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What's Holding You Back?

Holding BackWhen trading, why do we sometimes do the wrong thing?

We have a strategy in place. A set of rules. Risk management guidelines, etc.

Yet we deviate.

It's called the AKRASIA EFFECT.The state of acting against your better judgement.

It's when you do one thing even though you know you should be doing something else.

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Words Of Wisdom From A Long Term Trader

words of wisdomThe failure rate of traders who decide to take on this profession in a full time capacity is very high. The vast majority blow up their trading capital within the first couple of years. And sometimes within months.

Then it's back to the day job.

Trading can be a humbling experience. It's not for the faint of heart. Nor for the risk taker. The adrenaline junkie. Or the impulsive who may have issues applying discipline.

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Do 'Natural Traders' Exist?

natural traderWe often hear the term 'Natural Athlete'. Or natural golfer, footballer or tennis player. Yet what about a 'Natural Trader'? You may have heard the term used in regards to a small subset of successful traders. Yet in reality, human beings are not made to trade!

Often trading requires us to go against our natural instincts and emotions. For this reason the simple act of trading successfully is difficult for the majority.

In most jobs we can take, or be in, control. We can use our education and intellect. Or apply logic and problem solving skills to create solutions and therefore rewards. 

Yet, when trading, these characteristics and intrinsic drivers are not going to make you a better trader. 

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Cutting Losses

cutting lossesOne of the hardest lessons to learn is to cut trading losses quickly.

We've all been tempted, novice or experienced trader, to override our systems. We have the desire to avoid a loss.

It's a bad move though.

Sooner rather than later the market will whack you hard. A loss that may even end your trading career!

It's psychology more than intelligence.

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10 Mantras for Trading Success

mind over matterIn my view trading success is all about 'Mind Over Matter'. In simple terms applying your mind to what matters most, then leaving the rest of the noise behind.

You can have the best strategy on the planet. Yet if your mind and personal psychology are not robust, then you'll be your strategy's weakest link.

You can't back test your psychology. Yet if you are honest with yourself, you can think back to all those losing trades when a lack of discipline was the cause of your losses. 

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Price Action Is All That Counts - Part 3

price actionIn Part 2 of our series last week, we focused on defining price action correctly.

This week let's identify aspects of price action that often get overlooked.

The first are some additions to knowing when a market is trending. The second aligns understanding the four market stages we often talk about at The Chartist which will put you right in the zone as a trader.

Both aspects are interrelated.

Firstly to define a trend.

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Be Right & Sit Tight

be right sit tightIt's hard to deny that you'll never make a large profit by taking a small profit.

Jesse Livermore, possibly the world's most famous speculator, made one of the more frequently cited quotes in the business...

“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine–that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.”

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Price Action Is All That Counts - Part 2

price actionLast week we looked at what can influence price action , specifically zones of historical support and resistance across various time frames. We also discussed moving averages as a form of dynamic support and resistance.

This week we'll look at the basic definitions of price action. This may seem simplistic yet you'd be shocked how often traders attempt to trade the wrong type of price action.

Here at The Chartist we're big proponents of Elliott Wave Theory, to our minds the best and earliest identifier of trends.

In our Chart Research services we often discuss impulsive and corrective price action.

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Price Action Is All That Counts - Part 1

price actionI've always been an advocate of price action being my leading indicator.

Those charts you see with the fancy lines and indicators can look impressive.

And they do make you feel as though the person who constructed them knows what they are doing.

We have a tendency to be impressed when something looks complicated.

Yet does complexity make you a better, more profitable trader?

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Mean Reversion Systems

Nick Radge 2018The following article is an excerpt from the Trading System Mentor Course.

Unbeknownst to most, the world's greatest investor, Warren Buffett, is actually a mean reversion investor. He buys companies well below their respective 'fair value' then waits for them to return to that valuation or higher. He will tend to only sell a company if it's price rises well above it's value. Unfortunately two issues arise. Firstly, 99.5% of the population will not wait 10-years for a company to turn around and revert to its fair value. And secondly, he bases his decisions on pure fundamentals and copious amounts of discretionary input.

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