We trade to win and most traders define a ‘win’ as a trade that makes money. But in my experience most aspiring traders over-focus on the money, which, paradoxically, causes unnecessary losses. I call this vicious circle the Money Trap.

Let me explain.

In trading and in life, money is a ‘hot topic’. A study of 4,500 couples revealed that arguments over money are by far the top predictor of divorce. Why? In marriages, arguments about money trigger core security and self-worth issues. As so it is in trading.

In trading, two things happen to those who over-focus on money.

First, you will trigger your biological imperative to avoid taking the loss, because your security is at stake. That’s when then things get slippery and you will be tempted to trade-not-to-lose. This means you will not manage your trade according to any rational rules.

Second, when we are overly preoccupied with money (security), our field of attention narrows down (tunnel vision), so that we are very likely to miss the obvious. We will micro-focus and micro-manage our trades. This loss of perspective will get us shaken out of good trades and our self-esteem will plummet.

Trading well requires that we condition ourselves to do the opposite of what human nature urges us to do. It’s not easy, but changing just this one thing about your trading could make it possible for you to stay in winning trades longer.

Rx: To avoid the Money Trap, consider putting some tape or a piece of paper over your P&L and trade without reference to it until the end of the day. Along with that tactic, shift your attention from ‘the money’ to your Method and define a ‘win’ as a trade in which you carefully followed your rules, regardless of the monetary result. By doing this, your security and self-worth are not at stake with each and every trade. Then you can trade-to-win and not sabotage yourself.

This is to Ty199. I have subscribed to Mike's site for number of years, but I almost never respond to posts. I received an email that I must respond in some way to not get canceled from futures.I/O. So I clicked onto the site where I saw your question. I almost did not respond to your dilemma which I would define as a losing trader for nearly 4 years, and that you're asking for help because you do not know where to turn. The issues that led to your failure are legion, and most of the causes will seem almost impossible to understand if indeed you have been trading for four years and have lost money. It is impossible to give you a solution on one simple post without knowing more about you. It is not just an issue of being underfunded, or having the wrong system, or having no practical understanding about how markets work, there are some issues about you, and perhaps a lack of understanding about how you process information and are unable to apply this insight to a profitable outcome.

I have been around the markets since I was 31, and in just over two weeks I will be 70. I have never read markets better in my life than I read markets now. I am a highly educated man, and I am successful and I don't need to make another dime in my life. Yet, nothing has been more challenging than learning what I needed to know to trade markets. In my not so humble opinion there are very few traders who can read a market better than I do, and it didn't come cheaply, it took me nearly 40 years, and I am still learning.

I am going to give some advice, and I don't know how to give you a complete answer because one fact needs to be determined, and I can't do that for you. you may not ever be a good trader because you don't have the personal insight, the tenacity, and a proper approach to developing your skills. You may not have the conviction to seek out and change the reasons for your failures thus far. You may not have the capital. This is not meant to be harsh. There is reality. When I practice medicine, one of the many things I've done in my life, I never told a patient dying of a terminal illness that everything was going to be all right and that they would get better. There are realities to success and failure. The good thing is you're not mentioning that you have a terminal illness and that means you have a chance. Extending my analogy, I can't tell you what your solution is because I don't know your problem, and from a trading point of view it's impossible to know what you need. From a probability point of view, you need much more than a trading system. There is something about you by the nature of your story that indicates this. So that we are perfectly clear, there is nothing unique to you as I have had my issues, and I chose to work this out over a period of almost 40 years.

I don't wish to violate any of the rules of this site. If there's something that I've said, or there's something inappropriate about the solution I will offer, I would expect Mike to delete my post. The fact is while I know how to read markets and I understand the dynamics of markets far better than most people as best I can tell, I don't even know if I'm posting on the correct link here, one of the issues with old age. I have no website, I have no commercial venture in trading other than trading my own account, I have no interest in the mentoring business, and to be honest, if you did, you couldn't afford me. Last year, a couple of old friends it turns out... have been trading for nearly 30 years, but they weren't making money in markets. I decided in a gesture of friendship to send them videos in a public forum, and this turned into about 300 videos ( to my shock) and about 900 followers which is even more shocking. I do not make a penny from this... as I did it to help two of my friends who are about my age.

I have to be very careful what I say here, because most people who offer advice, including some of the advice you are being offered is not what's going to work for you, but this form doesn't allow for me to address those issues.

Since I like to play by the rules, if Mike cares to hear where I post, but Mike will be familiar with that site, I would be happy to give him that information and he can decide if it's appropriate to post that information on this site, or to you directly. I don't know what 900 people are doing in their own trading, but I know one of my students who is well-funded and has had marginal success until recently, is doing phenomenally... actually in markets that I do not trade as my interest is in futures markets. It is about how to think, seeking objectivity...in addition to understanding markets and their traps.

This is to Ty199. I have subscribed to Mike's site for number of years, but I almost never respond to posts. I received an email that I must respond in some way to not get canceled from futures.I/O. So I clicked onto the site where I saw your question. I almost did not respond to your dilemma which I would define as a losing trader for nearly 4 years, and that you're asking for help because you do not know where to turn. The issues that led to your failure are legion, and most of the causes will seem almost impossible to understand if indeed you have been trading for four years and have lost money. It is impossible to give you a solution on one simple post without knowing more about you. It is not just an issue of being underfunded, or having the wrong system, or having no practical understanding about how markets work, there are some issues about you, and perhaps a lack of understanding about how you process information and are unable to apply this insight to a profitable outcome.

I have been around the markets since I was 31, and in just over two weeks I will be 70. I have never read markets better in my life than I read markets now. I am a highly educated man, and I am successful and I don't need to make another dime in my life. Yet, nothing has been more challenging than learning what I needed to know to trade markets. In my not so humble opinion there are very few traders who can read a market better than I do, and it didn't come cheaply, it took me nearly 40 years, and I am still learning.

I am going to give some advice, and I don't know how to give you a complete answer because one fact needs to be determined, and I can't do that for you. you may not ever be a good trader because you don't have the personal insight, the tenacity, and a proper approach to developing your skills. You may not have the conviction to seek out and change the reasons for your failures thus far. You may not have the capital. This is not meant to be harsh. There is reality. When I practice medicine, one of the many things I've done in my life, I never told a patient dying of a terminal illness that everything was going to be all right and that they would get better. There are realities to success and failure. The good thing is you're not mentioning that you have a terminal illness and that means you have a chance. Extending my analogy, I can't tell you what your solution is because I don't know your problem, and from a trading point of view it's impossible to know what you need. From a probability point of view, you need much more than a trading system. There is something about you by the nature of your story that indicates this. So that we are perfectly clear, there is nothing unique to you as I have had my issues, and I chose to work this out over a period of almost 40 years.

I don't wish to violate any of the rules of this site. If there's something that I've said, or there's something inappropriate about the solution I will offer, I would expect Mike to delete my post. The fact is while I know how to read markets and I understand the dynamics of markets far better than most people as best I can tell, I don't even know if I'm posting on the correct link here, one of the issues with old age. I have no website, I have no commercial venture in trading other than trading my own account, I have no interest in the mentoring business, and to be honest, if you did, you couldn't afford me. Last year, a couple of old friends it turns out... have been trading for nearly 30 years, but they weren't making money in markets. I decided in a gesture of friendship to send them videos in a public forum, and this turned into about 300 videos ( to my shock) and about 900 followers which is even more shocking. I do not make a penny from this... as I did it to help two of my friends who are about my age.

I have to be very careful what I say here, because most people who offer advice, including some of the advice you are being offered is not what's going to work for you, but this form doesn't allow for me to address those issues.

Since I like to play by the rules, if Mike cares to hear where I post, but Mike will be familiar with that site, I would be happy to give him that information and he can decide if it's appropriate to post that information on this site, or to you directly. I don't know what 900 people are doing in their own trading, but I know one of my students who is well-funded and has had marginal success until recently, is doing phenomenally... actually in markets that I do not trade as my interest is in futures markets. It is about how to think, seeking objectivity...in addition to understanding markets and their traps.

@Ty199

Have you tried mindfulness and meditation practice to help with focus and concentration?

I have kinda, the Dr. had me do some but it was hard to even do that. Maybe because he had me doing breathing lessons for like 10 min at a time starting out. But I still start to think about so much stuff and loose focus on what i was doing. Honest I really not for sure if I know what mediation is to an exact point of what to do.

It looks like you have the ADX on top of MACD. So, instead of these lines converging when /CL forms a bottom, they are opposite of each other. It really does not make a lot of difference, but if you can have the MACD on top of the ADX it would be much easier to see the lines converging first at almost the exact bottom of /CL and then start getting away from each other. Let me try to attach a chart from another platform that makes it easier to see the setup.


ADX_PPO_HomeDepot


ADX_PPO_051020


I attached two charts with the setup. One is for Home Depot (HD) and the other is for Caterpillar (CAT). On these charts, the PPO, or in your case MACD, is on top and the yellow line is the 9-period average. On the bottom chart is the ADX with +DI/-DI and the blue line is the ADX line. As you can see, I hope, as the bottom is forming on these daily charts, the yellow line comes close to the ADX blue line. This is the warning of a setup getting ready to trigger LONG. The trigger is when the +DI green line CROSSES over the -DI red line. When this happens you go LONG the very next day, or sometimes towards the close of the same day if you see these two lines are about to cross. It is a little bit aggressive, but with a tight stop you can enter the trade. I will try to use TOS to see if I can setup the chart my way. I thought that TOS had the PPO indicator, well I will check it out. There a few tips as to how to use these two indicators together for entering a trade, but let's go one step at a time so you don't get confused. Get this setup working now and later we can discuss the refinements of using these two indicators. Let me know if you need some more clarification of the setup. Good luck and Good money. In my opinion it is better to use this setup from hourly charts and up. Don't use on less than 30 minute charts. For a good profit always go to higher time frames.

This is a cool set up, I couldnt find the PPO on TOS. But I am trying this out now. I dont know what I was thinking when you said put the DI on top of the macd LOL. I put it all in one spot on top of each other and it looked like a scribble match LOL. But so far just practice, 3 trades 1 loser 2 wins. The loser I did got in late and it was a small move and topped before I took profit. On the ES 1 contract had a 200$ trade. Ia m going to play with this more and see if I can get a good system going. I may change a few things and try them also, but going to mess with this and see what I can do. Thank you. I like it so far and seems pretty simple and easy to understand !