Trader Mindset

When bad news hits the tape everything is correlated and it always works against you.

You have to be careful that parts or segments of your portfolio don't become "one big trade."

Study the correlation risk between instruments and modify your position sizes in your trading system and portfolio accordingly.

Since instruments can behave similarly, you can inadvertently end up with the financial effect of over 100% of the risk you think you have. 

This will cut your vol and smooth out your equity curve.

Two Free Offers:

Tony Saliba's Options Playbook 

Inner Voice of Trading Audiobook

Consistency is the key to your success as a trader. You might have to learn to deal with the monotony in order to do so.

New York Yankee Closer Mariano Rivera had one pitch that he relied on - a cut fastball - and although the opposing teams knew the pitch was coming, he was very effective at what he did.

Rivera has the most Saves in the history of MLB.

You can reduce your activity to what creates alpha and trade set ups that have positive expected value.

Be economic in your activity b/c you'll also need to conserve your energy. It's a marathon, not a sprint.

Do one thing very well, create alpha, and keep losses small and you'll have a long career.

Get your free copy of the Inner Voice of Trading Audiobook.

Consistency is the key to your success as a trader. You might have to learn to deal with the monotony in order to do so.

New York Yankee Closer Mariano Rivera had one pitch that he relied on - a cut fastball - and although the opposing teams knew the pitch was coming, he was very effective at what he did.

Rivera has the most Saves in the history of MLB.

You can reduce your activity to what creates alpha and trade set ups that have positive expected value.

Be economic in your activity b/c you'll also need to conserve your energy. It's a marathon, not a sprint.

Do one thing very well, create alpha, and keep losses small and you'll have a long career.

Get your free copy of the Inner Voice of Trading Audiobook. 

Inner Voice of Trading Audiobook - FREE

You have to conjugate your feelings with what it is you think you know about trading. If they don't "feel" good, you won't take the signals and you'll spend a great deal of time second-guessing yourself.

When you do that, it's emotional not intellectual. You are insecure or lack confidence in what you do.

This book discusses how I failed my way to success so to speak in sometimes painful detail.

Persistence and determination have a great deal to do with your success in trading, and in most things in your life.

For a limited time, get the audiobook for free - no coupon codes.

Foreword by Ed Seykota.

Inner Voice of Trading Audiobook - FREE

You have to conjugate your feelings with what it is you think you know about trading. If they don't "feel" good, you won't take the signals and you'll spend a great deal of time second-guessing yourself.

When you do that, it's emotional not intellectual. You are insecure or lack confidence in what you do.

This book discusses how I failed my way to success so to speak in sometimes painful detail.

Persistence and determination have a great deal to do with your success in trading, and in most things in your life.

For a limited time, get the audiobook for free - no coupon codes.

Foreword by Ed Seykota.

A purchase of 5,000 calls could be part of a synthetic options position.

Why would it be bullish if the trader actually sold 500,000 shares short and used the calls to hedge?

You can use Tony Saliba's option trading simulator to backtest your ideas.

Become a student and get immediate access.

Get Tony's most recent book for Free.

A purchase of 5,000 calls could be part of a synthetic options position.

Why would it be bullish if the trader actually sold 500,000 shares short and used the calls to hedge?

You can use Tony Saliba's option trading simulator to backtest your ideas.

Become a student and get immediate access.

Get Tony's most recent book for Free.

Don't cauterize your winners. Let them run.

Position size your trades so that you can stay with them as long as possible. You can trade smaller if the vol is bothering you. Then backtest to see how the results would have played out.

You can blend two or more systems to smooth out your trading curve. Adjust your positions by conjugating them with the ATR.

Trade smaller with higher vol instruments and larger with lower vol instruments. Always risk the same amount per trade.

Make sure you are taking on enough risk to meet your financial goals.

You can haircut your equity when you are in a drawdown.

Trading using tiers for position sizes is amateurish as you inadvertently trade larger or smaller than what your optimal risk should be.

Optimal risk per trade can be calculated from backtesting.

Trade with consistent position sizing so that you are only risking the same percentage for each instrument.

One or two percent per trade is extremely aggressive in today's world. Think more along the lines of .1 to .2% per trade.

Don't cauterize your winners. Let them run.

Position size your trades so that you can stay with them as long as possible. You can trade smaller if the vol is bothering you. Then backtest to see how the results would have played out.

You can blend two or more systems to smooth out your trading curve. Adjust your positions by conjugating them with the ATR.

Trade smaller with higher vol instruments and larger with lower vol instruments. Always risk the same amount per trade.

Make sure you are taking on enough risk to meet your financial goals.

You can haircut your equity when you are in a drawdown.

Trading using tiers for position sizes is amateurish as you inadvertently trade larger or smaller than what your optimal risk should be.

Optimal risk per trade can be calculated from backtesting.

Trade with consistent position sizing so that you are only risking the same percentage for each instrument.

One or two percent per trade is extremely aggressive in today's world. Think more along the lines of .1 to .2% per trade.

You enter and exit the market with stop orders.

No need to be anal and use Limit orders - they make the order less liquid. Your goal is to let the market come to you. Trading otherwise is impulsive.

Love yourself and stop looking at 10 minute bars. There's nothing material there. Trading is about making money, not the action. Buying and selling is not trading.

Sometimes the best trades are ones you don't get filled on.

Don't chase the market.

If it stalls, you'll go head-first into the back end of it.

Use protective stop orders 100% of the time.

Trail the market with stops in winning trades and reinvest your gains into the stop order.

Your stop price is the point where you are willing to transfer the risk to someone else.

You are not smart enough to have price targets. Humans suck at prediction.

Technical analysis is no more scientific than economics at large.