Trading Theory

Be Careful What You Wish For

Aug 15th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
Whenever I’m considering working with someone, I always ask a series of questions. One of the questions I ask is “Why are you trading?” I bet it wouldn’t shock you to find out the number one answer is “I want to make more money!” which is the wrong reason by the way but I accept it and continue on. My follow up question is “Why do you want to make more money?” There are often multiple responses to this one but after further questioning , for most people, it boils down to two things, “I want money because it will make me happier” and/or “I want money because it will make me secure” . Again, both poor Read more [...]


Less is More

Aug 8th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
As I sit here looking at the 400 emails I’ve gotten this morning, I’m reminded of the massive amount of information we need to sift through on a daily basis and how all that information affects our journey as traders. I grew up with the belief that” knowing everything I could know” about a subject was a good thing. After all, the more I know, the more successful I can be, right? Therefore when I decided to be a trader, I wanted to know everything. I really dove into it. And I’d like to tell you that I learned all there is to know about trading and instantly became a successful trader. But alas, the reality is quite different. Read more [...]


How Memory Affects Your Trading

Aug 4th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
The emotions we feel and the actions we take are largely dependent on how we remember things.  This is because we use our memories to learn.  We might think something like “I remember the last time this happened. I did that and got a favorable result, therefore I will do that again.” The challenge however, is that our memories aren’t as accurate as we think. Not only do we forget things but we often remember things incorrectly.  This is especially true when the memories are vivid and we’re most likely to think they’re accurate. Vivid memories are usually vivid because they happened when we were in a highly emotional Read more [...]


Training for Trading Success

Jul 25th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
Think back to the last time you experienced the opportunity to watch a world class performer, someone who really put on an amazing show. It doesn’t matter whether it was a musician, a sports athlete, an actress, a doctor or a business owner. When you see one of these performers in action, you can’t help but admire their skills. It truly is a work of art. And it makes me wonder, “How many hours, days, years or even decades of practice and performances did it take to be able to perform at that level?” How many times have they tried to master their skills and failed before they finally got it right?” And more importantly Read more [...]


Harness the Power of Your Emotions

Jul 18th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
As humans we make decisions based on emotions. Of course we sometimes use logic change our decisions but our initial decision, and the one we are most likely to act upon, is always based on emotion. This is because our emotions are much more powerful and react much more quickly than our logic. Therefore, our emotions quickly send us down the path that we unconsciously think will give us the most pleasure or the least pain before we even realize what’s happening. This is why we often do things we logically don’t want to do. You see many of the challenges we have with emotion isn’t the emotion itself. The emotions are doing Read more [...]


The Power of Focus

Jul 14th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
Most traders have no idea of the amount of progress they can make when they focus all their resources on mastering a single style of trading. Controlled focus is like a laser bean that can cut through the biggest challenges that have been blocking the path to your success. When you focus consistently on the improvement of any one trading system, you develop unique distinctions on how to make that system better. A major reason so few traders achieve the results they desire is that they never concentrate on their power. Instead they dabble their way through trading trying a little of this and a little of that making no real progress Read more [...]


Properly Setting Your Trading Goals to Lower Stress

Jun 19th, 2014 | By | Category: General Comments, John Locke, Trading Lesson, Trading Psychology, Trading Theory
As traders we often set some sort of performance “goals”. We might say something like “My goal is to make $5000 per month trading”. There are problems with that goal, the biggest problem being that we don’t actually have control over how much money we make in any given trade. We might have a lot of influence on how much we make. We could utilize a variety of resources such as a good trading plan and proper position sizing but ultimately the underlying asset has to do certain things in order for us to reach our goal. Things we cannot predict and things that we have no control over. Therefore, we do not have full control Read more [...]


Trading Education: Do You Have A Methodology To Trade Gaps?

Jun 15th, 2014 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trader Development, Trading Lesson, Trading Theory
On June 4th we posted a pre-market video in which I discussed a potential "gap fill" trade in TIBX. When a stock gaps outside of the prior day's range you have three options. Play it for a continuation in the direction of the gap, play it to fill some or all of the gap, or simply take a pass on trading it.  I have found over the years that most traders consistently choose the same option each time disregarding many factors that favor choosing one option over another. Why is this the case? For many it is a lack of methodology for trading gaps. For others it may be they are just more comfortable fading stocks versus following Read more [...]


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