How to Avoid the Top 10 Fatal Errors of Trading or

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From the Active Trend Trader Copyright: https://www.

1 How to Avoid the Top 10 Fatal Errors of Trading or Eliminating Self-Limiting Beliefs From Your Trading From the Active Trend Trader Copyright: / 123RF Stock Photo

2 Disclaimer U.S. GOVERNMENT REQUIRED DISCLAIMER COMMODITY FUTURES TRADING COMMISSION FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALS O LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON T TRADE WITH MONEY YOU CAN T AFFORD TO LOSE. THIS IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION I S BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED IN THIS TRAINING. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS H AVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESU LTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN E XECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF AN Y, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PRO GRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. ALL MATERIALS PRESENTED ARE FOR TRAINING PURPOSES ONLY. TRADERS SHOULD PAPER TRADE ANY NEW METHOD PRIOR TO RISK OF PERSONAL CAPITAL.

3 Eliminating Self-Limiting Beliefs Does the way you think effect the way you trade? YES! Objective for today: 1. Trading is 10-20% Technique and 80-90% how you think! 2. Learn to trade one thing really well then manage your trade size to achieve your results

Eliminating Self-Limiting Beliefs Does the way you think effect the way you trade? YES! Are you sabotaging the success of your System? How? Why do many traders seem to self-destruct, again & again?

4 Eliminating Self-Limiting Beliefs Does the way you think effect the way you trade? YES! Are you sabotaging the success of your System? How? Why do many traders seem to self-destruct, again & again? Close held beliefs will impact trading success! Do you deserve to succeed? Close held beliefs can impact mechanics! Money, Wealth, Prosperity, Work what are your thoughts and feelings about these? Can we be reprogrammed to think and act like Wise, Disciplined and Profitable Traders? The answer sometimes hide in clear sight and other times are hidden deep within the Trader!

5 Eliminating Self-Limiting Beliefs Does the way you think effect the way you trade? YES!

6 Eliminating Self-Limiting Beliefs - We don t have to think wrong or bad for it to have a negative impact on our trading - Sometimes its just thinking with a preconceived BIAS! - Maybe it s not as easy as riding a bike! -

7 Eliminating Self-Limiting Beliefs - I m convinced that our Self-Limiting Beliefs will show up in our trading reflecting a combination of both conscious & subconscious beliefs & habits that bias our perception - The good news we can change our beliefs by changing what we think and our actions - Remember: Knowledge Understanding What we think we know, may be our biggest challenge and really doesn t matter when it comes to trading! Graduating with Honors!

8 Eliminating Self-Limiting Beliefs 10 Fatal Errors of Trading 1. Limiting Beliefs that Sabotage the System s Design 2. Trying to Run Before Learning to Walk 3. Trading Strategies before Knowing the System 4. Failure to Develop a Routine 5. Unrealistic Expectations 6. Failure to Use Price Clues Entries, Exits & Trend 7. Trying to Get Even 8. Spread too Thin 9. Impulsive & Reflexive Trading 10. Trading too Much/Trading too Little

9 Effects of Fatal Trading Errors Those ill prepared will Fall Prey to the Fatal Errors! - They are victims when something like this happens Which can be devastating!

10 Eliminating Self-Limiting Beliefs Recognize Fatal Errors 1. Limiting Beliefs that Sabotage the System s Design due to Self-Sabotaging Subconscious Conditioning & learned skills that restrict our ability to learn how to trade - Limiting Beliefs were primarily programed between the ages of 2-6 years when we had no filter - Limiting Beliefs were shaped by our impressions of those closest to us Parents, Significant Other & Friends (Culture) - Limiting Beliefs also come from our formal education - Some of these beliefs are deeply ingrained and shape either a positive or negative view of things like: - Success, Prosperity, Wealth - Money - Relationships - Work - The Market

11 Top 10 Fatal Flaws Psychological Challenges - Fear, Greed, Ego, Lust, etc. - Holding onto limiting beliefs - I don t deserve to win! - I have to work hard for my money - How can I make that much with such little effort - Don t be one of those Rich People - I can t be wrong! - Self-Sabotaging Subconscious Conditioning To Avoid: Become a Mechanical Trader. Admit that there may be issues

12 Eliminating Self-Limiting Beliefs Dealing with the Roots 1. We tend to only see the Fruit, we must dig for the Root 2. If its Poison Fruit, the roots must be exposed and new seeds planted and nourished - I don t deserve to win! - I have to work hard for my money - How can I make that much with such little effort - Don t be one of those Rich People - I can t be wrong!

13 Eliminating Self-Limiting Beliefs Dealing with the Roots 3. Spend quality time digging for the roots - Who had the biggest influence on us as we were growing up and now - Spend some time and answer these questions in writing, really let it out! 1. What was your parent s belief/feelings about money & success 2. What did they say about money & success 3. How do they feel/think about money & success now? 4. How do your friends think/feel about money & success? 5. What do they say about money & success? 6. What does your significant other think/feel about money & success? 7. What are your conversations about money & success? 8. Do you argue about money &/or success? 9. What work skills conflict with my learning how to trade 10. Picture yourself outrageously wealthy and prosperous. What do you think and how do you feel? 11. How does success & prosperity scare you? 12. When you see someone who is living the lifestyle you want, what do you think and feel? 13. Do you compare yourself with friends/family or neighbors? 14. What would you do with $1 million windfall?

14 4. Identify Roots to Poison Fruit Eliminating Self-Limiting Beliefs Dealing with the Roots - Go through answers to each question and identify any negative selflimiting belief and star it! Should be around Re-word the self-limiting beliefs into new empowering affirmations - Read them out loud 2-3 times a day but for days to establish new beliefs and action habits Some of mine: - Limiting Belief: I don t deserve success and prosperity. Don t be like those rich people! - Empowering Statement: I deserve to earn greatly from my God given skills. - I only have positive thoughts and feelings about abundance & wealth. - I am inspired by my ability to make more money!

15 Eliminating Self-Limiting Beliefs Other Affirmations for a Trader - I am a Wise, Disciplined & Profitable Trader - I forgive my past and embrace my future - I trade a winning system designed to give me an edge - Small losses are part of the job of trading, I avoid large losses by following my rules - I celebrate every win, big or small - I win when I follow my system rules - I find wealth & success in all things in my life including family, friendship and love - I am worthy of gaining wealth and abundance from my trading - I am Grateful that my life is prosperous

16 Eliminating Self-Limiting Beliefs What next? 1. Know the system Trust the System 2. Know yourself Trust yourself 3. Patience will be rewarded.

17 Bonus Slides

18 FEAR The System and You Doing Your Part Recognize Fatal Errors Fear is probably the most significant emotion for traders. Many traders struggle with this emotion and fear can demobilize you from applying your hard learned technical skills. When suffering from fear, you may Cut winners short in fear of giving profits back Hesitate in pulling the trigger because you fear the prospects of a loss Hang on to losing trades because you fear taking the loss Jump into unplanned trades because you fear leaving money on the table To Avoid: Get Help and find a mentor

19 The Top 10 Fatal Errors 2. Trying to Run Before Learning to Walk - Learning to trade is a process that is much like Golf! Never totally Mastered - Don t mistake beginners luck for skill! - A luring temptress To Avoid: Choose a solid, winning system with a great track record that fits your life style

20 Top 10 Fatal Errors 3. Trading Strategies before Knowing the System - The System determines the probabilities for the Strategies - Not using a System is just guessing! To Avoid: Build your strategies around the system!

21 System to Strategy Stock & ETF Strategy Option Strategy W&I Strategy SYSTEM

22 Top 10 Fatal Errors 4. Failure to Develop a Routine - Like driving without Google Maps! - Flying an Aircraft without using the pre-flight check list To Avoid: The system will contain: routine & quality control criteria linked in a feedback loop that leads to refinements in protocols and best practices. - The objective is to eliminate variables and improve quality of both input and output

23 5. Unrealistic Expectations Top 10 Fatal Errors - Understand what it really takes to replace a salary trading - Being under Capitalized - Trend Trading Systems: 20% per year with a 50%-60% Win/Loss Ratio so do the math! - Work Salary: $100K to replace the trader needs $500K in trading Capital - Consistent Stable Monthly Income More like a commission job, prepare for drawdowns To Avoid: Don t think you will be different!

24 Top 10 Fatal Errors 6. Failure to Use Price Clues Entries, Exits & Trend - Failing to recognize that there are only 3 types of entries - Breakouts, Pullbacks and the Wrong Entry - Failure to know the Long Term, Mid-Term & Short Term Trends - Arguing with the Long and Mid-Term Trends To Avoid: Apply your rules and trust the technical and the trend

25 7. Trying to Get Even Top 10 Fatal Errors - False Belief that the Market owes you something! - Several Loosing Trades makes us doubt the system - Holding on to a loosing trade, didn t follow Rules To Avoid: Understand probabilities. Understand that even a Win/Loss system can be very successful if looses are managed by the system!

26 8. Spread too Thin Top 10 Fatal Errors - Not understanding trading is a marathon and not a sprint! - Trying to learn something new before mastering past training Leads to a never ending search for the Holy Grail of Trading! To Avoid: A Man s Gotta Know His Limitations!

27 Top 10 Fatal Flaws 9. Impulsive or Reflexive Trading Impulsive & Reflexive Trading will ruin your P&L but they also reveal deeper issues! To Avoid: Make trade decisions outside of market hours use conditional orders

28 Top 10 Fatal Flaws 10.Trading too Much/Trading too Little - Forcing Trades believing one has to be in a trade - Too Many Positions (Over 10 is too many for most) - Can t Pull the trigger - Won t do the homework to trade To Avoid: Buy when you should buy, sell when you should sell

29 Clarify, Simplify & Multiply This has been the Motto of Active Trend Trading from the beginning! We continuously work to Clarify & Simplify through refinements to the system to make it objective and easy to both learn and use. The purpose of all presentations is to provide our fellow Active Trend Trader Members a jump start to accelerate progress up the Learning Curve. We welcome suggestions on how to improve the learning process! Trade Wisely & Profitably, Dennis W. Wilborn Founder & Lead Technical Analyst

What We Learned from 2017 & Bad Habits to Eliminate before 2018 December 9, Active Trend Trading Dennis W. Wilborn

What We Learned from 2017 & Bad Habits to Eliminate before 2018 December 9, 2017 Active Trend Trading Dennis W. Wilborn Disclaimer U.S. Government Required Disclaimer Commodity Futures Trading Commission