Start Winning By Mastering the Mind
Welcome to Money Mitch PEAK Performance Series where psychology meets trading to get your trading game to the top level.
Resources:
The Observer - by Todd Stottlemyre
Key Takeaways:
- There's waves to this game
- Managing your winning and losing streaks
- How to keep statistics or data on your trading
- You can only stay in the zone
- How to control capital and adjust
Hosted By:
Mitch Hoch @STORYInvestors
Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.
#TradingPsychology #PEAKPERFORMANCE
Transcript:
I want to go ahead and build on our peak performance, build on our trading mentality, our psychology, so that we can all become better traders. If you guys are going through these struggles have seen these struggles or know somebody that's going through this also.
All right, guys, welcome to it. Peak performance, where we go ahead and we attend to the trading psychology and always work to get better in our execution. You know, the way this show started was really by a book, The Observed, and what it was about is, was getting to your peak performance from that level.
We can always understand that if one were trading in the zone or in peak perform. We're going to have our best trading performance. And this is just how it is in every sport. You know, you're not always at peak performance. You ha there's like kind of this wave that you have to battle, but if we can focus and try to improve and stay longer periods in time in our trading zone, we're going to see that the returns come back to us.
All right. So first things first, we're going to talk about the way of trading guys, the way. Yeah, there's waves to this game, guys. There's waves to this game. I've always said it there's levels. There's waves to the game. Hey, let's go ahead. Let's start taking a look. This is the lesson from our own trading patterns, which really matters.
I think this is what the important part of this part is, is not that this is off of anybody else's data. You should base this off of your data. So if you're not taking data off, Hey, you might as well just end this show and go get your trading journal and really get it down packed because that's worth more than just even my show.
I want you guys taking your data. So One of the key ways to judge your trading is to keep statistics or data on your trading. You know, I use trader view a lot of times because that's just a free version of keeping some data on, on paper and gives you a nice way of looking at it.
But really what we want to see is we want to see our trading patterns. We want to see that trading comes in waves. A lot of the times there's going to be times where we're doing great. You know, weeks of straight green, where you look back at your results and you're like, Hey man, I've been green for like five weeks, but then there's also going to be times where we struggle and we drop into a slump.
This is always going to happen. We have to understand that there's waves to this game and there's going to be highs and there's going to be lows. And there's also going to be streaks of on both sides, winning side and losing side. So you need to decide how to best manage this. How can we manage the way.
So one of the things that happens is that, you know, this, the pattern that we're seeing in, in both our tradings. And so one of the things that we're going to see often is that when we look at the waves of trading, I want you going back and seeing how your return is doing. So when we look here, like we're looking at right now, this chart, one of the things you want to see is how are the peak.
How are the trows, how are the bottoms of supports? Do you get that consolidation look or is it kind of a roller coaster ride up and down? We want to try to control this line as much as possible on the downside. And when we make upside potential moves, we want to see big leaps into the data. All right. So let's go ahead.
Let's get into it. Uh, another slide here. So there's mainly two patterns that we see in our data, right? And so there's going to be the down wave, the capital draining down wave. You know, why I call it the capital draining down wave is because these are moments when you need to go ahead and manage your risk.
A lot of times we're going to get into battles with our own system. Why? Because even if you trade your system correctly, sometimes there's going to be tough. Where you're just losing, losing, losing, losing. It's a losing streak. And in these moments, this is when I realized that this is how you control your capital.
You need to understand when you're in these kinds of ruts, when you're in these ruts, you start taking the smallest position possible. Just trying to find out, when am I going to get out of the rut? When is the strategy? The probability. Going to come back into play smash. The, like if you guys are appreciating this kind of trading, uh, talk here, let me know in the chat.
Let's get this going. So one of the things is when we're in these down waves, we need to really control our Capital, slow it down, control it. Then when it comes back, we know that the rivers flow. Then you throw your capital holiday. What is that going to do? That's going to bring us to the up, wave the in the zone wave.
We all want to get into that in the zone wave. I'll let you know right now it happens all the time. You guys sometimes have seen me on here, money, Mitch, where I'll give and it's not to be cocky. I'll give you know, four or 5, 6, 7 winners. What is that? That means I'm on top of my zone. I'm in my zone. I know my strategy and I'm finding.
And I'm attacking and executing. That's what we want to do as traders. But then there's also going to be times where I don't have so many trade ideas. And what I tried to do is more long focus on the industries, focus on the sectors, find where we're going, not where we've been. Okay. So getting back to the, in the zone, you can only stay in the zone for so long, and this is important to understand also, so it's okay that you fall out of the zone.
And you make a bad trade or you make a mistake in your trading, just realize it. Stop control capital, and then adjust. Figure a way to adjust, to get yourself back into the zone. Peak performance is what we always are going to come back to. All right. So let's talk a little bit more about that down wave.
So Dan waves really usually are going to consist of what you're going to start seeing that you need to control it. Have a max weekly loss have consecutive losing streaks. Um, you'll see your accuracy dip below 50%. The stats are not matching the strategy when you notice that. My, my strategy usually is a two for one.
And now I'm only getting one for one. Maybe that's a good sign that my stats aren't matching my strategy and I'm heading for a down wave in my trading. Another thing that can happen is you're showing quick profit taking you're like, as soon as you get into the green, I got it. Got to take it off the tables, kind of take it out the tables because you're chasing that up wave.
You're trying to create the up wave versus letting the probability come into play and playing a factor for you. So the last thing is, is if you start noticing that you're letting loses run, if you're letting those losers run on you on the downside and you're, and you're losing more than you expect. This could be a very simple explanation of that.
You're heading into that down wave and we must control the risk. All right, let's go ahead. Let's get into the next slide here. Next slide is the up wave and the up wave comes with some good news. I mean, you'll start seeing what weekly goals being touched. You'll see consecutive profitable weeks. You'll see high accuracy.
You'll be about 60% or higher. Your stats will start matching the strategy. The risk and return will be there. If you're risking 10 cents to get 36. You actually take the 30 cents and you actually are holding to that 10 cent risk. That's what matters. That's when we're in the zone, that's when we're performing great execution.
That's when you, as a trader need to go ahead and step up to the plate and take your trades. This is the time when the river is flowing and when the rivers flowing, you gotta, you gotta. Put the big boy pants, whatever you gotta do and go at it hard, do not be afraid when your data tells you that everything's matching your strategies, matching the way that your trading is matching.
And you're noticing, Hey, I'm picking these stocks on point. Those are the times when we need to go ahead and jump on it, because what you're going to do is you're going to give yourself that little boost that boost in the returns helps you when you fall into the trap. All right guys. So that's pretty much it on the waves of trading.
But one thing that I say is, look at your trading. Fine. What happens in it? Do you have those moments where you go sideways? It's okay to come back down a little bit, but we want to always be bouncing back. And if you're not bouncing back, then you definitely need to go ahead and readjust. Take a second. To slow the Capitol down, slow the losing down and control it to understand, Hey, is it my strategy or is it my execute?
If it's my execution, then you got to go ahead and find how to execute your strategy. If it's just a probability going against you, then that's just the waves of trading. Hang on, tight, control the risk, and then master the execution. Like always guys, we're going to go ahead and continue working on these.
I want you guys to go ahead and continue working and what can we learn from this? You want to ask so we can learn that trading habits have patterns. We definitely do, and we can use our data to analyze our stats. We can use this to our advantage. By swinging bigger on the upswings. I want you to juice up when you get that nice upswing.
I want you to, it's just like a baseball player. When they're on fire. When they're on fire, you can throw me whatever you want down the plate. It could even be a ball. I'm going to put it in the stance, but we also want to control the downswings. Just like when you're a quarterback in the NFL and you're not seeing your receivers get open, you're paying attention way too much to the defenders.
You can't see the holes. What do you need to do? Sometimes you just need to check the ball off to your running back and just let him do the game because you're not seeing the game. Clearly. This is what matters a lot of the time. If you're not seeing the game, clearly you need to go ahead and adjust and adapt.
Another thing is how to approach times. Our strategy is just not producing high accuracy. This is going to happen at times. You're going to see that your strategy isn't doing what it normally does, even if you tested it before. And what you need to do is just slightly adjust in weight or look for other strategies in the meantime.
But if you're a beginner trader, this is the time that I say that you kind of go away from trading. And not try to trade every single day. I need to take every single trade of my strategy. More long. Look at it. When is the probability coming back in your favor and like always guys, I wanna see you guys surfing out there.
I want to see you guys riding the waves and, and we're all going to keep on this battle. It's not easy. We're going to keep battling and, and sometimes you're going to be riding up and sometimes guests. You're going to be riding down. Guys are going to be in the waves. You're going to feel like the waves are crashing about you and, and you don't know where to go in the trading, but I'll tell you, one thing is if you stick to your game, understand your data and look back, take your time to analyze your data.
Am I going through, what is the in the zone stage or am I going through the rut? If I'm going through the rut, I'm going to control my capital and hold it tight. Hold it close. The days that I feel executions on point, let it fly, let it fly. But definitely, definitely. I hope you guys enjoyed learning about the waves of trading.
Um, I I'll keep coming at this. And one thing I want to tell you guys is remember traders, even though the light may be small at the end of the tunnel, there is so much more that's waiting for you.
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