Traders Mastermind

In this episode I’m diving into some of the most common cognitive biases that can affect traders: loss aversion, confirmation bias, and familiarity bias.

First, let’s discuss confirmation bias, the tendency to seek out information that confirms our existing beliefs. This can lead to a lack of objectivity and an inability to consider alternative viewpoints. I’ll discuss ways to mitigate confirmation bias and make more balanced, unbiased decisions.

Next, let’s delve into loss aversion, the tendency to avoid losses and seek out gains. This bias can lead to poor risk management, as traders may hold onto losing positions for too long, cut winners short or be too hesitant to take on new risks. I’ll explore strategies for overcoming loss aversion.

Finally, let’s talk about familiarity bias, the tendency to favour familiar markets or strategies over those that may be less familiar but potentially more logical choices. We’ll discuss how to overcome this bias and make more diversified, well-rounded trading decisions.

Join me as I explore these common cognitive biases and learn how to overcome them to make better decisions in the markets.

I’m a big fan of focusing on one thing at a time.

Trade setup, a specific market, a strategy. The laser focus helps you achieve what you want quicker, allowing you to move on to other important things.

I even talked about this from a health perspective in episode 41 when I didn’t really have a clear goal in the gym. But when I decided to focus on losing body fat first and then gaining muscle I got much closer to the physique I was looking for.

Goal-setting (like journaling) can be overwhelming. You’re focusing on so many things that would be great to achieve but often end up getting none.

But what if this time you just made one simple goal and a handful of supporting goals?

One goal that you could constantly think about each day.

Something to flash into your mind constantly that keeps your decisions in the right alignment?

In this episode, I explore the concept of easy goal setting. An alternative way to attack what’s important to you this year.

Books mentioned:

Ed Mylett - The Power of One More

Goal setting, plans, ideas, to-dos.

The end of December can become cluttered with good intentions and a big vision.

But what happens when you take things away that aren’t serving you? When you clear out the clutter and make the tough decision to only focus on the things that matter?

Just like in trading when you peel back the chart to pure price, things become more clear. You open up mental bandwidth, time and energy to move forward with the big things that have meaning.

In this episode, I look at hitting goals from a different perspective.

Have you ever read a non-trading related book and thought? “That has so many parallels with trading, I’m so glad I read that”

Yep, me too.

Often when we read something unrelated to trading, it changes the way we view ourselves and the market for the better.

In this episode, I share a handful of non-trading-related books that I’ve really enjoyed and that have had a positive impact on my trading.

Maybe you can put a few on your list for Santa Claus.

What are the biggest separators between winning and losing traders?

In this episode I discuss what I believe are the 3 most important traits of winning traders and how to cultivate them in your own trading.

Have you signed up for Trading Plan Pro yet?

Michael Katz is the CEO of online stock trading prop firm Trade The Pool.

In this episode we discuss:

• Michael’s 15-year personal trading journey 
• The psychology of trading company money vs your own
• Discovering new edge through journalling
• The biggest mistakes that he sees traders make
• Attributes of hyper-successful traders
• & much more

If you are looking to explore the online prop world and get funded, or are curious to hear from a prop firm CEO then this episode is a must!

Links:

Trade the pool https://tradethepool.com/

The 5%ers https://the5ers.com/

Trading Plan Pro https://tradingplanpro.com/

Bridging the gap between your trading knowledge and results is often the missing piece of the puzzle.

You have all the technical ability and a deep understanding of the markets but transferring that to a workable and effective strategy can be tough.

In this episode, I discuss a multi-step process for discovering a trading strategy that suits your trading style and personality.

A structured method to help fill the void between trading knowledge and results.

Too often we put ourselves in almost impossible market conditions and demand we perform.

How many times have you reviewed a bad trading day only to think:

“WTF was I thinking even trading that?!”

You got sucked into chop, tried to force trades that weren’t there and paid the price…

So often we think that more discipline is the key. 

Whilst that’s true to some extent, many times we are demanding a flawless day trading performance in a choppy, directionless, low-volatility market.

In our desire to trade we neglect to identify poor trading conditions.

We try and trade those days like every other day only to get chopped up, frustrated or worse start breaking risk rules. 

This in turn sows seeds of doubt, wrecks confidence and affects future trade performance.

In this episode, I discuss tactics to ensure you are trading under the best possible conditions. 

Doing this not only gives you the best chance of growing your equity curve but allows you to improve your discipline and trading psychology in the right environment for traders.

In this episode of the developing trader series I talk to DAX Day Trader Henry about his two year trading journey so far.

We discuss a variety of topics from tactical setups to mindset and trading psychology.

Including:

• Why becoming (uncomfortably!) specialised helped him get traction
• How the VWAP has become a key part of his process
• Ways to stay focused as a full time screen trader
• Framing the day type before the first trade
• The ‘less is more’ approach

Enjoy the episode. I hope you get a few nuggets to take away and implement in your own trading.

Overthinking kills good trades.

You’re about to pull the trigger and your mind just races with reasons why this trade might or might not work.

Worst case scenario you talk yourself out of a great trade. Only to get frustrated seeing it going your way.

Best case scenario you reluctantly pull the trigger, but are so unsure about the trade you get spooked and close the position early.

Ultimately overthinking never serves us.

In this episode I discuss a simple strategy to combat overthinking and become more decisive in your trading decisions.