What to learn about Trading from Airline Pilots

Believe it or not, trading is a lot like flying a plane. In this article we will discuss why ex-Pilots are quite often successful traders and what we can learn from them. Pilots have alot of responsibility when flying a plane. We rarely think about just how important it is for pilots to be well-prepared ahead of time with the information they will need to make good aeronautical decisions. Not only must they be careful of their flying environment but must also consider all aspects of their flying instruments to make good aeronautical decisions. Good pilots must be always be disciplined when flying, but they don’t all start with great discipline. They are taught discipline through some simple, yet highly effective means. If the pilot waits until the plane is airborne, then the pilot’s workload may become such that the pilot could be distracted by information gathering tasks when more critical tasks need to be accomplished to keep the flight flying safely. Or critical information simply may not be available to the pilot in flight that would have been available to him/her on the ground. Either case could lead to poor aeronautical decision making and cause an aircraft accident or incident. The interesting thing is that traders also face this task. In order to take a trade we must consider a number of information gathering tasks before deciding to take a trade. If we fail to gather the information correctly BEFORE we take the trade then its possible that we entered a trade that wasn’t according to our trading plan. When we fail to gather correct information often enough...

Why we’ve built our Trading Journal differently.

The Trading Consistently journal is very different then your average trade logging platform. There is good reason for this. Trading Consistently platform is based on trading psychology, NOT around trading statistics. A Trading journal should be about improving your trading. Not about data entry. Let’s face it – most trading platforms can easily track the most common statistics about your trading (ie. your win/loss ratio, your drawdown and equity graphs.) You do NOT need to keep on entering your Stop loss, Take profit and Entry levels into the platform (unless you would like to) to find this out. What IS important is what trade setups you have identified, your trading rules, your emotions, your thoughts and your logic for entering the trade. Understanding how you think and how the market behaves is most important to improving your trading. This is what the Trading Consistently platform is based on. Trading journal should prevent you from making mistakes Most trading journals are typically used AFTER a trade is entered. This is a big mistake and this does nothing to improve your trading results. From years of experience we’ve realised traders who use a good strategy and still lose money is mostly because of human trading errors (ie. not following trade plan, money management, exit plan etc) The Trading Consistently platform helps you evaluate a trade completely BEFORE you take it so you don’t accidentally miss any steps. For example, technical traders often still need to consider high impact news events before taking trades however they sometimes overlook this and realise once its too late. The Trading Consistently pre-trade checklist prevents this...

Trading Journals That Work

If you’ve been trading for any time you possibly already tried a few different trading logging apps or even some spread sheets out there. You might have even used them for some time but either didn’t review them or just lost interest in using them because they didn’t really improve your trading. I have gone through a few different ones myself before I decided to design something from scratch. I’ve also learned the importance of the content I write in the platform. As the saying goes – “rubbish in, rubbish out”. If you fill in your journal with rubbish, don’t expect to learn much about your own trading habits. However, if you fill it in with useful insights into how your feeling about each and every trade, you’ll notice many hidden gems that will reveal your own psychology without the need for expensive mentors to reveal what is so obvious. With that said I’d like to give you some guidelines on how best to use the platform: 1.Make sure the journal includes observations about you and your trading and about the markets themselves.   I’ve found that trader journals usually are skewed toward self-analysis and include little in the way of market observation.  When I began as a trader, I printed out intraday charts of each day’s action and wrote comments on these, pointing out the patterns that I wanted to watch for in the future.  After doing this for months, I sensitized myself to the point where I could see the patterns emerging in real time. The trading journal is a learning tool and a great mechanism for training...

Are you really following your trading plan?

Have you heard of the Turtle Traders? It’s possibly one of the greatest trading experiments ever done. One day in the 80’s a self made milionaire trader Richard Dennis had a heated debate with his good buddy and fellow trader William Eckhardt. You see, Richard believed that trading could be taught. William didn’t. So to settle the matter Richard decided he wanted to recruit 23 people who knew nothing about trading to learn his particular style and apply it diligently. So he did just that. After putting an ad in the local paper Richard recieved over 1000 applicants for the roles. He narrowed these applicants down to 21 men and 2 women. He gave them only two weeks training on following his particular trading style. In January 1984 after the two week training ended Richard gave them all a trading account and one month trial period to trade the systems they have been taught. After the trial ended Richard only funded those who had successfully traded his system with up to $2 million of his own money. But wait, let’s read that again – “Richard only funded those who had successfully traded his system“. All 23 people were given the same set of rules to enter and exit trades and they all traded the same markets, yet they all had very different results. How can the exact same system given to different people yield such different results? Why did Richard only fund those who traded his system exactly? Many people would suggest various answers for this, but I think the one answer everyone we can agree on is –...

How to trade like a Pro Trader

What makes a trader a pro trader?  Why do they get consistent results and you don’t?  What do you need to do, or need to change in order to become a professional trader? Understand how experienced traders think Professional traders don’t have God like abilities, they’re just the same as you, but they do have a firm control over their discipline and emotions.  You won’t find very many successful emotional pro traders.  We tend to suppress our emotions, particularly about money so that we don’t fear losing money. You need to get a control of your emotions if you’re going to trade like a pro trader.  You’re going to have to accept that there are going to be winning and losing trades, and that nobody, absolutely nobody can win all the time. Our success as traders, very often comes down to how we deal with losing trades.  Lots of amateurs will jump straight back into the market and try to make back every pip they just lost.  Amateurs hunt for trades all over the place, whereas an experienced trader simply waits for the high probability trading opportunities to present themselves. Pro trading style will always include a trading plan which they follow to the core as the wait for the market to present the trades, they do not chase trades. Discipline is also an essential point for pro traders.  A trader without discipline is doomed to failure, as they will constantly break their trading rules, not follow their trading plan, and more than likely risk more money per trade than they should.  As a pro trader, discipline is everything;...

What does it take to get a consistent results as a trader?

  Everyone says that psychology is the most important part of trading. So if trading is 80% psychology, what makes uppsychology?  I believe psychology can be broken down into two parts:  patience and discipline.  This article focuses on discipline, and why it is so essential to your trading success.   A disciplined trader gets consistent results One of my mentors once told my ‘If you can’t follow a set of rules, you’re going to find trading very difficult indeed.’ How right he was!  Trading profitably requires following a set of rules.  Rules that over a sample of trades gives you high probability entries into the markets, in order to make a profit. It does not guarantee that you will win every trade, rather over a sample of trades, have an edge in the market, and expect to generate profitable results.   The First Step… The first step is an obvious one but often overlooked which is to write down your precise trade plan. Only when you define your exact criteria for entries and exits, money management and trade management plan will you have any chance of even evaluating whether a system is profitable or not. Most traders just assume they know their trade plan because they have read it in forum or been taught it via education companies but few still bother to define it correctly which leads to sloppy habits and inconsistent trading. You can define your trading plan within minutes through the drag-and-drop interface of the TradingConsistently platform. This simple step alone will differentiate you from most of the losing traders out there.   The Second step…. You need of course...