{"id":19355,"date":"2012-06-07T13:31:28","date_gmt":"2012-06-07T17:31:28","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=19355"},"modified":"2013-03-04T14:22:06","modified_gmt":"2013-03-04T19:22:06","slug":"learn-to-process-the-noise-to-improve-as-a-trader","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/learn-to-process-the-noise-to-improve-as-a-trader","title":{"rendered":"Learn to Process the “Noise” to Improve as a Trader"},"content":{"rendered":"

I received this email from a prop trader:<\/p>\n

I’m very disappointed with the way I traded today. I had two more paragraphs written here explaining some potential causes for my under performance. When I started to write the third I realized how simple it all is. To summarize those thoughts, I get worked up and anxious when trading on the desk. It starts with my morning commute, being surrounded by so many seemingly miserable people really gets me down on my way to work. Then, when on the desk, I often have problems when I witness other traders around me reacting emotionally to their trading. Sometimes when I hear other people’s ideas I get confused by them and sometimes I actually still try to trade it \u2013 this can’t continue.<\/p>\n

What it comes down to is that I need to bring attentiveness to the forefront. When I come in every day, I have an idea of what I want to do in the market. I visualize multiple scenarios. I like to imagine, the extremes in either direction, as well as what I will see if there is no opportunity. I think about what I would do if it trades a certain way or I see a certain thing. I should really only make a trade that makes sense to me. If what I prepared for does not set up in a way I can trade it, I should not make any trades. No one is forcing me to trade, but so often being on the desk makes me feel like it’s my job to trade stocks, and if I’m not trading, I’m not working.<\/p>\n

I know how to trade. I know how to make money. I get so worked up about risking pennies that I try to anticipate moves and cheat against levels. (expletive deleted) that. I only want to trade setups that make sense to me, and I will give it 15-30 cents of risk if it is needed. I know I can make money trading 15-30 minute trends. My problems often come about when I have conviction in a stock and fight with it a million times trying to cheat for pennies. Like today in IRM, I piker’d my way out of a great trade and ruined my ability to make money by stopping out……..<\/p>\n

I need to stick to rehearse my trading plan, avoid the noise around me, and execute when the time comes. During the 80% of time I am not executing, I should be preparing myself or learning something new.<\/p>\n

Another thought keeps coming back to me. I want to try trading remote. The days I trade from home in my personal account, I do very well. Trading in a bubble may solve many of my problems and help me maintain focus. I would probably be happier as well.<\/p><\/blockquote>\n

Bella’s email response<\/strong><\/p>\n

I have heard your thoughts about the “noise” before.
\nThis is probably the 100thplus time I have read an email like yours.
\nIt is not a very well thought out position.
\nThe “noise” around you is information.
\nYou have to learn how to use that “noise” as useful information.
\nThat noise is just like a chart.\u00a0 Or the ticks. Or news.
\nRight now you are not using the “noise” to your benefit.
\nThis is something a good trader learns how to use for his benefit.
\nFor example I do not follow every idea on my desk.
\nBut I am grateful for the ideas.
\nIt is up to me to use those ideas to my benefit.
\nIt is up to me to learn to use the “noise” to my benefit.
\nSome ideas I should disguard.
\nPerhaps most.
\nBut that does not mean that overall the “noise” will not help me find more excellent risk\/reward trading opportunities.
\nJust like every time an idea pops up on a trading filter I do not trade it.<\/p>\n

Bella<\/p>\n

One Good Trade<\/a><\/p>\n

\"\"<\/a><\/p>\n

no relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"

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