DAYTRADING-DOC.com  / DAYTRADINGPSYCHOLOGY.com 

"When it comes to trading, your fears will act against you in such a way
as  to cause the very thing you are afraid of to actually happen."
  Mark Douglas, Trading in the Zone

"Your brain is hardwired to protect you from losses,
even if protecting you means engaging in behavior that produces losses."
Kenneth Reid

          Daytrading futures and forex holds the lure of easy riches, but according to statistics from  tax returns, two-thirds of active traders show net losses and only 4%  make more than $50k a year.  Whatever your level of intelligence, experience or success in life, trading for a living is likely to be harder than you expect. Why?

Daytrading puts psychological and physiological stress on the nervous system in a way that is different from other types of entrepreneurial enterprises. To trade successfully, you need to learn to do the exact opposite of what you naturally want to do. You will want 'confirmation' and certainty when there isn't any. You will want to avoid losses when you can't. You will want to know more, have more and do more, when you actually need to simplify and slow down. Moreover, trading, will amplify any character flaw you may have.  

The Risk of Ruin increases exponentially for those traders who are struggling with impulsive or emotionally-driven behavior. A letter from a daytrader that I received recently is typical. He describes:

Hesitation in pulling the trigger;
Wrong entry, often too high for longs and too low for shorts;
Paralysis of analysis;  
Inability to stay in a winning trade;  
Inability to take losses in stride and keep them small;
Revenge trading with excessive speed and size to recover from large losses, and
Inability to learn from mistakes.

  Any one of these factors will limit or terminate your trading career.  What are your weaknessness; what are your chances? Find out below.

THE  THREE  COMMON  CAUSES  OF TRADER  FAILURE

P R O B L E M  #1:  THE "TRADING TRANCE"

 Behavioral scientists know that the most powerful form of conditioning utilizes random reinforcement. Random reinforcement means that sometimes we are rewarded for doing the right thing and sometimes we are not. Rats that are randomly reinforced with food pellets for pressing a lever exhibit intense lever-pressing behaviors that produce a trance-like state of over-activity leading to exhaustion.

Traders without a plan that they can consistently execute get randomly reinforced by the market. This causes profound confusion, raises anxiety and leads to either 'paralysis of analysis' or to impulsive behaviors such as over-trading, chasing and averaging down. Clients frequently report that they know they should not do these things, but they can't seem to stop themselves.

In this trance-like state, trading starts to resemble a gambling addiction because traders don't learn from their mistakes. One trader, a high powered executive recently retired from a large software firm, lost 90% of his trading capital in 2007 by averaging down. His unwillingness to take small losses created huge losses. After a few weeks of coaching, he reported a sense of having woken up from a bad dream. 

P R O B L E M  #2:  ADULT ADD

 Trading well requires a plan. To succeed, we must have a well-reasoned rule-based system that gives us an "edge." That said, trading also relies on probabilities, not certainties, so we will have losses. Successful trading is the art of planning our risks and planning our losses. That's the hard part. Taking profits is much easier.  

If you have difficulty formulating or consistently following your own rules, you may have a condition known as Adult ADD. Adult ADD limits the ability of an individual to organize, plan and execute those plans, particularly when under stress. Adult ADD is underdiagnosed because ADD looks different in adults than it does in children. It runs on a continuum from mild to severe, so you can have it and not know it.

No one knows what causes ADD, but we do know it is correlated with brain metabolism and neurotransmitter levels. There are many ways to treat ADD, with and without prescription medications. The Free Confidential Risk Profile I offer below is similar to an ADD self-test. If you want to find out more about ADD and trading, send for my FREE ADD REPORT. Just put "ADD REPORT" in the subject line.

P R O B L E M  #3:  IMBALANCED NEUROTRANSMITTERS

The neurotransmitters in your brain must be in the proper quantity and balance in order for you to think clearly and sustain emotional stability under the stress of trading. I find that many traders need some sort of biochemical support to reach their full trading potential. I believe I am the only trading coach who specializes in helping traders with their own biochemical optimization. A simple and affordable neurotransmitter test can give you invaluable information. Over-the-counter supplements are available that have helped many of my clients (see the Danny A. testimonial below).

 

WHAT  MY  CLIENTS  SAY*

Judge for yourself.

"I have been attempting to trade the e-mini S&P for years with very limited and inconsistent success until I discovered Kenneth Reid. He has helped guide me to write a simple trading plan, focus on my system without too many confusing indicators, calmed my approach to the markets and balanced my emotional and psychological state. Now I look forward to trading each day like never before. My trading for the first full month since starting to work with Ken has produced consistent profits and resulted in my first meaningfully profitable month (105 ES points in January). February 1st resulted in 16.5 ES points...thank you! This has been a career changing event for me." Raymond. S., Winston Salem, NC .

 

"Within less than a month Kenneth helped me reduce my anxiety levels drastically and helped me gain a higher level of profitability and productivity.  He went out of his way to make sure that I walked away a better trader and more importantly a healthier and happier person.  I cannot recommend his services highly enough." William  C. San Diego, CA

For the first time in 10 years I feel like the guys who were standing at the other end of my trades taking away my money have gone elsewhere." Sol M. NYC      

"Its been going really well since we last spoke. I feel that you have uncovered the missing piece of the jigsaw that had been frustrating me for so long. I had no idea that I was battling against biological deficiencies and a condition that had consistently caused me to overtrade. The supplements have had a great impact and I feel a measurable difference in my attitude towards the markets, as well as other areas of my life. I have also re-structured my trading to completely nullify my previous tendency to overtrade. I used to get very frustrated with myself for making trades which I knew were impulsive and not part of plan and yet I found it virtually impossible to stop myself from doing it. With your help I have not traded impulsively for over a month now and the results speak for themselves when I tell you that I have only had 2 losing days in the last month and last week I had my best day for 3 months. More importantly I am able to trust myself once again. My focus and ability to ride out adverse market moves has increased dramatically and I am now once again making money on a daily basis. Thank you!"   Danny A, Austin, TX


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