Trade Mindfully and Master the Last True Edge in Trading

Trade Mindfully: A “must read” book recommended by TheStreet.com

Trade MindfullyTrade Mindfully was read by Tim Bourquin, co-founder, of the Traders Expo and TraderInterview.com, before it was published. Tim has interviewed several hundred very wealthy traders, is a trader himself, an author of an excellent book Traders at Work, and has been around the trading game for a good many years. He understands trading on a deep level and said something very insightful about my new book:

Technology used to be the ‘edge’ that separated good traders from bad.  Now that nearly every trader has access to the same charts, software, and order types, the real edge separating wealthy traders from failed ones is their mental approach to the markets … and Dr. Dayton provides a step-by-step method for mastering the last true ‘edge’ traders have for making money in the markets.

Trade Mindfully Provides an Approach for Trading Mastery

Trade Mindfully provides the tools and techniques for you to develop the skills critical to your trading success. It details a complete and proven approach based on professional sport psychology to guide you in taking yourself to the next level—both mentally and technically.  This straightforward approach can help you to go from good to better, and from great to master.  As I often tell traders, “It is your trading process that will have the most decisive impact on you and your trading,” and Trade Mindfully details an easy-to-follow process for you to achieve your optimum trading performance.

Trade Mindfully Directly Addresses Trading’s Emotional Hazards

Trade Mindfully will also show you what to do for all of the pitfalls, mental traps and psychological challenges provoked by trading and experienced by just about every trader.  If any of the following is familiar to you, you will want to read Trade Mindfully:

  • You have a solid trading strategy, but you constantly lose money in actual trading
  • Previous losses keep you from pulling the trigger on sound trade setups
  • The market has a sudden move and you take an unplanned trade
  • Winning trades are cut short
  • Losing trades are held far too long
  • You become so angry at getting stopped out, you take revenge trades
  • No matter what you do, fear still dominates and ruins your trading
  • You want to master your strategy and take your trading to the next level

One early reader of the book says in the Amazon reviews:

“Along with Mark Douglas this may be the best information for traders available… [Read it] before the account is funded.” 

Another trader has this to say:

“Trade Mindfully is the best book I’ve ever read on the psychology of trading.  It is difficult to control your emotions during winning or losing trading days, and oftentimes bad decisions are made.  There’s so much to be learned here, that active traders should look at this book as the bible of trading psychology!”

See Amazon reviews here.

Trade Mindfully is now shipping from Amazon.com.  December is always a great trading month, so it’s a good time to get down to business.  Make it an early holiday gift for yourself or ask your spouse to put it on the gift-list.  Purchase directly from Amazon: Trade Mindfully at Amazon.com.

Wyckoff Spring Lights Up Market

A Wyckoff Spring brought holiday cheer to the market today.  Christmas came early as the first good trade against a reliable edge today lit up the market.

Wyckoff Spring Entry

Wyckoff SpringAfter rallying above yesterday’s high and the two-day high in the overnight market, the S&Ps hit a little selling around the 10:00 AM (Eastern Time) inflection point.

The downside volume started fairly heavy, but price didn’t go very far.  This was the first clue that the buying overnight would be sustained in the US session.  As price came down, volume started to recede.  The market on the intraday time frames became oversold and then reached support.  Dipping underneath suport ever so slightly, then rebounding back up gave us the Wyckoff Spring entry.

Response to the Wyckoff Spring

We always look for an affirmative response from the Wyckoff Spring.  This one gave a nice, quick response.  Buyers came back to life, as seen in both the price action and volume.  A brief test after pushing through the supply line gave this Wyckoff Spring a grade of A+ for being a good trade.  And good trade it was.  The trade ran through to the end of the day in a Trend Day Up producing 30+ points from entry.

Learning the Wyckoff Spring

The Wyckoff Spring is a favored, “bread & butter” trade.  It is highly reliable in overall market conditions like today.  The trade is initiated very close to the stop point (the “danger point”), so risk is low.  When it is not going to work out, the market usually tells you before properly placed stops are hit, allowing you many times to scratch the trade for little or no loss.  It sets up several times a week on the intraday charts.  And, it forms in all markets and on all time frames.  It is truly a great trade setup.

We have a 90-minute video training on this one setup.  It is rated highly by traders (five stars).  The video teaches you all the nuances of the trade, including times when not to take a setup and also power springs where the Wyckoff Spring not only has high odds of working, it is also likely to produce a very strong move to the upside.

You can learn more at this link:

Learning the Wyckoff Spring: Video Training

Holiday and Trading Stress

Holiday stress and trading

Holiday and Trading Stress

Holiday and trading stress can come together as a double whammy for traders.  The holiday season is a time for celebrations, gifts, well-wishes and good cheer.  It’s also a time of heightened stress.  For many traders, who already feel lots of stress, the holidays can feel doubly difficult.

It you would like to learn more about stress around the holidays and how to Holiday stress and tradingeffectively deal with it, you can check out my feature article, “Holiday Stress and Trading Pressure: How to S.T.O.P. the torment” on the TraderPlanet.com website.  It was just published.  Here’s the link:

TraderPlanet: Holiday Stress & Trading Pressure

 

Wyckoff Spring Lesson

Was it a Wyckoff Spring?

Wyckoff SpringWas it a Wyckoff Spring?  That was the discussion in yesterday’s post. Because of the combination of Wyckoff principles that were setting up in the structure of the market, I expressed doubt that yesterday’s daily trading action in the S&P e-minis represented a sound Wyckoff Spring.  Those doubts were confirmed today in spades as you can see on the daily chart.

The heart of the Wyckoff trading method is to understand supply and demand.  We never simply accept a chart pattern–even a Wyckoff Spring–at face value.  Structure and the supply-demand relationships expressed in price action, the waves and volume are what tell us about the likely next market move.  Not chart patterns.

Failed Wyckoff Spring Trades

Wykcoff SpringAs I mentioned in yesterday’s post, the last swing low at 2048.25 was the key level for whether or not yesterday’s price action was a sound Wyckoff Spring. Because of the heavy volume yesterday, we would expect the market to test around the 2048.25 level.

By the first hour of the US trading session, the market had fallen more than seven points below 2048.25.  We see this on the 3,000 tick chart at A.  That’s not a test and we knew at that point that the Wyckoff Spring was in serious trouble.

That size of a drop underneath a key level with the level of volume we saw usually means that that key level will become resistance on any approach back up.  That is exactly what happened today, giving traders ample opportunities to get short (red arrows).  This is a standard Wyckoff Trading Method setup with a target of yesterday’s low or lower.

Wyckoff Spring Low Becomes Resistance

We can see that volume favored sellers all day.  Late in the day a final short set up on very weak demand at the top of the rally into yesterday’s low.  This is another standard Wyckoff Trading Method play.  Even though it occurred very late in the trading day, it produced a sizable number of points.

Deep Practice

Learning to read the market like this is not difficult to learn, but does take some effort and practice.  Every week, I meet with a group of like-minded traders in our specialty Deep Practice program.  Deep Practice presents market situations like we saw over the past few days with an aim of developing in participating traders the skills needed to assess and successfully trade what is seen on the chart.  Wyckoff market principles are taught each week with discussion and simulated examples.  Based on over 40 years of performance psychology that has uncovered what makes great performers great, we use the psychological principles of deliberate practice to rapidly build knowledge, skills and abilities in our traders.  Learn more at this link: Deep Practice

Trading a Wyckoff Spring

The Wyckoff Spring is difficult to trade when the market is falling like it did today,” wrote one trader in an email after the close.  He asked, “How do you do it?”

The Wyckoff Spring is one of my “bread & butter” trades.  I look for them all the time.  In the few markets I trade, I know there will be at least 2-3 Wyckoff Springs setting up each week in each market. It’s a trade I count on.

Wyckoff Spring: What To Look For

Here are a few things we can see in yesterday’s Wyckoff Spring that helped us determine is was a solid setup (not all will be).

Wyckoff SpringFirst, selling is drying up as price pushes lower.  We see this at A.

Next, we see demand show itself with good volume and a sizable wave at B.  Note the downtrend line is also broken.

Supply comes out on the way down to retest the lows at C, but not much progress is made.  Lots of selling there, but buyers are very active, too.  They aren’t letting the market fall.  Even though the markets is falling, this action is bullish.  The aggressive trader makes a play here with small risk.

We now want to see demand exert itself and the push up to D shows this nicely.  We want to be a step ahead of the market by knowing what to look for next.  This is anticipation.  Most traders at this point would be predicting higher prices.  We anticipate them, and there is a substantial difference.  Anticipation is a much more mentally flexible approach that allows us to confirm we are correct in trading the spring or disconfirm that the spring is happening.  Either way, we are not mentally locked into price going in a specific direction or to a specific level.  By anticipating, we remain mentally flexible and can act correctly, no matter what the market does.  In this case, our assumptions are confirmed.  A second trade location is offered as the market pulls back on lowered volume, further confirming that the tone of the market has changed to a bullish one.  Here at E the more conservative trader makes a very nice play and the aggressive trader adds to her position.

So even though the market was falling, it was not that difficult to see buying was overcoming the selling, if you understand what to look for.

Wyckoff Spring: Learn More

There is much more to learn about this wonderful trade, of course.  I can’t detail everything in a blog post.  I’ve put all that I know about trading the Wyckoff Spring in a 90-minute video tutorial.  It’s highly rated by traders and goes into great depth on how to trade the Wyckoff Spring.  This trade occurs frequently in all markets and time frames.  It’s a true bread & butter trade.  So, give yourself a nice early holiday gift.  You’ll be glad you did.  Learn more here: Trading the Wyckoff Spring.