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Nothing in trading is as important as your mindset… The psychological aspect of trading is extremely important and so often overlooked.

As a trader, you are dealing with money and there are only a few things in this world that carry heavier feelings than that.

Therefore it’s very easy to get caught up in the emotions related to making and losing money.

These are very real and powerful emotions that can wreak havoc on your P&L.

I went through the emotional grind of losing when I got started trading…and even now, I still have to deal with losses and losing streaks.

Every trader does…no matter how successful they have become.

So how do I keep from letting it affect my trading, as well as my personal life?

It all comes down to having the proper mindset.

 

The Power of the Mind

 

Your thoughts have a powerful influence on your life, and most of us go through life neglecting this force.

If you lack confidence or are pessimistic—it will reflect in your performance, in my opinion.

If you want to be the best version of yourself, then you can’t neglect the mental game and how it impacts your trading.

All too often when a trader goes on a losing streak… the momentum of the losses are what cause it to become a streak… Why? Because it’s in their mind…

The more losing trades, the more they are focused on losing and the mind just carries it forward…

How does this happen?

Well, directing your thoughts towards a desired outcome propels you towards that outcome… so if you are focused on failure, you attract failure… and in the midst of a losing streak, you can subconsciously be focused on losing… simply out of fear…

Thus, the key is to focus on success with a winning mindset and let your trades play out, win or lose, according to your plan.

Losses happen… Bad trades happen… that’s part of the game, so you have to be mentally prepared for that or you will find yourself in the midst of a losing streak.

A streak that will likely keep you from ever making money… you’ll make it and then you’ll lose it… constantly breaking even, or worse…blowing your account up.

To keep my mind right, I have worked out the emotions related to trading… the primary emotions being fear and greed…

Understanding them can go a long way to overcoming them.

 

Fear

 

So what is fear?

It’s simply a painful agitation in the presence or anticipation of danger.

When it comes to trading, the key word here is anticipation. I am not in any real danger when trading…other than the danger of losing money…sort of…

You see, if I follow my strategy I know when to take a loss and move on…a loss I accepted before I entered the trade.

It’s the anticipation of losing that creates fear in trading…not the actual loss itself.

This anticipation often leads to anxiety and loss of confidence…

Which then keeps us from taking on the next trade no matter how well it fits our criteria. So the reaction and steps we take to keep from losing money… are actually causing worse damage.

 

Greed

 

Bulls and Bears make money, but pigs get slaughtered. This adage refers to greedy investors trying to squeeze the last dime out of an investment, only to see it disappear completely.

We live in a competitive society based on financial insecurity. Thus people become greedy when it comes to money…at least to some extent.

That’s why no matter how much money we have in our bank account, we are never fully satisfied. We worry it might run out one day, so we constantly strive for more…

What if a major accident happens, or a financial collapse? Most people want to retire knowing they will have enough to survive…and sometimes, we simply want to compete and do better than the people around us.

Whatever it is…greed can be devastating to trading because it keeps you from taking profits and in the end the pigs get slaughtered.

With losing trades, I cut and runto prevent further losses. Hoping will get you nowhere. When you are wrong, you are wrong.

This is part of the mind-set you must have when trading. It’s good to be greedy when you are taking profits while you have them…it’s not, when greed is what keeps you from doing so.

So what can you do to overcome these emotions?

 

Create Discipline with a Trading Plan

 

Top traders have a mindset that no matter what, they will follow the plan… lock in gains, cut losses, enter on point etc… No matter what.

And they do not argue with the plan.

Every trade matters, there isn’t one that’s less important than another. When you create rules that work…you cannot question them.

Successful traders stick to their strategy…they don’t trade on a whim… they trade their edge.

This all has to do with having a plan for every trade.

When will you get in? Why? What’s your thesis for the trade? Where will you take your loss? Your Profit?

You should have a detailed plan that will keep you from making decisions on the fly.

 

Quiet the Negative Thoughts

 

The best traders are aware of the negative thoughts but don’t get derailed by them… they are able to detach from the negative, and replace them with positive thoughts.

If you have a negative thought come up…acknowledge it and then reverse it.

Let’s say you start to think: “I am never going to make it as a trader” … acknowledge it, and flip it.

Now repeat to yourself – “I will become a successful trader” – over and over… do it until that’s what you believe and feel inside.

Make this a practice and you will crush any power the negative thoughts may have had over you.

 

Practice Meditation

 

Meditation is a common theme among top performers in all walks of life.

It helps you become more awake and more purposeful about your actions. As well as, become more aware of your thoughts and emotions so you can respond, rather than react, to situations in your trading.

Practicing meditation will help you get to know yourself on a deeper level while also lowering your baseline of stress and anxiety.

It can and will help you build a powerful mental state that will take your trading to another level… as well as benefit you in all areas of your life.

 

The Mind-Body Connection

 

We all know that exercise is good for us, yet how many of you actually do it regularly?

If you don’t, you are missing out on the huge benefit from the connection between a healthy mind and body.

As you know trading can load you with stress and when your mind and body are strong and healthy, it becomes much more manageable.

Find time to disconnect from trading-related stress that can make it difficult to adopt a success-oriented mindset. Get outside, stimulate your body and mind through exercise, fresh air, sunshine, etc.

 

Grow from Mentorship and your Environment

 

Mentorship is often discussed with regard to self-improvement and trading success…

The most successful traders have mentors or hire coaches to help them stay focused, remain accountable, and hone their craft. They know this is a key ingredient to push their trading to the next level.

And along the same lines, your environment also plays a significant role in creating a healthy mindset. After all, we’re social creatures and are influenced by those around us.

If you are what you eat…that goes double for, you are who you associate with.

Surround yourself with profitable hard working traders who can teach you new things and encourage you, and you will thrive.

 

Final Thoughts

 

The psychological aspect of trading carries a lot of weight.

It’s not something you want to neglect.

It’s really a never ending battle.

But to get started…have a strategy that you are comfortable with, use proper risk management, and simply make sure you have a detailed trading plan for every trade.

Journal and review your trades to learn where emotions creep in and where you make mistakes…fix them.

Keep learning and adjusting along the way. Forever…trust me, the struggle never ends.

And if you aren’t a profitable trader yet…Paper Trade First.

Get consistent with fake money before you go live.

If you can’t follow your plan with fake money, I can assure you it can be extremely difficult if you do decide to use real money

Be smart and logical…keep your emotions at bay.

And I’ll leave you with this…

Profitable traders know what their edge is, and they exploit it repeatedly.

You won’t make a living taking random trades and changing your plans mid-trade while your emotions are running high.

When in doubt…get out…and reassess while you aren’t emotional.

Author:Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.

 

The market is trading pretty flat today…but that doesn’t mean every stock is flat.

When the market isn’t moving, it’s time to key in on stock-specific news.

When a company releases good (or bad) news, the market’s direction (or lack thereof) usually can’t stop what’s going to happen.

And today I’ve pulled up 3 stocks with their own reasons to move…company-specific news.

Do I just jump in when good news hits the wires?

Of course not…

I still follow my rules. If there’s a setup within the confines of my strategy, with proper risk/reward, I’ll take a trade.

If not…I just let it pass. There will always be another opportunity in the market, so I try not to let myself get caught up in the moment and stay away from FOMO trading.

Here’s a look at the 3 news related stocks I’m eyeing today and what I’m seeing in the charts so far.

Solid Biosciences, Inc. (SLDB)

Announced a $90 million private placement at $3.70…

The stock popped up in October when the FDA lifted a clinical hold on its IGNITE DMD Phase I/II clinical trials.

SLDB then trailed off finding support at the 200-day moving average.

In December, the stock was consolidating in the 3’s. And today it’s up significantly on a gap out of the consolidation range.

While issuing more shares isn’t always a good thing. Sometimes the capital raised is critical to the company’s growth, and that’s what investors focus on.

In this case, investors have pushed the stock up big. We’ll see what happens next.

I’ll keep an eye out for support at the consolidation range in the 3’s, and resistance at the next chart high of $4.97. Well, when I started writing this, it was under $5.

It was running so fast, it blew right through the previous chart high at $4.97 and now it’s facing the spike to $6.10 in early October, but hit resistance on its way.

I’ll have to be patient and watch for new support levels to form for better view of what’s next here.

LiveXLive Media, Inc. (LIVX)

LiveXLive Media is a platform for livestream and on-demand audio, video and podcast content in music, comedy and pop culture, and owner of PodcastOne.

Yesterday the company announced that its board of directors has authorized the repurchase of up to two million shares of its outstanding common stock from time to time.

So it’s not that it is automatically buying them, but that they are authorized to do so…and the CEO commented that they don’t believe the current stock price reflects the value of the company.

On that news, the stock popped out of a flag pattern today, trading at about $3 at the moment.

LIVX stock was trending down since July before forming the flag pattern going into this announcement.

It’s trading close to the next chart high of $3.26, so I will likely just keep an eye on it for now to see how it reacts at this level.

BioCryst Pharmaceuticals, Inc. (BCRX)

On December 4, BioCryst (BCRX) stock gapped up after receiving FDA approval for Orladeyo, a once-daily orally administered non-steroidal option for preventing hereditary angioedema attacks.

It continued that move for a few days before consolidating stalling out near $8, making a new 52-week high in the process.

Today BCRX broke above recent highs.

With news being favorable lately and a short interest of 21%, it has the possibility for some bulls to put a squeeze on the shorts.

I’ll be watching it this afternoon to see if volume picks up and whether it can hold the highs or not.


Today’s Stocks To Watch

VTVT +54%

UAMY +17%

TRCH +17%

XXII +16%

AMPE +16%

AESE +15%

ARDX +13%


 

Author:Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.

If you missed it…

GLSI ended yesterday up 998%…from a $5.20 close on Tuesday to a $57.10 close yesterday.

But that’s not the craziest part…

GLSI hit an intraday high of 158.07, so at one point the stock was up over 2,900%.

 

 

I wouldn’t doubt it if many traders lost their shirts trying to short it all the way up.

And that is exactly why I stick to trading on the long side with penny stocks. Getting caught up in a move like that on the wrong side can bankrupt an average retail trader quickly.

So what makes a stock move like this?

Now you should already know this as I talk about it all the time… but for those who don’t — a catalyst.

In this case, GLSI announced impressive phase 2b trial data for its breast cancer drug GP2.

As expected, GLSI is still in play today…and will be for a while as traders and investors digest this big news.

If you look at it today, there’s already over a 50 point range…

So what’s moving today then?

Glad you asked…I’m seeing a lot of movement in energy stocks today, specifically oil & gas.

In fact they’ve been hot for a while now.

So let’s take a look at a few energy stocks hitting the scans this afternoon to give you something to look at other than GLSI.

 

Amplify Energy Corp. (AMPY)

 

After trending steadily down, AMPY hit a low of .62 in November and has since then more than doubled in price.

Continuing on that momentum, the stock is up over 20% today as it breaks out of a flag pattern on the daily chart, at the time of this writing.

And the next chart high is at $1.96

 

 

Antero Resources Corp. (AR)

 

Antero Resources (AR) is showing one of my favorite patterns, the stair step.

Which consists of a series of higher highs and higher lows.

The stock has been finding support at the major moving averages…starting with the 200-day and moving to the 50-day and 20-day averages as the trend strengthened (blue circles on chart).

Up 15% today, AR is again breaking a previous swing high to continue the trend of higher highs.

 

 

Peabody Energy Corp. (BTU)

 

Peabody (BTU) is a coal company, so a one-off from the oil and gas industry…but also coming off the pain felt by energy producers during the pandemic.

Like AR, BTU is also trending up in a stair step pattern and currently breaking the previous swing high today as well.

It has pulled back some this afternoon, so I’ll be watching to see if it can find strength into the market close or not.

There is a congestion zone from early October in the 2 – mid 2’s…and you’ll notice the high today was in that range before retreating.

If the stock picks up and gets through there, the 200-day is above at $2.77.

 

 

Camber Energy, Inc. (CEI)

 

Here’s another oil and gas company. CEI isn’t making a move like the others today, but it is trading in a triangle pattern…and in a hot industry right now.

So I’ll be watching this pattern for any sign of a breakout…and for increased volume if it does.

 

 

Ascent Solar Technologies Inc. (ASTI)

 

Ascent Solar (ASTI) is in the solar sector, so another one off look here…

Solar is hot…and it’s going to be hot for years to come, so I like to keep stocks in this sector on my radar.

ASTI is up big today after breaking out of a triangle pattern yesterday.

With a big midday pullback, I’ll be watching this one into the close and in the coming days to see where it finds the next support level and such.

 

 

That’s all I have time for today…here’s a look at some of the big movers besides the oil and gas stocks above.

It’s always a good idea to watch what’s moving and find out why…learn from the charts and stories.

 


 

Today’s Stocks on the Move

 

RGLS +33%

WTI +23%

SEEL +22%

MOXC +20%

BIOC +19%

SID +13%

XXII +12%

 


 

Author:Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.