A little thinking …

Dear Traders,

Today, I was doing a little thinking.  About the market, after a couple wild and crazy days, the crude oil market took a little break today.

Now, being a trader for a lot of years, I knew today was going to happen just like I knew the Sun would come up today.  By the way, it is an absolutely gorgeous day here in Western PA.

So how big are your dreams?  I find a lot of my failure over the years as a trader is my confidence in MYSELF.  For instance, on Sunday night, I decided to trade and I was right on direction, but wrong on time.  What should have been a breakeven  trade turned out after 25 trades a $2,000 trading loss.

I made a decision on that night as I saw the Sun come up, that I would never be at the mercy of the market and allow myself to continue to hope and wish things would right itself.

I made a promise to myself that I will live on the right edge of the charts.  I will not allow events and all the things I have absolutely no control over influence me in my trading any longer.

I have big dreams.  I have made a lot of money as a trader … and I know I can turn it around … if I can get the demons out of my head.  My worse demon happens to be the one that keeps me pushing the button and taking a loss of $700 on 2 contracts after 3 trading losses to 25 trades later and $2,000 trading loss.

I know I can make up a $700 trading loss on one good trade, but when I give up $2,000 on a trading day, then I have allowed myself to cut into my trading profits and mental psyche.

I am currently reading an excellent book from W.D. Gann, I would highly recommend, called, HOW TO MAKE PROFITS IN COMMODITIES.  It is like he is in my head … telling me things I already know … but I have conveniently somehow forgotten to remember.

W.D. GannFor instance, “The way to determine when the trend changes is if you make a trade and it shows a loss get out of the market. Then if you make a second or third trade and it shows a loss, something is wrong. Your trend has changed! You had better get out => WATCH, WAIT, and STUDY!” – W.D. Gann

Regardless of how you trade, this is a true statement … and Gann is very big on trading on the facts.

Now back to my personal story.  I have found when I live on the right edge of the charts … then I make good trading decisions.  When I allow HOPE and FEAR to enter into this equation … only bad things happen.  Sound familiar in your trading?

Zig Ziglar says, “Life is tough!”  Amen, brother!

To know in your heart you have created a great trading strategy or method, then not to have the nerve to follow it … is my personal fight.

I am a good trader when I start in the win column on the trading day, but when I start out in the loss column … sometimes bad things happen.

What is the main cause?  Do I really feel the market owes me?  No!  Do I continue to trade because of Revenge?  No!

So why?  Why after 3 trading losses do I get in the … oh, what the F^&K … and throw caution to the wind!

I find myself in territory I do not enjoy … one that makes me say why am I doing this … if I know trading is hard … because life is hard … then why do I allow myself to trade into areas I know I don’t belong.

Is it arrogance or pride?  Certainly, this does play a role, but we know Pride goes before the Fall!  So being prideful as a trader is not a smart idea … being HUMBLE is better.

Why is it the longer I live the more I feel I do not know … I run from anyone that says they are a master trader or an expert because … most of them are full of S&#t!  and you can quote me on it!  Most educators can’t trade themselves out of a box!  They educate because they can’t trade real money in real time!

Now, with that being said, there are exceptions like Larry Williams.  If I decide to live on the right edge of the chart … then I must remain there or stop trading.  I believe the market shows direction and the ‘market players’ leave footprints in the sand showing you where they find value.

This is a game of supply and demand.  The market will go up as long as it finds buyers, and it will sell off until all the buyers give up and sell off.  It is a manipulated game … and the only one who wins long term is the trader who allows himself to live on the right edge of the chart!


God Bless and Good Trading,

David ‘Tiger’ Knight


About The Author

David M. Knight

I am a 30 Year Futures and Commodities Trading Veteran. In addition, I enjoy games of skill and chance like: poker, craps, blackjack and roulette. During my professional career, I have developed and implemented successful trading strategies and methods; along with winning systems in games of skill and chance. Join with me on our mutual journey together.