Super Trader

INTRODUCTION The Five Steps to Consistent Profits . . . . . . . . . 1

PART 1 Working on Yourself: The Critical Component

That Makes It All Work. . . . . . . . . . . . . . . . . . 11

The Components of Trading Well . . . . . . . . . . . . . 12

Do an Honest Self-Appraisal . . . . . . . . . . . . . . . . . 16

What’s Your Trading Type? . . . . . . . . . . . . . . . . . . 22

Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Do What You Love. . . . . . . . . . . . . . . . . . . . . . . . . 31

Personal Responsibility . . . . . . . . . . . . . . . . . . . . . 33

What Are Your Excuses? . . . . . . . . . . . . . . . . . . . . 36

Empower Yourself . . . . . . . . . . . . . . . . . . . . . . . . . 39

Write Down Your Beliefs . . . . . . . . . . . . . . . . . . . . 41

Enjoy Your Obstacles . . . . . . . . . . . . . . . . . . . . . . . 45

Trade through “Mindfulness”. . . . . . . . . . . . . . . . . 48

Make Friends with Your Inner Interpreter . . . . . . . 54

Learn to “Dissociate” . . . . . . . . . . . . . . . . . . . . . . . 58

Achieve Balance in Your Trading/Investing . . . . . 61

Overcoming a Stuck State of Mind . . . . . . . . . . . . 63

Does Failure Motivate You?. . . . . . . . . . . . . . . . . . 66

No Requirements to Be Happy. . . . . . . . . . . . . . . . 69

Vitamins for Your Soul to Improve

Your Trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Discipline in Meeting Your Goals . . . . . . . . . . . . . 87

Removing Stored Charge . . . . . . . . . . . . . . . . . . . . 90

How Do You Know When You’ve Done Enough

Self-Work? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

PART 2 Developing a Business Plan: Your Working

Guide to Success in the Markets . . . . . . . . . 97

Have a Plan for Your Trading/Investing. . . . . . . . . 98

Having a Mission Statement behind Your Trading

Is Critical to Your Success as a Trader . . . . . . . . 101

What Are Your Goals and Objectives?. . . . . . . . . . 106

Market Beliefs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Understanding the Big Picture . . . . . . . . . . . . . . . . 113

What Are Your Tactical Trading Strategies? . . . . . 119

How Will You Achieve Your Objectives through

Position Sizing? . . . . . . . . . . . . . . . . . . . . . . . . . 120

Dealing with Your Challenges . . . . . . . . . . . . . . . . 121

What Are Your Daily Procedures? . . . . . . . . . . . . . 123

What Is Your Education Plan? . . . . . . . . . . . . . . . . 125

Worst-Case Contingency Planning. . . . . . . . . . . . . 126

Mentally Rehearse Your Disaster Plan. . . . . . . . . . 129

Systems Other Than Trading Systems . . . . . . . . . . 131

The Four Quadrants . . . . . . . . . . . . . . . . . . . . . . . . 134

PART 3 Develop a Trading System That Fits

Each Market Type You Plan to Trade . . . . . . 139

Designing a Trading System That Fits You . . . . . . 140

Trading Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Setups Are Not as Important as You Think . . . . . . 146

Entering the Market . . . . . . . . . . . . . . . . . . . . . . . . 148

The Source of the Myth of Stock Selection . . . . . . 151

Exits Are the Key to Making Money . . . . . . . . . . . 153

Exiting a Trade beyond the Initial Stop . . . . . . . . . 156

Start Thinking in Terms of Reward and Risk. . . . . 158

One of Your Most Important Tasks: Keep Up

with the R-Multiples of Your Trades . . . . . . . . . 161

Six Keys to a Great Trading System . . . . . . . . . . . 167

Common Elements of Success . . . . . . . . . . . . . . . . 169

The “It Didn’t Work” Mentality . . . . . . . . . . . . . . . 171

Trading Reality Check . . . . . . . . . . . . . . . . . . . . . . 174

What It Takes To Have Confidence . . . . . . . . . . . . 176

PART 4 Understanding the Importance of

Position Sizing . . . . . . . . . . . . . . . . . . . . . . . . 179

System Quality and Position Sizing . . . . . . . . . . . . 180

Position Sizing Is More Important Than

You Think. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Three Components of Position Sizing . . . . . . . . . . 189

THE CPR Model for Position Sizing . . . . . . . . . . . 191

Position Sizing Basics . . . . . . . . . . . . . . . . . . . . . . 194

Types of Equity Models . . . . . . . . . . . . . . . . . . . . . 197

Different Position Sizing Models. . . . . . . . . . . . . . 200

The Purpose of Position Sizing . . . . . . . . . . . . . . . 202

One Way to Use Position Sizing to Meet

Your Objectives: Simulation . . . . . . . . . . . . . . . 204

The Problems of the R-Multiple Simulator . . . . . . 207

Getting Around the Problems of Simulation . . . . . 209

PART 5 More Ideas for Producing Optimal Trading

Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 211

Keep It Simple . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

Understanding the Holy Grail of Trading . . . . . . . 214

Miscellaneous Ways to Make Money in

a Trading Business . . . . . . . . . . . . . . . . . . . . . . . 217

Avoid Making Predictions in the Market . . . . . . . . 220

Mistakes and Self-Sabotage . . . . . . . . . . . . . . . . . . 222

How to Prevent Mistakes . . . . . . . . . . . . . . . . . . . . 224

How Not to Repeat Mistakes . . . . . . . . . . . . . . . . . 226

You Cannot Ignore the Fundamentals . . . . . . . . . . 227

The Answers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229