I was watching the ski jumping at the winter Olympics. The announcer said that it is a simple move. Everyone knows how to do it. The challenge is that the mind is telling them that it is suicide. The winner is the one that trust their own skill more…

He went on to say that the difference between the top athletes is something that does not show up in slow motion. It is between their ears and it is their confidence.

It was repeated over and over again. It is a mental game!

It was not that the athletes had perfect runs. They had made mistakes. The difference was that they did not panic. They did not focus on their mistakes and thus they won their medals….

What does this have to do with trading?

Trading is also a mental game.

When you are cutting your winners short, stop yourself. Notice if you believe in yourself and your strategy. If you do, let your trade run longer.

Also, when you are letting your losers run, it is important to cut them short. It is not about wishing and hoping that it comes back. It is about believing that there are more opportunities to come!

How are you dealing with your state of mind? Are you managing them, or allowing them to dictate your actions?

The Olympians of trading are those who can harness their attitude!

One the mangers that I have a lot of respect for, John Netto, is offering a free webinar tomorrow Jan 14.  

Following is the detail:

Going Pro: Using Your Trading Success to Manage Money Professionally
Thursday, Jan. 14, 2010 at 5PM Eastern / 2PM Pacific

Webinar Entry Link will be eMailed to Registrants Jan, 13th

All of us at Team OSOK Trading would like to thank everyone who participated in the ISE webinar discussing volatility across multiple asset classes and we would like to invite everyone to attend John Netto’s free 1-hour webinar entitled: “Going Pro: Using Your Trading Success to Manage Money Professionally” coming up Thursday, Jan. 14, 2010 at 5PM Eastern / 2PM Pacific. This webinar will go into the topics facing those looking to trade professionally, in particular, the cost metrics behind setting up a hedge fund, payout structure for prop accounts, generating a professional track record in such a way as to get recognized by allocators, marketing, creating a disclosure document, and much more. 

·       5 PM Eastern, Thursday, January 14

·       Free of Charge to attend

·       Options as a professional trader

·       Proprietary Trading

·       Hedge Fund

·       Raising Assets

·       Different web sites to put your track record

·       Seed capital, RIA, Family Offices, Pension Funds

·       Regulation

·       NFA, FINRA

·       What filings are required

·       When you must register

·       Back Office

·       How to outsource bookkeeping

 REGISTER FREE HERE

Wishing you a very happy Holiday Season and an amazing New Year!!!

Trust your year is filled with more joy, peace, laughter, health and prosperity.

We appreciate you being part of Mental Edge Trading community and allowing us to contribute to your trading success.

To start 2010 on the right track, I am inviting you to a special teleseminar to share with you what differentiates the top 5% traders from the others.

Here are the dial-in details:

Topic: What are the 5 differentiating factors of the top 5% traders from the others?

Date: Tuesday – Dec. 29th

Time: 5 PM Eastern

Dial In: 1 (218) 862-6400

Passcode: 4287433#

NOTE: We always begin promptly according to http://www.time.gov so mark your calendar and be sure to call-in a few minutes early so you’re not pre-empted by other teleseminar callers.

Here is to making trading success your habit™.

Nazy Massoud & MET team

P.S. There are still a few spots left for Consistently Boost Your Trading Profits which starts on Jan 4, 2010. Check it out at www.ConsistentlyBoostYourProfits.com

If you are a trader or investor who:

• Is ready to stop overtrading instead of cutting the winners short and letting the losers run?
• Wishes you knew the appropriate steps needed to be consistently profitable rather than spending days upon days going from one system to another, from one market to another, and from one expert to another that doesn’t bring in sustainable money?
• Is ready to get ahead of the game and become one of the 5%-10% who makes it in the trading business?

Find out how to get started

I had an interesting question from a member of our community.

He was assuming that intelligent people are the ones who are successful traders and was asking if a C student can be a successful one.

What I had forgotten to mention to him is that grade has nothing to do with intelligence. Einstein was never a good student…

Does intelligence play a role? Yes and that is not the only determinant of success.

I know some traders who are very smart and yet they are not as successful. Also, I know some traders who might not be the most innovative ones and they are very successful.

There are 10 other factors that play a role in determining your success. What are they?

1. Know yourself and your Personal Risk Profile

This helps you understand your strengths as well as the areas that you could develop.

2. Know the reason you are getting into this business

There are going to be challenging times. Knowing why you are in this business enables you to keep your focus.

3. Know your trading goals and strategies

If you are not clear, how would you know if the goals and strategies that you have chosen are the right ones for you? Do they play to your strength?

Also, you will have a hard time following a path that it is not clear. It is like driving from your home to somewhere that you might have an idea of where it is, but you are not sure. You might get there, but when?

4. Sound money management system

It is important for you to know why you have chosen the system that you have and that it fits who you are.

5. Risk management

Are you comfortable with the parameters? Can you follow it?

6. Your core influencer

It is essential to have the right selection of people that have your ear. Then it becomes easier for you to move toward your goals, instead of holding you back.

Remember, ultimately you are responsible for the choice that you make.

7. Your environment

It is crucial to have an environment that doesn’t drain your energy and allows you to flourish.

8. Perseverance

Challenging times are a guarantee. Your reaction is going to determine your results. Are you going to quit or continue?

9. Flexibility

It is one of the most crucial elements in your success. If a strategy does not work for you, be ready to modify or change it. Don’t be married to it. Ask yourself, do you want to be right or do you want to make money?

10. Willingness to learn and grow

One way to keep up is to learn and grow and not to become obsolete. Then you can have even more success in your trading business.

You might’ve heard that Michael Jordan, one of the greatest basketball players in US, was cut from his team at his sophomore year in high school. That could’ve been the end of his career.

However, he knew what he wanted. He persevered and changed his strategy. He wanted to succeed, so he was willing to learn, grow and developed the skills that he needed. He surrounded himself with the people who could help him and believed in him. The rest is history…

What is your game plan?

Here is to making trading success your habit™,

One of the things that I am hearing more and more these days is that traders are not making money consistently.

Do you know anyone with this challenge? Do you know them intimately?

So, what can you do to make money consistently?

1. Deal with your trading as a business

If you think of your trading as a hobby, then you produce the results of the hobby and making money becomes secondary.

For your trading to be successful, it is imperative to create a proven process to make it a success.

2. Have a written plan that matches who you are

This is a very important step. We want to have a proven plan that succeeds. However, if it does not match who you are, you are setting yourself up for failure. It will work for a while, but because it goes against who you are, after awhile you find reasons not to follow it.

3. Have a money management system in place

When you have a system in place, it enables you to manage your risk better thus allowing you to preserve and grow your capital on a more consistent basis.

4. Create your own daily routine

Everything we do is a routine. If you think about it, when you get up, you follow certain routines. However, most of us are not conscious of our routines. So, create one that serves you and sets you up to make money consistently.

5. Be patient

I know that some traders love the excitement of trading and once the excitement is gone, they get bored and start sabotaging themselves. Does this sound familiar?

If you are looking for excitement, find a hobby that can provide you the excitement.

This is one of the most important skills of your trading success.

6. Don’t focus on the money

By focusing on the money, you get hooked on the trade that you have placed in. Therefore, you are less likely to be in the zone and really noticing what is happening in the market.

You need to detach yourself from the result of your trade. This does not mean that you don’t care. Of course you do, and that is why you have placed your trade. It means that you are not married to your position. You are free to be in the zone and really notice what is happening versus what you hope and wish to happen.

7. Develop your Mental Edge

This is a crucial step. Stephen Covey has a 90-10 principle. He mentions that 10% of your life is determined by what happens to you. 90% of life is decided by how you react.

Events happen to us. What differentiates the super stars is how they react!!!

“Any fact facing us is not as important as our attitude toward it, for that determines our success or failure.”
~Norman Vincent Peale

Remember, this is a process. Any step in the right direction moves you closer to your goal.

“Continuous improvement is better than delayed perfection”.
~ Mark Twain

Here is to making trading success your habit™,

Have you ever heard traders say, “The market is just against me”?

The truth of the matter is that the market does not care about you. It does not care if you win or lose. It does not care if you are right or wrong. The market is neutral.

A lot of us try to figure it out and beat the market. For many men, it is like figuring out women.

This reminds me of a bestselling book called “Everything Men Know About Women” (written under the pseudonym of Dr. Alan Francis) by Cindy Cashman. It has sold over a million copies. What if I tell you that every page of it is blank? Yes, it is…

By the time you try to figure out the market and outsmart it, you usually have lost the game. Instead, if you try to be in the flow of it, then you can win.

A lot of traders think that the market owes them. Maybe they see other traders who are successful and they say to themselves, “I should be able to do the same.”

When you try to model the most successful traders, sometimes you forget the process they have gone through to get here. Every one of us can learn the basic rules. To become very good so that it becomes a habit for us, it takes practice, patience and perseverance.

Did you know that only 5% of traders are successful?

Some might say you have to be lucky. I say we need to create our own luck. The question is how do we do that?

How can you increase the odds so that you are part of that 5%?

There are 5 P’s to being a successful trader. They are:

1. Preparation

   If you are not prepared, you cannot get the results that you want. If you have not done your homework, you are not going to succeed.

   "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."

   ~ Winston Churchill

2. Perspective

   When you trade, know why you are trading that position. You can listen to others, and remember that you are the ultimate decision maker.

   I remember a client of mine who is very brilliant; he knew why he was getting into a trade. Then he would trust others much more than himself, and as a result, he would change his mind and would lose. Needless to say, he has learned to trust himself and develop his mental edge. I am very happy to say that these days he is doing very well.

   "Train yourself to let go of everything you fear to lose. . . The fear of loss is a path to the Dark Side."

   ~ Yoda

3. Practice

   One of the most important keys is to take action. You cannot be on the sidelines and expect to become an expert.

   You can learn the basics of reading the tapes, reading of the charts, and deciphering the news. However, to be really good at it, it becomes an art. It is a skill that you can develop.

   "To think is easy. To act is difficult. To act as one thinks is the most difficult of all."

   ~ Johann von Goethe

4. Patience

   Be patient with yourself. As you might have heard, Rome was not built in one day.

   "Obstacles are those frightful things you see when you take your eyes off the goal."

   - Hannah More

5. Perseverance

   It is very important to give yourself a realistic time frame when you are testing new systems or new markets.

You need all 5 keys of trading success to succeed.

“Aim for success, not perfection. Never give up your right to be wrong, because then you will lose the ability to learn new things and move forward with your life. “

~ Dr. David M. Burns

Here is to making trading success your habit™,

We all have heard about the importance of risk management and how crucial it is to our success.

However, nobody really talks about all the elements of the risk management. The most talked about risk management is market risk. Then credit risk. After that, you hear about counterparty and operational risks.

As a previous risk manager, I can tell you that all of these are important to your success. You need to look at your process and make sure that you have a great risk management system in place.

There is one element of risk management that is seldom talked about and often overlooked. This element can make or break your trading success.

Often, it is forgotten as part of the stress tests.

Have you guessed what it is?

If not, let me give you a hint. Depending on how you look at it, it can be consider part of counterparty or operational risk.

Some examples are as follows:

1. Do you have occasions when you know what to do but you don’t do it? Then you wonder what happened. You get angry and frustrated. You start losing money. If you don’t stop yourself, before you know it, you are in a deep hole.

2. Do you know of traders who have a system and know that their success is based on probabilities? However, they start picking and choosing which signal to pull the trigger on. Then they wonder why they are not making money consistently.

3. Have you ever put a trade on and immediately started doubting yourself? You move your stops, and you realize if you had just left it alone, you would be more profitable?

Have you figured it out yet?

If you have guessed that it is your mindset, you are correct.

All the above examples have one common thing – the human factor. Unless you have a completely automated system, you are the operator. Your results depend on you.

It does not matter what happens. It matters how you react to the event and where you put your focus on.

You can have the best systems in place. However, if you don’t develop your Mental Edge and are not in the zone, you are not going to execute your trades properly and thus you will lose a lot of money.

This element is so important that JP Morgan has a group called the 'Behavioral Finance Team' which deals with how mindset influences the execution of their trades.

Your action plan for designing your risk management system is:

1. Counterparty risk: Make sure your business plan matches who you are
2. Operational risk: Put yourself in a supportive environment
3. Counterparty and operational risks: Develop your Mental Edge

Risk management is vital. To ensure more successful execution of your trades and a consistent way of making money, make the above action plan part of your overall risk management system.

Here is to making trading success your habit™,