TRADING TO A MASTER

1. The Path To Becoming A Master Trader
A question I hear and a situation I face myself on occasion is "I had a setup
to enter the market and I found it very difficult to pull the trigger, why?" I
would like to address this issue and then write about simplicity in trading on
your way to becoming a Master Trader.
The majority of trading success comes from the mental side of trading not
the strategy like most aspiring traders assume. Just like any endeavor worth
pursuing you must learn the proper way to trade first and then practice,
practice, practice... In my opinion trading success breaks down like this:
Psychology = 85%
Risk Management = 10%
Strategy = 5%
Psychology is so important for a trader to be consistently profitable. For this
very reason Online Trading Academy offers courses on trading psychology.
After you learn the mechanics and fundamentals of trading (left brain
training), the real work begins. We must understand ourselves and how we
will react to certain market conditions. Traders must also train their intuitive
mind (right brain training) to help them identify profitable trading patterns
on a consistent basis. In class we instruct students on how to spot
supply/demand levels. This takes time to train the mind what to look for on
the charts. Risk management is very crucial to your success in trading, but
without the proper mental state of mind even the best risk management
won't help you much.
Strategy seekers are people coming into classrooms and internet websites
looking for the Holy Grail of trading, like there is some magical formula or
secret that everybody knows but them. I see this too often and honestly it
amazes me that people really believe all this hype about trading systems
that make millions of dollars for just $29.95. If trading were really that easy
the unemployment rate in the United States would not be at 8%.

2. Recently I was reading an excellent book called "Trading from Your Gut" by
Curtis Faith. Curtis was one of the original Turtle traders that Richard Dennis
trained and later went on to make millions in the markets. What first
sparked my interest in this book was the concept of trading from your gut
and how all these Turtle traders were taught a very mechanical trading
system to extract millions from the markets. Using a mechanical trading
system requires extreme discipline in order to keep placing trades no matter
how many losses you have in a row. For most traders this is impossible to do
because our respect for money gets in the way. I mentioned earlier about
systems that you can buy for $29.95, trust me this is not one of those
systems. Curtis does an excellent job explaining why we have trouble pulling
the trigger on trades sometimes. He starts out explaining how computers
were once thought to be able to think like the human mind only faster. To a
degree they can, but when it comes to finding chart patterns
(supply/demand levels being one of them) the computer performed very
poorly at this compared to the human mind. Computers are designed to be
logical, not fuzzy. Our brain has the capability to be intuitive and logical. The
right side of the brain is used for our intuitive side thinking (spotting
repetitive patterns) and our left side of the brain is used for our logical
thinking (structure and logic). The problem most traders have is we are left
or right brain dominant. This is where the problem begins with not only
trading, but in other aspects of our lives as well.
To become a Master Trader we must allow the right brain to work as a team
with the left brain. If one side or the other is dominant you can expect
problems in making consistently profitable decisions when it comes to
trading.
Our right brain is the one who sees recurring patterns on our charts. Just
like watching a movie many times we can anticipate that when we see
market patterns that we know what will happen next. Where does this
assumption come from? The answer is your gut. Intuition comes from here

3. and should not be confused with emotions. There is no place for emotions in
trading, but intuition comes with practice and time.
Our left brain does all the logical thinking for us. It wants a logical reason
before it can allow itself to respond to a situation. For this very reason when
the right brain sees a pattern that it has identified the left brain will not let
you respond to the setup because it cannot see a logical reason for taking it.
This is why traders have a hard time pulling the trigger because the left
brain does not have a logical reason for the trade setup.
Training our left and right brains to work as a team is very important. The
right brain is far more advanced than the left brain gives it credit for, but
without a logical reason to react the left brain will shut down any ideas
coming from the right brain.
In order to train our minds to work together we must be rule based to
satisfy the left brain and able to identify patterns on charts to satisfy the
right brain. If we create rules for these patterns we are identifying then
when it comes time to make a decision both brains will be satisfied and an
instant decision can be made.
Later in the book Curtis discusses some lessons he learned about keeping
trading simple, which echo many of the lessons we teach in our courses:
Trade with an edge - whatever market strategy you decide to use
look for it to have something that gives you an advantage over other
traders. One way to making money in the markets is having this
edge. A strategy that has a proven profitable track record and sound
rules are what you are looking for.
Manage Risk - Futures markets have a lot of leverage and many
traders find themselves trading with so much risk that they are
capable of losing all their trading capital in just a handful of trades.
Look to only risk 1-2% of your total account value on any one trade.

4. Be Consistent - Once you identify a strategy that gives you a winning
edge you must consistently use it. If you start to pick your trades and
not follow your plan you will inevitably pick the losers and let the
winners go. Plan the trade and trade the plan consistently.
Keep it Simple - Learning a simple strategy to follow the markets will
lead you to consistently following your plan. Make sure your rules are
written down and that you have back tested your strategy. Doing this
will satisfy both right and left sides of your brain. Allowing you to pull
the trigger without any hesitation.
Your goal in trading should be to become a Master Trader. This is a trader
who uses both sides of their brain to make confident and successful trading
decisions. As I mentioned earlier this will take time to practice, but if you
apply yourself you can master this challenge of trading. I received a
wonderful quote from a reader in London recently and I would like to share it
with you.
“Opportunities are never lost. Someone will take the ones you’ve missed.”
A question I hear and a situation I face myself on occasion is "I had a setup
to enter the market and I found it very difficult to pull the trigger, why?" I
would like to address this issue and then write about simplicity in trading on
your way to becoming a Master Trader.
The majority of trading success comes from the mental side of trading not
the strategy like most aspiring traders assume. Just like any endeavor worth
pursuing you must learn the proper way to trade first and then practice,
practice, practice... In my opinion trading success breaks down like this:
Psychology = 85%
Risk Management = 10%
Strategy = 5%
Psychology is so important for a trader to be consistently profitable. For this
very reason Online Trading Academy offers courses on trading psychology.

5. After you learn the mechanics and fundamentals of trading (left brain
training), the real work begins. We must understand ourselves and how we
will react to certain market conditions. Traders must also train their intuitive
mind (right brain training) to help them identify profitable trading patterns
on a consistent basis. In class we instruct students on how to spot
supply/demand levels. This takes time to train the mind what to look for on
the charts. Risk management is very crucial to your success in trading, but
without the proper mental state of mind even the best risk management
won't help you much.
Strategy seekers are people coming into classrooms and internet websites
looking for the Holy Grail of trading, like there is some magical formula or
secret that everybody knows but them. I see this too often and honestly it
amazes me that people really believe all this hype about trading systems
that make millions of dollars for just $29.95. If trading were really that easy
the unemployment rate in the United States would not be at 8%.
Recently I was reading an excellent book called "Trading from Your Gut" by
Curtis Faith. Curtis was one of the original Turtle traders that Richard Dennis
trained and later went on to make millions in the markets. What first
sparked my interest in this book was the concept of trading from your gut
and how all these Turtle traders were taught a very mechanical trading
system to extract millions from the markets. Using a mechanical trading
system requires extreme discipline in order to keep placing trades no matter
how many losses you have in a row. For most traders this is impossible to do
because our respect for money gets in the way. I mentioned earlier about
systems that you can buy for $29.95, trust me this is not one of those
systems. Curtis does an excellent job explaining why we have trouble pulling
the trigger on trades sometimes. He starts out explaining how computers
were once thought to be able to think like the human mind only faster. To a
degree they can, but when it comes to finding chart patterns
(supply/demand levels being one of them) the computer performed very
poorly at this compared to the human mind. Computers are designed to be

6. logical, not fuzzy. Our brain has the capability to be intuitive and logical. The
right side of the brain is used for our intuitive side thinking (spotting
repetitive patterns) and our left side of the brain is used for our logical
thinking (structure and logic). The problem most traders have is we are left
or right brain dominant. This is where the problem begins with not only
trading, but in other aspects of our lives as well.
To become a Master Trader we must allow the right brain to work as a team
with the left brain. If one side or the other is dominant you can expect
problems in making consistently profitable decisions when it comes to
trading.
Our right brain is the one who sees recurring patterns on our charts. Just
like watching a movie many times we can anticipate that when we see
market patterns that we know what will happen next. Where does this
assumption come from? The answer is your gut. Intuition comes from here
and should not be confused with emotions. There is no place for emotions in
trading, but intuition comes with practice and time.
Our left brain does all the logical thinking for us. It wants a logical reason
before it can allow itself to respond to a situation. For this very reason when
the right brain sees a pattern that it has identified the left brain will not let
you respond to the setup because it cannot see a logical reason for taking it.
This is why traders have a hard time pulling the trigger because the left
brain does not have a logical reason for the trade setup.
Training our left and right brains to work as a team is very important. The
right brain is far more advanced than the left brain gives it credit for, but
without a logical reason to react the left brain will shut down any ideas
coming from the right brain.
In order to train our minds to work together we must be rule based to
satisfy the left brain and able to identify patterns on charts to satisfy the
right brain. If we create rules for these patterns we are identifying then
when it comes time to make a decision both brains will be satisfied and an
instant decision can be made.

7. Later in the book Curtis discusses some lessons he learned about keeping
trading simple, which echo many of the lessons we teach in our courses:
Trade with an edge - whatever market strategy you decide to use look for it
to have something that gives you an advantage over other traders. One way
to making money in the markets is having this edge. A strategy that has a
proven profitable track record and sound rules are what you are looking for.
Manage Risk - Futures markets have a lot of leverage and many traders find
themselves trading with so much risk that they are capable of losing all their
trading capital in just a handful of trades. Look to only risk 1-2% of your
total account value on any one trade.
Be Consistent - Once you identify a strategy that gives you a winning edge
you must consistently use it. If you start to pick your trades and not follow
your plan you will inevitably pick the losers and let the winners go. Plan the
trade and trade the plan consistently.
Keep it Simple - Learning a simple strategy to follow the markets will lead
you to consistently following your plan. Make sure your rules are written
down and that you have back tested your strategy. Doing this will satisfy
both right and left sides of your brain. Allowing you to pull the trigger
without any hesitation.
Your goal in trading should be to become a Master Trader. This is a trader
who uses both sides of their brain to make confident and successful trading
decisions. As I mentioned earlier this will take time to practice, but if you
apply yourself you can master this challenge of trading. I received a
wonderful quote from a reader in London recently and I would like to share it
with you.
"Opportunities are never lost. Someone will take the ones you've missed."