In the Zone

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We’ve seen one of the largest drops in the DJIA in history over the past week. Many people are fearful. It’s hard to feel optimistic when people are using the word “depression” to talk about the economy. But what does this mean for the markets? During the 1987 crash, James Baker was Secretary of the Treasury. On This Week, he commented that the current economic crisis is more complicated than in 1987 due to the credit crunch in the banking industry, which was not present in 1987. Former Secretary of the Treasury Larry Summers commented that bad loans were made out of greed, but right now, fear is the prevailing sentiment. The question to ask as a trader is, how can I capitalize on fear?

One person’s source of fear and stress is another person’s opportunity when trading. The market has shown large moves, and if you were on the right side of the trade, you profited. There are two choices you can make: You can decide to trade with a sense of fear and feel stressed out, or calm down and enter the zone.

Uncertainty can mean prosperity in the markets for the short-term trader with the right intuition and skills. It is dangerous for some traders who don’t have knowledge, skills and financial resources, but an exciting time for others. The key to success is to enter the zone rather than panic.

How do you achieve an optimal state of mind? First, you must put aside fear. Existential psychotherapists point out that people experience fear and anxiety when they think about, and regret, their past mistakes, or when they worry about an uncertain future. The antidote: Experience the moment. Focus on the process of living in the here-and-now. Seasoned traders describe a similar experience when they enter "the zone." There's a point where a trader isn't worried about past mistakes or future profits. All one's attention and energy are focused on the current trade. When they are in this optimal mental state, they achieve a higher level of existence. They are more in touch with their instincts. They see the markets and their trades more clearly, and are intensely aware of their feelings, sensibilities, and judgments. They can review a multitude of details, and can effortlessly identify the key factors that are likely to drive market action. Moving into this higher level of awareness during a trade can greatly increase one’s chances of success. It’s useful to learn how to move into this peak performance state.

Even though it’s hard to put fears of future economic troubles out of your mind, it’s vital that you focus on the moment. Think strategically rather than emotionally. Calm down, relax, and concentrate. Don’t think about the future. Don’t put unnecessary pressure on yourself to perfect at levels that you cannot attain. Accept your limitations, look for opportunities, and react to what you see. That said, don’t feel overconfident and don’t take unnecessary risks. Fear results when people perceive that the future looks uncertain, and stress comes about when you put so much pressure on yourself that you can’t achieve your goals. When fearful and stressed out, you must lower your expectations and accept what you actually can do rather than get upset that you cannot achieve what you want. Winning traders go where the markets take them and don’t impose their will onto the markets.

If you decide to trade during these uncertain economic times, it’s vital that you protect yourself. Don’t act recklessly. Anticipate and avoid potential adverse events. It’s vital that you truly are safe. Have a backup plan, and manage risk. If you are taking big risks with money you can’t afford to lose, then you will feel naturally anxious. During these times, however, some traders act out of desperation and make bigger trades than they should and take bigger losses than they can afford. It’s vital to stay calm and focused, and avoid panicking.

These concepts sound good in theory, but how does one put these ideas into practice? It may be extremely difficult for some people to live in the moment for very long, or to stay there and completely cast aside fear without worrying about the future. One can strive to reach this state of existence for a short time, however, at least long enough to evaluate a trade and take decisive action. The first step is to monitor one’s thoughts and identify instances where one is worrying about the future and focused on a dismal view of the future. The second step is to actively try to push such thoughts out of one’s awareness. It is hard not to worry about the future: “I wonder if I will anticipate the markets accurately or will I see loss after loss?” After one is aware of the kinds of thoughts that indicate one is worrying about the future, such thoughts can be pushed aside temporarily. It may be necessary to yell “stop” or think, “Don’t think about that right now; I can consider these issues later, after I’m done evaluating my trade.” Now, using these strategies won’t put you in that ideal mental state where you are completely in the moment, but it will help you get to a mental state that is close to the ideal.

The best traders are not self-conscious about their mistakes. They don’t regret past mistakes or worry about the future. They live in the moment. You can also live in the moment, if you can take the current market action that stresses out the masses and trade it to your advantage.

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What is success?

With all that has happened these past few weeks, you may be introspective. Where will the markets go next? Did you trade the markets and lose? Did you win by trading the news? At times like these, it is useful to reevaluate different meanings of success.

Everyone in life wants success. It’s a strange person who wants to fail and feel miserable. Ambitious people strive to do their best. Indeed, they focus most of their energy on achieving their goals. But Drs. Laura Nash and Howard Stevenson argue that a single-minded pursuit to achieve can lead to burn out. A pursuit of a single goal cannot satisfy all of a person's complex needs and desires. It is necessary to address both aspects and a few more.

After studying hundreds of high achievers who maintain lasting success, Drs. Nash and Stevenson discovered that they share a set of common characteristics. They make a positive difference and enjoy the process of their endeavors. They also have a complex, in-depth understanding of success, and what success really means.

What is success? Enduring success has four components. First, successful people feel their work is pleasurable; they feel content. Second, they believe that their efforts accomplish something; they feel as if they are mastering a set of challenging skills. Third, they feel they have made a positive impact on people they care about, and fourth, they believe they are creating a legacy; their efforts will somehow help others also find success. Nash and Stevenson argue that unless all four components are addressed, one doesn't feel that their success is real. People who don’t address all four dimensions of success will experience what Drs. Nash and Stevenson call the "wince factor." That is, they may feel they are going in the right direction, but they won't truly feel successful. They will be preoccupied with trying to satisfy components of success you have ignored.

How can traders address each of the four components? Let's consider a few suggestions. First, you must view trading as pleasurable; you must enjoy the process of trading, and be motivated by the inherent satisfaction you receive from trading. You can't be overly consumed with the potential monetary rewards. Second, you must focus on how trading requires mastery of a challenging skill. You must feel that as you build up your trading skills. That is, you must feel that you are continuing to master even more difficult challenges. Many traders can easily address the first two components of enduring success. But the second two components, significance and legacy, can be a little more difficult to address. Although one can make the argument that trading is socially significant because traders provide liquidity, many traders find this argument weak. Many traders want to do something more in order to long lasting impact on society. One solution to the problem is to donate some of their winnings to charities, so that they feel that they are using their talents as traders to make significant contributions to society. Creating a legacy as a trader can also be difficult. Many traders, however, find that they can create a feeling of significance and legacy by becoming trading instructors or trading coaches. By helping novice traders learn the ropes, they feel they can significantly contribute to the benefit of others and feel they are building a legacy by helping train a new generation of traders.

Drs. Nash and Stevenson present an interesting framework for understanding the factors that contribute to maintaining long-term success. As a trader, it's in your best interest to make sure you feel your trading activities are pleasurable, challenging, significant, and help you create a legacy. If you address each of these issues, you'll be able to maintain the enduring success you deserve.

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Benefits of Joining A Day Trading Club - www.apextrading.webs.com

For the casual day trader, a trading club is a great idea. It gives you a chance to exchange ideas and gather information. Professional traders almost always sit in a room with other traders, constantly shouting out ideas and sharing news. These are just some of the benefits of joining a day trading club.

Imagine sitting in a room with people from all walks of life, as well as other countries, who have gathered together to learn about and begin the process of day trading. The whole idea of a trading club is to become knowledgeable about day trading, learn how to build confidence in yourself as a day trader, and to learn from each other as well. Whether you are new to day trading or not, having someone in the group who may have expertise in one area, while you may have expertise in another is a perfect way to incorporate ideas through this type of networking.

While the reason you have all come together is to make money, it is also the camaraderie that exists between all of you that will yield positive results. In addition, the leader of the group is the experienced day trader, and is there to teach and offer invaluable lessons on how to day trade and be successful. Further, bringing a group of investors together minimizes the risk because more stock can be purchased as a group than as a single day trader.

Perhaps you have seen paid ads on TV wherein a group of four people are sitting around a table using a new form of stock trading software. Regardless of whether or not they have been successful, the point is they are constantly engaging each other in conversation about a particular stock, asking questions, seeking advice, and ultimately choosing a stock they all determine is the right one.

Joining a day trading club offers you a larger network of people who can also, through discussion and debate, make the right choices that will yield positive results. Due to the leader’s ability to keep them well informed using the latest tools and resources, members of a day trading club are more informed than the single trader since there is a plethora of information available to them and through their interactions with each other.

While day trading clubs are not at all a new genre, they are also not required to register with the Securities and Exchange Commission. Ensure that you check this out before joining any day trading club. After all, you certainly want your investment protected. Also, inquire of the club how much you will need to invest. Once you have these answers, you will need to ask yourself some very hard questions. Can you afford it? Will investing tap into your savings or college tuition? Will you be able to cover all family and household expenses? Further, how do you handle losses? If you become too stressed out or anxious or have a preconceived notion that you will be rich in a matter of minutes – you are only fooling yourself. It takes time and knowledge to be successful in day trading.

The best advice experts offer in ascertaining if joining a day trading club is right for you is to thoroughly check your finances. Do you owe any money? What is your credit score? These are typical questions you would address when beginning any type of business venture.

One gentlemen who joined a day trading club stated that he had a problem with his emotions, but that the club put them in check and if he does happen to make money in an hour’s time on a particular day, he gets up and enjoys the rest of the day. Another gentleman stated he has just joined a day trading club and found the interaction among other investors invaluable and enjoyable.

Consider this: In addition to making money, you will have made new friends as well. You are all working together in unison to reach one goal – and the time spent together will yield not only positive results, but negative results as well. This is the time when your friendships will come into play; when you will discuss the situation and then move on. Remember, in day trading there is no time to dwell on the could of, should of, would of losses – it is intra-day trading that requires all of you to go beyond what was, and prepare for what is to come.

Join a daytrading club with a proven track record and you could start making money as early as tomorrow morning. Visit the website below to get more information:

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Facing Your Fears - www.apextrading.webs.com

"During these turbulent times there are a lot of opportunities in the markets... especially for those who buy index options...I've been fishing for lower price of puts for about three days and got it right, but on Friday didn't buy them..I even had a plan set up to buy them and when to buy them and was expecting this 8% down move in indexes today. What is this that kept me back from buying, how can I pull the trigger next time?"

These days, I'm not sure what to say in response to your question Kirk. Surely, there is money to be made if you have the nerve. But the markets are so volatile and the future is uncertain. One day it seems like Congress is going to approve a bail out plan, and the next day it fails to gain approval. We see the Dow drop one day and recover the next day. That's usually expected due to feelings of regret. I had a hunch it would happen, but these days, I personally don't have the guts to make the bet.

Why are we afraid and what do we do about it? Everyone is a little afraid of losing. It's natural. And these days, losing seems to be the rule. (Sorry to seem so pessimistic, but it's hard at times to hold back my true feelings.) But winning traders are objective when it comes to trading capital. Losing doesn't faze them. Some of the biggest winners are fearless. I think it is just a matter of personality for some people. Some people are more prone to fear, and it's hard to work around this fear. It's like driving fast on a curvy mountain road. It's scary to some people and it should be! (When I was a teenager my uncle and I used to do it all the time. He took risks and it got the better of him in the end, unfortunately. I look back at those times of my youth, and at 46 at think I could never take that risk now that I fully understand the consequences of an accident.) Fear is natural for some people, and fear protects. Sometimes it's safer to accept fear rather than fight it.

Winning traders learn how to look at trading capital coldly and objectively. But as Arianna Huffington notes, "it's hard to be fearless about something that is so elemental, so wrapped up with survival." Not only are some people unable to view money objectively, they have deep seated psychological conflicts about money. For example, "poverty consciousness" is a problem for many. Poverty consciousness is the fear that no matter how much money you have, it's never enough. The idea of possibly losing it all can "fill us with gut wrenching terror," according to Ms. Huffington. Poverty consciousness can at times act as a motivator to drive us to accumulate so much wealth that we will never face poverty again, but many times, it is a constant source of anxiety.

For people with poverty consciousness, money takes on symbolic meaning. Money may act as a social barometer of how well we are doing, or it may become associated with security, freedom, and choices. As true as this may be, it is the root of fear. It's hard to stay objective when significant psychological meaning is placed on money.

How do you overcome your fear about losing money? "True fearlessness about money can come only when we are not driven by an insatiable desire for security," according to Ms. Huffington. Instead, a person must live a life driven by passion and purpose, regardless of financial circumstances. When you are passionate about something, it will override your fear of poverty. If you have abundant passion, abundant optimism, and abundant nerve, you will overcome your fear of losing. What's the point: The only way you can take a risk is to pretend it doesn't matter if you lose. It's simple in theory. If you can convince yourself there are no potential negative consequences for making a trade. you can pull the trigger. If you can believe it's a "sure thing," you will be able to pull the trigger. If you believe that you can make back any money you lose with ease, you will be able to pull the trigger.

I hope these comments help, but today I have little to tell you. I think many traders are anxious and they should be. If you are a natural risk taker, you may not have trouble trading these days, but many people will have trouble. The key to pulling the trigger under stress, unfortunately, is to minimize potential negative consequences. Risk money you can afford to lose, or fool yourself into believing it doesn't matter. But that's hard to do if you feel deep down that losing money really matters.

Written by Michael Shopshire

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Planning Ahead and Feeling In Control - www.apextrading.webs.com

During uncertain economic times like these, trading the markets can be frustrating. There’s an aura of uneasiness these days. No one is quite sure what will happen next. What financial institution is about to fail next? Will government intervention actually stabilize the markets in the future? Just what the future will hold is unclear, but whatever you do, don’t panic. It’s vital to stay calm, and now more than ever, make trading plans and follow them.

Depending on how you look at it, each trading day is marked by one unexpected, adverse event after another. It seems as if we have been continually bombarded with new information that moves the markets up or down. To some traders, the volatility is an opportunity, but to others, it’s difficult to feel comfortable. Usually, the conventional trading wisdom is to stand aside during earnings reports or decisions by The Fed, since these events may adversely influence your trading plan. A good trading plan always accounts for potential adverse events, however, which may mean staying completely out of the markets, or at a minimum, demands careful risk management.

Making trading plans has psychological benefits as well as financial benefits. When you make a trading plan, you take control and you feel that you are in control. Even when trading chaotic, uncertain markets a sense of control can go a long way. A study by Dr. Timothy Steenbergh and colleagues at the University of Memphis (Steenbergh, May, Meyers, & Whelan, 2005) suggests that you are better off making a plan and following it. They studied a group of university students who played a computer game of roulette. All participants reported they had gambled recreationally in the past year. Researchers asked participants to describe the strategies they used while playing computerized roulette. About 25% of the participants reported they had no strategy or plan for winning; they just saw outcomes as random and passively accepted outcomes without taking any action to get the odds to work in their favor. The remaining participants reported that they had developed a strategy or game plan.

Results of the study suggest that it is better to make plans and take an active, rather than a passive approach. Participants who came up with some sort of strategy, sound or not, believed that their actions had an impact on roulette outcomes. They made more bets than those who didn't have any strategy, and made more money in the end. These findings illustrate how it’s vital to engaging in active planning strategies while trading, especially during particularly chaotic economic times like these. Don’t make the mistake of passively thinking, "Why bother, it doesn't matter." By taking an active, problem solving approach, you will feel in control, protect your assets with proper risk management and increase the chances of capitalizing on market opportunities.

Written by Michael Shopshire

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*Day traders typically suffer severe financial losses in the first few months of trading if they attemp it alone.

*Day trading is extremely stressful without the help of others.

*Day trading is expensive if you use the wrong company for your trading platforms.

If your intimidated by these warnings, then you need a mentor to help you get started the right way in the exciting and profitable world of day trading. If you are still wary, it might be best to stick with more traditional investing strategies, which offer more balanced risks and less rewards.

To become profitable as a Day Trader and learn a great strategy, also having fun making more money within a couple hours then you do working a full day.

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