Dr Gary Interviewed on Market Wrap

Dr Gary Interview

Dr Gary Interview

Earlier this week, I was interviewed by the nationally syndicated Market Wrap radio host, Moe Ansari.   We discussed my new book, Trade Mindfully, and the psychology of trading. Moe has been covering the markets on Market Wrap for 25 years.  He had some insightful questions he asked me regrading trading psychology.  You can hear my interview by clicking on the audio bar below:

 

Dr Gary’s interview runs about 15 minutes.

You can also listen to Moe’s full program as it aired on January 15, 2015 at this link: Market Wrap: Dr. Gary Dayton joins Moe Ansari to discuss his new book on trading mindfully.

You can learn more about my book, Trade Mindfully, here: Dr. Gary’s Trade Mindfully and purchase directly from Amazon.com: Trade Mindfully at Amazon.com

 

 

Commitment Wins!

Several days ago, I wrote a post about two climbers—Tommy Caldwell and Kevin Jorgeson—and the incredible commitment they were displaying in climbing the hardest rock climb in the world.  I am happy to report that these two intrepid souls completed their historic climb, topping out today.  After 19 days of living in the vertical environment of El Capitan (and, yes, without shave or shower), they finished their dream of seven years.

Commitment in Trading
Home for 19 days

Commitment in Trading

Commitment for any difficult pursuit—whether it be climbing or trading—is absolutely necessary.  You can’t just say I’m going to be a trader and expect to be successful.  Commitment means being fully engaged in trading—not just making trades, but fully engaged in all the supporting activities that go with it, from writing a solid trading plan to studying your charts each night.  It’s the little things that always makes the difference.

And, commitment also means not giving up when things don’t go well for us.  The committed trader doesn’t throw in the towel after a series of losses.  Just the opposite: the committed trader re-commits to her trading and works harder.  Setbacks are viewed as a way to overcome obstacles and become better.

The Dawn Wall Climbers’ Commitment

Commitment in Trading
Tom Evans photo

If you have been following the story about the two climbers and their historic climb, you know that Kevin Jorgeson ran into trouble on “pitch 15.”  A pitch is a portion or leg of the overall climb that is about equal to the length of a climbing rope—around 150 to 175 feet.  On this climb there are 31 pitches and the total length of the climb is about 3,000 feet above the valley floor.  Pitch 15 is the hardest on the route, though there are truly no easy ones.  It took Jorgeson 11 attempts (he fell 10 times, caught by the rope) before he surmounted that obstacle.

Commitment in Trading
Dawn Wall Route
K. Jorgeson image

After two days of failing to make pitch 15 (and with his partner, Tommy, already through 15 and completing several additional pitches), you can imagine how Jorgeson felt.  He texted his girlfriend that second night with a one-word message, “Devastated.”

Did he throw in the towel?  Of course not.  His fingers had split open because pitch 15 requires a series of delicate moves on what are described as “dime-thin and razor sharp”

Commitment in trading
Applying Super-Glue to fingers
National Geographic image

holds.  All his effort cut up his fingers.  He took two days off in the hopes that his fingers would heal.  During this time he studied some video of himself failing and falling given to him by one of the camera crew members filming this historic event.  As he worked harder and studied the video, he noticed he was slightly off in his foot placements.  And, in the end, he super-glued athletic tape to his cut finger tips to keep them from opening up, re-committed to his climb, and nailed pitch 15.  That is commitment!

Another Perspective on Commitment from which We Can Learn

Tom Evans, the outstanding climbing photographer who photographs many of the climbs on El Capitan, had this to say yesterday, before they completed the climb:

Tomorrow will see the end of this 7 year odyssey.  Their reward is the satisfaction of the completion of a hard fought contest.  The lessons of character, integrity, tenacity and determination were demonstrated, not only during these last 19 days, but when no one was looking and there was no crowd down in the meadow cheering.  In those previous years of struggle, the TEAM sustained themselves just on their dreams, while the world thought it couldn’t be done.  Well, tomorrow it will be done, and they will pack up their gear and head home, once again alone, but with a satisfaction only gained through struggle, both mental and physical.  The summit awaits, as does future dreams of the impossible.

These are wonderful words about commitment that we, as traders, can learn deeply from.

Here is a video clip made by NBC that gives a nice summary of this utterly amazing feat (scroll down to find the video):

NBC Video: Dawn Wall Climb

Review of Trade Mindfully

Trade Mindfully

Trade Mindfully Reviewed by Brenda Jubin

Brenda Jubin of Reading the Markets has written a review of my new book, Trade Mindfully.  It’s a good review:

From Brenda Jubin at Reading the Markets:

It’s impossible for me to write a reliable review of this book because so far I have merely read it and haven’t done it. And, as Gary Dayton stresses, it is not enough to readTrade Mindfully: Achieve Your Optimum Trading Performance with Mindfulness and Cutting Edge Psychology (Wiley, 2015). You actually have to do the exercises and practice trading mindfully. I can say, however, that I found Dayton’s book sufficiently intriguing that I’ve put it aside for a second, more interactive read.

Dayton, a clinical psychologist, sets a course for traders to follow that will, in the best case scenario, prevent them from being hijacked by their emotions. This is not to say that traders will be able to eliminate or control those emotions that undercut their trading success. In fact, trying to suppress, control, or eliminate feelings and thoughts usually only makes them worse …

Keep reading:

Brenda Jubin’s Reveiw of Trade Mindfully

To order Trade Mindfully:

Trade Mindfully at Amazon.com

Market Action Today

Today’s Market Action–Surprising?

The market action this morning may have surprised some traders.  We saw the market start to rally strongly after putting in the January 6th low.  I had emails from more than one trader saying that this rally looks very similar to the push off the mid-December swing low.  They argued for new highs. I have been doubtful about that.

A few things seem obvious: (1) the strong rally off the mid-December lows barely made new highs and did so on no demand with volume receding on the rally, followed by (2) a new downdraft with volume expanding to the downside, and (3) the last two rally days have been on comparatively lighter, receding volume than mid-December.

Today’s Market Action Resistance Area

Market Action TodayLast night in Deep Practice, I again expressed this view and the reasons behind it, including higher time frame considerations.  We discussed the potential for today’s trading and I noted that the area just above yesterday’s high (red box) could prove problematic for the market. This is where the supply from the last downdraft began to pick up steam.  If the market is subject to another round of selling, this was a likely spot for sellers to rekindle their efforts.

Free Webinar

I held a free webinar earlier this week covering a lot of Wyckoff topics.  It ran a little over an hour with lots of great questions from everyday traders.  The video is available and is free.  You can access the video at this link:

Free Wyckoff Webinar

Courses on Sale

Our trading and trading psychology video courses are on sale with a 25% off discount.  This is a good time to take advantage of the discount to save money on highly rated courses that are always in-depth giving you the nuances, not just the basics.  Check out our courses on sale at this link:

Courses on Sale–25% Off

A Trader’s Question from the Community

A Trader’s Question

Kate, a trader, asks a really good question regrading the last blog post (see that post and Kate’s question here).

She noted that I was looking to sell yesterday around the 2010 level, but since the market moved higher, would that need a re-assessment?  Let’s take a look at how to treat areas like this.

Identifying a Key Level

Trader's QuestionThe 2010 level was the two-day low.  On the hourly chart, you can see that price formed the 2-day low late in the day (just above the 2010 label).  The next day (labeled as X on the hourly chart), the market rejected  higher prices above 2010.  That was decent resistance forming and I noted in Tuesday’s post that “I’ll be looking for a short opportunity on any weakness around or just above the 2010 level.”

Market Approaches the 2010 Level

When the market re-approached the 2010 level (see A on both the 60- and 15-minute charts), we indeed did see the resistance trying to hold.  It didn’t last long, however.  I’ll go through the details below.   Note how much trading occurred around 2010.  As anticipated, it was a significant level for the market as we see two hours of trading back and forth where sellers attempted to hold it and buyers had the intent of pushing through it.

While we can often identify and anticipate significant market levels as a function of market structure, we can never know in advance whether they will hold or break.  For that, we have to see how the market trades around them on the intraday time frames.

Details of Buying and Selling on the Lower Time Frame

On the 15-minute chart, we see pre-US open that the market had approached the level at A, and although there was some weakness on the hourly, we were in an uptrend on the 15-minute. Typically, markets don’t hit a level and immediately reverse.  We expect some back and forth.  As the US session opened, we see the first 15-minute bar (1) show some buying strength at the 2010 level.  The strength of the bar and the volume were enough to cancel ideas of shorting.  The next bar (labeled with a B) also shows buying coming into the market.  Selling comes in at 2, but we are now 8 points above the 2010 level – buyers were exerting bullish pressure.

For the next 90 minutes, we trade around the 2010 level, highlighting it’s significance.  I labeled bars as either B or S for buying or selling.  Bar 3 was down and certainly had selling on it, but the close was back above the low of Bar 1, indicating buyers were strong in this area (if the sellers were really strong, they would have closed it near, if not under the low of 1).  Bar 4 shows a pick-up in volume and no ability on the part of the sellers to continue to push the market down (compare price action and volume of Bar 4 with the preceding bar–selling was being absorbed buy buyers).  Bar 5 confirmed the buying on Bar 4.

When I look at a level like 2010, I am thinking of it in terms of a day trade. While I still think the overall market will head lower in the near future (based on the weekly chart), that will likely take days if not a week or more to unfold, if it does.

Free Webinar Recording Available

We had a webinar covering daily bar-by-bar reading of GOOG, how to use the comparative strength and weakness of related markets (daily charts), and the use of the 3-10 oscillator and Weis Wave on intraday charts.  I covered a lot of material.  It’s been recorded and you can access it at the link below:

Free Webinar Recording