact a bearish week and this is the weekly high forming this Judas swing is useful and we can apply power three concepts to it we can get the range of the Judah swing and apply it in one standard deviation below the low in other words I&#39;m taking this range and adding it or in this case subtracting it from this low and projecting it down you give me one standard deviation so we&#39;re seeing power 3 which is accumulation accumulate more manipulation run the stops put them in by side we&#39;re gonna see hopefully I moved down with power three with distribution and a final area distribution down here so we have three measurements of the actual Judah swing projected down and that gives us just below that old low so that validates this potential stop run while prices like this only we don&#39;t have anything else capping yet so we have power three scaled out accumulation manipulation and distribution framed before the move even occurs you can see that 10 pips below this low is what we&#39;re looking for so 10 pips below that we&#39;re gonna have a little level there and now we see Wednesday&#39;s trading and during the New York setup we have a optimal trade entry form and we can run projections on the fit we can see there&#39;s a 400 extension overlapping exactly with one of the levels we&#39;ve already arrived at and then here&#39;s Wednesday gives an optimal trade entry short-term swing here trades back up athol trade entry short sells off aggressively and reaches down into our 10 pip sweep below the Oliv low and we&#39;re going to get a measurement from the highest body to the lowest body and these two price swings and that projection down gives us exactly a 300 extension right there and it actually gives you the low today which actually overlaps with the approximate 10 pips swing below the old low so we have several things being used here that I&#39;ve given you in the recent teachings every one of these screen captures you would write down any notation that would be necessary for you to have as a benefit and that way when you go to the end of the week usually on Saturday morning for me may not be Saturday for you but I like to take about thirty minutes and go through to the market and see what I didn&#39;t see and note that but every day I&#39;m writing down what my expectations are what the daily high-low should be and then I&#39;m recording what actually happened and it builds a lot of confidence seeing how many times I&#39;m right and when I&#39;m wrong even though I learned something from the well the time I was not accurate it proves that I&#39;m more right than I&#39;m wrong so therefore I don&#39;t fear being wrong and I used the times when I&#39;m wrong to learn what it is I did wrong so I&#39;m taking no pain out of the experience I&#39;m looking at it as okay this is actually like a workout okay I&#39;m strengthening myself I&#39;m I&#39;m putting stress on my body with the attempt to make it stronger okay so I don&#39;t look at adverse --&#39;tis in trading as a defeat I look at it as exercise and strengthening iron sharpens iron so we can see how using the tools here we get one more instance well this could be the very weekly low okay if we trade through it so be it but if this is all I would ever get that&#39;s fine because this would be power three applied to the weekly range okay and I apply that to weekly it&#39;s on the opening vertical line if you hit control Y and I use the thickest trendline to draw right on top of that then I delete the actual control wide line and I draw a little horizontal tick representing the open and I forecast where I think the close is gonna be and it doesn&#39;t have to be words you actually gonna close I like to do that just to keep myself entertained and trying to dial in as best I can for where I project the close sometimes I&#39;m really accurate and other times I&#39;m not so accurate but I&#39;m more inclined to focus on what if I&#39;m bearish what the highs going to be and how far of a reasonable objective how low it can go if it keeps going lower who cares long and short it is is I want to have an opportunity that get some kind of range expansion and on Wednesday we can also see that there was no return back to that opening price on Sunday once it moved away from it on the new york session set up we accelerated away from it there&#39;s a lot of things that took place in the dollar cad this week yet we have outlined before they are hallmarks to the things I&#39;ve taught you and we did in fact run there&#39;s equal highs out as I mentioned in the higher time frame scenario and conditions video for this for xmas set of videos for 2017 so hopefully you enjoyed this presentation if you&#39;d like to find more you can visit my website at the inner circle trader.com

Transcript for:Trade Psychology and Effective Journaling

Transcript for:
Trade Psychology and Effective Journaling