Today was a great example of how distractions affect your trading. This happens to all traders because waiting for a trade setup can be quite boring.
How Distractions Affect Your Trading
Well, here I am again. I come check the market after being distracted for a few minutes only to find that the market has moved and, upon further examination, there was a very nice Volume Divergence play in the NASDAQ futures.
If any of you have ever watched the movie “Up” an animated story about an old man chasing his youthful adventures that were put off because of the responsibilities of life. In the movie he runs across a pack of dogs that have translators in their collars so they can speak human. Often these dog are talking away only to suddenly be distracted by a squirrel or a bouncing ball. Many times this describes my trading, easily and often distracted by a news story, a visitor, some unforeseen circumstance, or even a random thought. Something, anything, that takes my mind to another place other than the market and the movement of the market. Even writing this blog can be a distraction just as reading this blog can be a distraction.
The reality is would a boss allow me to endeavor into such an lack of focus and detraction? Answer: absolutely not!!! As traders we must embrace the wonderful opportunity of flexibility, as well as, the wondrous responsibility that we have running a business and, as such, must be disciplined and hold sacred that if we don’t do our work effectively and responsibly we will not eat….eventually! In other words we have to identify how distractions affect your trading and prevent this from happening.
So then if not trading or poor trading will cause us all to eventually get a real job why not treat this as a real job? A real job with business hours, limited distractions, and being accountable to the inner boss. This discipline and focus will yield a successful business with nearly limitless possibilities and potential. After all isn’t possibility and potential really the reason we are involved in such a business.
Well, I have used the term business a whole lot in the little blog to drive home the point, to myself as well as the reader, that we must treat this opportunity as a true business with hours of operation, goals, plans to achieve the goals, written trading plans, assessments of our capitalization and all the things that are involved with running a business. We here at THD are not going to feed you a bunch of pie in the sky notions about no losing trades (because there will be losing trades), easy work (because often there is too much work and hard too, not to mention lots of study time).
We are going to be real with you and tell you what it’s going to take to get to the profitable side of being a trader. We will help you by guiding you with tools to understand and become successful, the education to help you apply the tools, and, last but not least, YOU, since we believe the most important part of trading is YOU. We will work with YOU to help YOU respond to distractions, losing trades and the issues that come with trading.
Now for the trade…….
On the chart, there was a retest of the low on the 45 minute NASDAQ, with divergant volume. This showed up on the 45 minute and the lower time frames gave a nice low risk entry with a high reward to low risk ratio….a very nice MISSED trade thankfully there are always more trades coming we must simply wait and FOCUS!
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