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making confident day trading decisions

Can you make a persuasive argument for your trades?

A good portion of my mentoring is assessing whether or not a trader is improving at making good decisions. You would think that the first thing I would look at is a traders P&L. I can understand why someone may expect that to be my top priority but as a veteran trader I can tell you that P&L alone does not always tell the story.

This article was inspired by two incidents that occurred this week. One particular day last week was a very busy trading day. If you know anything about myself and Erik we will be the first ones to tell anyone within shouting distance if it is a tough day to trade or if volume is very light to do nothing or at the very least cut down your share size.

Well on this day it was a very good day to trade. We had a trader who was new to the office listening to me throughout the morning telling everyone to get busy. It was one of those days to “belly up to the bar” and get involved. It was a morning to make some good money. After lunch Erik called him into the back and told him you can’t be passive on a day like today, you have to sit on the edge of your seat and trade like you expect to make money.

What was his response? He sent an email after the close telling us he wanted to trade from home. Why would he do this, we were mentoring him and promising to help him improve? Believe it or not this is not the first time we have experienced this. He didn’t want anyone to critique his trading. Now mind you this is NOT an experienced trader who is earning a consistent living and he is trading OUR money. His first day trading from home I reviewed his trades for the day and his decisions were horrible.

I emailed him and asked him to send me his journal for the day so I can se what his thought process was for the days trades. It is 10 days later and I still have not heard from him. He can’t back up his decisions. He can’t make an argument. If you aren’t willing to learn, you will never improve.

The other situation happens when I bring new traders into the back room for small group mentoring. We mentor everyone on the trading floor and online but a trader can make themselves dissappear by being quiet. When I bring them into “the SHED” I force them to talk me through all of their possible trades they want to make.

When you are in The Shed, there is nowhere to hide. You must make a case to me like you are on trial. I force you to get good at making good decisions. It amazes me how often Erik and I hear “I was hoping, I don’t know why, I wasn’t paying attention to that, I didn’t see that support.”

Picture in your mind the next day you are trading. Visualize yourself in a room full of 100 traders. Now picture that you are required call out every trade you are considering to the whole room for judgement. How many of your current decisions would you call out proudly and loudly!?

Use this visualization technique to improve your decision making ability and I will guarantee your P&L will become very consistent.

Take my advice, don’t hide behind your monitor and try to figure it out on your own…..ask a question!

Pete
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