Trading Psychology: Day Trading for Profit – How to train your brain for pattern recognition.

Trading Psychology: Day Trading for Profit – How to train your brain for pattern recognition.


hello traders it’s Samurai trader here
welcome to this session day and swing trading for profit this in this
particular session I’m going to be focusing on how to train your brain for
pattern recognition and a another very important subject how to stay focused
when you are trading as day traders at times we may be idle for an hour or two
waiting for the set up and as you know we want to try to come to us rather than
us chasing the chart the trade and it’s perhaps one of the greatest challenges
for us as traders is that as humans we tend to want to chase things where we’re
hunters in this particular case we need to sit back and wait for the trade to
come to us so I’m going to be showing you and discussing a couple of ideas for
you now it also leads into a little statement down here I’ve got from
Aristotle we are what we repeatedly do excellence then is an act but in habit I
have it so some of the ideas that I give you here I’d recommend that you do them
daily do them every time you trade develop the habit of marking up your
charts which is a big part of what we’re going to be discussing today now onto
the next slide now as we go into this slide as always my videos are all real
and unedited I may jump around a little bit but it’s very very important that
you approach watching really any training video or it really comes down
to reading any blog or a book on trading or any thinking life too and asking
ourselves what can I learn from this how can I use this and even for the
experienced traders I know I’ll be going through some very basic things with you
however just so one idea may change your trading results and as always take notes
if you’re new to my channel you may not have seen one of these slides here but
over the years I’ve been taking comprehensive notes I’ve been day
trading now for twenty five years and I have I think at last count 32 of the
spiral books here full of notes as I trade I take notes
every day and I learned something every single day I promise you I learned
something or when I go back and review my notes in these books and that’s the
whole idea here it may remind me of something that I’ve forgotten because
there are lots of little things when it comes to trading and I’ve become
particularly inspired when I read biographies on say like the pitbull
Marty Swartz and other great traders who are worth hundreds of millions of
dollars and when you read about these guys what you discover and ladies people
like Linda rescue of course sorry Linda not not forgetting you is it they take
notes they review they have their rules up on the walls marty at one stage in an
article wrote he has them handwritten and up on the wall in front of him just
to review so trade is very very important we develop the habit of doing
this extremely important now we’ve all heard of this statement I trade what I
see not what I think all trade what you see not what you think now why in depth
with this that’s easy to say but hard to do in other words it’s very easy to make
a a blase statement when it comes to trading but of course the more evidence
that you have that a pattern that perhaps you’re about to trade is
legitimate that is the easier it is to actually press a button to to take the trade evidence defeats disbelief now how do we develop a belief
we develop that through evidence and over a period of time so some of what
we’re going to be discussing here is how to really develop that evidence and how
to develop and enforce our beliefs that we have when it comes to trading so as
you can see we’ve got a number of things we’re going to be covering in this video
now as always I do need to put up the risk disclaimer there is a risk in
trading if you haven’t read this disclaimer traders please pause the
video and read the disclaimer very quick advertisement if you haven’t obtained
one of my training manuals please download click on the download link
below or visit my website where I’ll two different manuals I’ve got a general
training manual and I also have a manual the truth about day trading and of
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line end of that let’s move on so let’s get into this
Elon Musk once said I think it’s possible for ordinary people to choose
to be extraordinary traders you can become extraordinary when it comes to
trading but you do need to roll up your sleeves and put the week of effort for
work into it and that’s perhaps one of the greatest challenges that I have in
dealing with hundreds of traders I’ve got over 2,000 members now and a lot of
traders they join my program or by someone’s course and whatever and they
expect it to be a walk in the park yes trading actually is easy the setups
are easy so trade is sometimes say to me we’ll look if it’s so easy why don’t or
why doesn’t everyone make make money well the simple reason traders the easy
things are also easy not to do so really it’s about developing the right habit
now where I want to take you in helping you master as your coach in helping you
master the art of day trading is this for members watching this I’ve actually
just uploaded today into the members area or it’s under new recordings and
new downloads its in that folder I’ve actually uploaded the PDF of this book
which I got openly off the internet so anyone can go on Google this for
Malcolm Malcolm’s book called blink now some may
think well how is this book relevant to us is Dane swing traders well I think a
key point out of his book traders is this our best decisions are made many
times and made many times and actually repeated a word there let me many many
times made my way that is right sir I’m getting myself confused see our best
decisions and many times made in a blink of an eye and we wanted as trade has
developed what we called reflex action that is we see a trade setup we know it
works now we’ve got the statistics on our side and of course we pull the
trigger we make the trade and traders on I’m just doing in the middle of a trade
now I’m just gonna pause this I just I’ll show you this trade in a moment it
was too late I was about to go to break even it was six ticks on CEO we’ll have
a quick look at it in a moment and just five contracts are not a big trade but
five contracts on CL and I had it going at the same time it was quite slow I’m
recording this during the Globex session and it was a high of the day it ticked
up plus five ticks and it was time to go to break even plus one so I was about to
do that and that was filled which is which is good anyway
so look the pair of thinking without thinking that is learning to an and
mastering our setups in a blink of an eye and you’ve heard me talk about this
a great deal is you really want to master only two or three setups before
you move on you want to own those setups it’s very very easy to confuse ourselves
as new traders and so really that’s a little bit of what we’re about to cover
and talk about so let’s just go back to this here so getting bits of a point
here I’m gonna quickly show you some charts in a moment I want you to get in
the habit of marking up your charts as you trade I’ve got literally there are
hundreds and it I’ll be surprised if I don’t have in the thousands of charts
now going back some of them are going back twenty years where I’ll go back and
marked up a chart and I then put them in a folder and I call the folders charts
to study and some of these ones here one of these ones these are going back to
what 2015 just one of the folders there and so I want you doing I want to
encourage you to do this because the a number of things that we really want
to do first of all if we look at this chart here and this is a very recent one
speech sweet spot trading note the ATR of marked up various trades so what we
do is we start to mark up what I called the good the bad and the ugly now this
does a number of things traders as we’re trading that is it starts to one that
keeps us busy okay secondly with the checklist of things I’m going to be
recommending that you mark up on your charts and for members I’ve put there
the word document of this slide in the members area so you can go to the
members area and really you can use that word document to put your own list
together if you don’t already have one and so by marking up these charts here
you can see an example here we’ve got ascending and descending triangles which
I absolutely love and one of the points we want to have here by the way trade is
is a minimum of three touches which is we had way in excess of that and that
was a $100 move so by marking up these patterns as you see them it starts to
make you more alert to our for pattern recognition okay now of course we see a
breakdown of a short side of it isn’t always a case and quite often we’ll see
it’ll run to the upside but what it does it starts to what’s a word for it make
us more alert it improves our pattern recognition skills but also it keeps us
constructively thinking as we trade for an example here we didn’t have a break
to the short side but we had a break to the upside and when you actually look at
these triangles or a Center descending or ascending triangles
it’s like price section here is coiling by the way and finally a good get a good
break out and so what you’re doing as you’re marking your charts up as you
trade and as I mentioned the good the bad and the ugly that is the good stuff
as you trade you can go back on a regular basis and it review them and I
highly recommend you do that so traders what it does it gives you an edge in
your trading now we know that to succeed as traders we need an edge the edges
pattern-recognition virtually everything I teach in a day trade is fast track
program patterns that appear on all markets and all timeframes geometric
patterns that appear every day and of course most patterns are what we call
fractal in nature that is what appears on a tick chart will appear on a Renko
or a time-based chart but what we’ve got to do is keep ourselves busy and we’ve
got to teach ourselves so that in a by reflex action in a blink of an eye we
recognize these patterns but it does a number of other things it also keeps us
focused whilst we’re trading so what’s our wedge your edge is going to be you
got to might become a master at trading patterns or recognizing the patterns
patterns repeat themselves in the markets each and every day and day in
swing traders can gain an edge over the majority of traders by learning to
recognize these patterns which most times turn into valid valid set ups in a
blink of an eye that is um if you’ll say trading a number of markets you need to
be able to visually recognize a pattern very quickly could because sometimes
they set up very quickly so how do we train our brain to do this in a blink of
an eye and the blink of an eye we can look at a chart and I actually say to
members that if you’re spending three or four minutes looking in a chart looking
for a pattern or looking for a trade it’s not there it should jump right out
at you so how do we also stay focus when we’re trading well we do that by
having a checklist of things that we’re going to be marking up on our charts now
I showed you a couple of charts that have been marked up now I would
recommend if you’re a newer trader or or if you’re not profitable as a traitor
yet that you apply a lot more to you chart someone I do that is and we’ll
look at that some of those key points or some of what I recommend you mark up in
a moment now another reason want to be actively marking up your
charts it makes it easy to do a count of your strategy results at the end of each
day that is is safe you’re looking at your T2 your slingshot trades if
you’ve got up T2 marked up on say the indicator on the your stochastic T2
marked up you can go back and do a quick count at the end of each stage just
makes trading a lot easier to do that also when you’ve got a trading idea you
mark them up as you see them appear on the charts and after a period of time
when you go back at the end of each week and review your snapshots or you review
the trade stats it just makes it a lot easier actually I just thought of
something here let me just get so just show you this as I was just talking here
I just thought of something here that is just which I use this is a summit for
myself personally this is us talking about this this is what I use so the
market for time frame and the date so as I mark up a trade if it’s relevant to me
I can then go back and just do a quick count how many ruler ones T2 t7 T9 T10s 34 B’s T89 T20s t19 so my divergence trades so just allows me to
do a quick count now I’m just giving you ideas here so find something that works
for you but what I want to do is to encourage you that you take
comprehensive notes and that is the notes notes will quickly flip that back
up again so traders this is what I’ve put in the members area these are
everything that’s on the slides I’m showing you you can download this as a
Word document make it your own so getting back to this so how do we
keep up with trade you know these of course in our journals but by typing
notes on the charts now also open as I mentioned early actually I already spoke
about this opener charts to study folder very very important so here are some of
the things that I’m going to recommend that you consider particularly you
you are not a profitable trader as yet okay you want to really fully understand
how channels and ascending they’re descending triangles work now remember
with ascending we’re really with channels and triangles you want to have
at least a three touch rule I want to really see three touches on the channel
or on these triangles you want to mark in your ball and bare flags of course
ball and bear flags only work in strong trending markets so if you map them up
and you can see what you’re doing here well hopefully I can get you to do this
because you’ll start to develop the habit of noticing these patterns when
you mark them up you can also start to develop the trust in how reliable a lot
of these patterns are so when you have these patterns appear what you then do
is you’re using one of our standard entry techniques such as say a t2 so if
you’ve saved got an ascending triangle then you have a t2 or a t1 or a rule of
one set up it just clarifies or proves up that pattern apply trendlines many
traders will use fractals and set up and marking your micro-trend lines just
start to quickly show you this and I’m also just quickly for an example if
you’re new to my channel or new to my form of trading a fractal point in
there’s one just here let me just mark this up for you so save it little dot
there that thought there is a dot there there there here there’s one here
there’s one there is one of your little hard to see this one here these are
fractal points and of course Bill Williams made fractal points quite
famous and he’s written a number of books once called proper tunity which is
also every name of this company trading chaos and I like to draw trend lines
using fractal points so if you take that point there to that point there for a
trend line break I’ve found that a fractal fractal trend line break just
makes it mathematically more so if we was to take this point here is
another fractal point I get a more I get a higher one right there so I extend my
point here so when I get a close under there I’ve had one two three four
touches of this trendline and finally I get a break can I just like that’s just
a personal rules so make a lot to use over here I’ve got you I’m going off the
screen here I’ve got a point here point here so there’s my trend line break and
what I’ve just done trade is a while I’m on this screen here I just thought I’d
show you that see old trade I was in that I was about to Manly go to break
even and I actually got in this trade a little bit late and this is a classic
example of where I’m marking up these charts and this is for just thrown
commentary here that is I had done what we call a t19 divergence trade here
higher higher high on price nice divergence and it come off it was a
nice winner but I also had what we called a rule of 1 entry there rule of 1
entries particularly on Renko right you get a lot of these are after a
divergence trade on the way down but they’re quite often of false entry so
here my comment it was wait for the ATR when coming off divergence to avoid
these false signals and I marked up down here yes so my entry where traditionally
I would have had an entry on this candle and actually it would have been my
answer my entry would have been on next candle but anyway but the point was my
ATR I did not confirm the entry and down here I had a T89 200b here and my entry
would have been on this second candle but because I was waiting for the ATR my
entry actually wouldn’t have been until this candle here but what it would have
done is just kept me out of this losing trade now just why I’m on this and I
know why we all love tips and ideas so we can see the blue line which is my
trigger line if I was trailing my stop the trigger
line training Renko makes a great line here to be trailing you can see we still
would have been in this trade so you can actually use the either the trigger line
or the ATR now if you don’t have an ATR you can be using a parabolic stop you
can use this form of moving averages etc now by the way yeah just to remind you
it is the Jurina globex accession so we are looking at a Renko to tick customer
Renko so there’s still already been some nice little la trade I’ve only just
fired off one this morning because I was preparing the PowerPoint but I saw this
and I just couldn’t help myself jumping in on this trade but let’s get back to
the PowerPoint now I warn you we’re going to jump around but hopefully
giving you ideas now if I’m throwing so much stuff at you go back and just
replay the video and hopefully you’re taking some some notes from this
trendline so I like to use fractal now I will go back to that because I’ve had a
lot of questioned what is a micro trend line a micro trend line is one here a
micro trend line is a much smaller trend line and that is we see price action
falls it comes up okay and then it falls again that’s a very small trendline
that’s what I call a micro trend line look you could almost call that one
there let me just show you we’re just trying to find a micro trend line free
traders look you could call this a micro trend line so you’ve got a number of
touch points here so it’s just a much smaller trend line and I like to draw a
micro trend lines when I’m trading with the trend okay so I could have drawn one
from there to there by the way that would have been a break so just I know
hopefully I didn’t confuse you but that’s what a micro trend line is now
what you can also do to keep busy and but also to train yourself is your
favorite race months so drawing a thirty eight fifty sixty one and of course
100% wide often won’t get a hundred percent pullback we’re going to get a
changed in market direction but become used to drawing in your favorite
retracements many traders will only take your retracement trade if they’ve got a
50% pullback I think you’re going to find and understand a lot of really good
trend trades if you do that but anyway the point is here marking the FIB
retracement also as you have a set up marking your indicator setups now that
is in your lower windows if we just look at this here we’ve got here rum let me
just see right here I had a t2 marketing so as you get various setups
on your indicator some look this is classic here this is a 2d okay mark it
in and makes it very very easy to go back at the end of each day and to
review your trade setups what have we got here is a consolidation and chop now
when you see your EMA is starting to whatever if you’re assuming your use
moving averages when you start to see price action consolidate EMA’s become
intertwined etc draw in a box you can use your fractals for an example because
what we know is virtually every time you have an area of consolidation you’re
gonna have a great breakout and so I’ve done a number of videos for members on
trading consolidation or what to be aware of and quite often and you’ll hear
me repeat many times quite often I’ll have two losing trades in an area of
consolidation then what I’ll do is I’ll sit it out and wait for a breakout but
when you do get a breakout quite often you get a fantastic move so when you’re
going into consolidation don’t be afraid of it mark them up you want to know
because that you can area consolidation or chop because quite often you’ll get a
really good move straight after that so get ready for that breakout and sorry
about my squeaky chair there I actually have what we call a standing desk so
sometimes I’ll sit down but and jump back up but somebody could recommend
this day traders you consider having a decide you stand it and just use a
draftsman chair which is just when you want to sit down
it’s much higher anyway another thing you want to be marking on your chart
says is waves 1, 2, & 3 & 4 & 5 just remember that after you’re getting 3
waves you’re probably getting closer to our potential market turn so when you
got these waves okay and for an example Linda rescue in a book whatever books
some a just can’t think of it right now are street smarts that’s it she
talks about a set up she calls Three Little Indians it’s after three waves
you’re more likely to get a turn so when you’re marking these up it just makes it
easier to remember to be looking for these a t10 sorry at t20 members you
know that at T20 identifies a successful of T20 in most cases we’ll
identify a new trend and a T20 – 1 is the first trade first trend trade after
T20 you want to be marking those up because the earlier you enter a
trade once the new trend is identified these are ones you can get some really
good runners with so it’s very very important you want to mark up when
you’ve got a sweet spot now as a reminder traders and I’ll tell my
members is a sweet spot is where you have all of your EMA’s confirming a
trend now if we look at this here on my anchor chart over here ok we can see
here that my EMA’s of what we call fanning out and I’ve got a fanning of the EMA’s
here on my entry chart if I go and by the way if I also use tick charts I just
don’t use Renko I just thought I’d show members this at them and non-members
that you might be using a tick chart now just one thing I will say we are in the
Globex session during a globex session on if you’re going to use a chick tick
chart you may consider using an t89 tick rather than a 233
because a 233 generally speaking there’s just a little slow for an example the
markets are the globex sessions Benno in three hours and this is three hours
of trading action we’re on our Renko there’s been four or five really good
trading opportunities where there’s been a couple on a 233 tick so you want to
change your timeframes so the point was is getting back to this here was to make
sure it is to type that in so what I’d be typing in here if I was
new or until you get used to recognizing this as a pattern type in sweet spot
okay sweet spot means you’ve got a fan in here and you got a Fanning there
getting back cups here we’ve got done marking when you’ve got higher highs and
higher lows which means what I’ve got an uptrend
well marking you’re getting lower lows with lower highs I’m in a downtrend if
you remember you’re going to be typing if you’ve got a t1 or t2 at t7 we trend
or counter trend a rule of one a ruler to a t10 t19 or of the trade type it in
as you’re trading it there makes it very easy for you to go back and to do a
count another little thing that I just want to show you is this and this is
very common dealing with hundreds now a full time traders as well it’s some that
could have got them all on and staying focus is this because you can go online
and you can get a countdown clock because a lot of people have trouble and
hopefully this comes up but on the recording so you can this one for me is
set to 30 minutes when you’re doing research and development work or going
back and doing stats it’s very easy because it’s boring to get distracted so
what just set a rule of making it maybe 15 minutes so what 30 minutes works for
me that if I’m doing R&D work or if so I forgot a type up or I’m answering emails
or whatever the boring thing maybe I turn the timer on okay and it means
then for the next 30 minutes are going to be 110% focused on
that project I just a little tip that I’d recommend that you consider is go
online just get a countdown timer there’s a lot of different types of one
it just makes makes it easier and staying focused the maximum move you’ve
achieved now going back to this chart here this trade here now that was only
six ticks now here you can see how easily would have been out to achieve
twelve ticks now what you can’t see is a trade book I’ve got down here separately
where I keep this manually in a separate trade book but mark it up on your chart
because it keeps you busy and so we can actually see here we still using the
trigger line would be in this trade we haven’t got a clear close under the
trigger line and even my ATR is keeping me in at this stage all right now we
notice here this yellow line here by the way is our floor pivot I can tell you
now we will go here about to get a turning point and for members here is a
1d setting up okay so you’ve got a 1d setting up as well so I would be I have
to admit if I was trailing here I would be taking profits right now before I
even get a close because this has been a great and by the way when you’re getting
12 15 ticks in a move if you’re after say $300 a day per contract you just
need two of those in a day and you’re there so and just on that point traders
if you’re trading multiple contracts it’s always nice to take a number of
contracts off at a fixed target move to break-even and let the others run but
let’s say another topic that we cover separately back to the PowerPoint okay
so the maximum move you would have achieved that plus the ideal stop now if
you’re in a fast moving market you may discover that you need to have larger
stops if you’re say and let’s go back to this chart again if you’re so using an
ATR you may find that rather than tucking your stop under your closest
swing low or above that you’ll swing high
you may have to just take it one tick under your ATR stop and flip or under
your parabolics stop and reverse now what you’ll usually find is then is your
stop maybe one or two ticks smaller something
for you to think about just wanted to throw that in now marking your pivot
bounces when you’ve got angulation or divergence double tops double bottom
mark them up is there any other patterns anything else that you’d also want to
mark up on your charts no as I mentioned and traders there is a checklist which
although keep these oh sorry let me take that back I put these on a Word document
so you can go on adjust but of course in the members area and as members you know
I’ve got extensive trade at checklists now if something can also just want to
show you on this point if you remember what you missed you’ve seen this slide
many times if you’re a new trader or trading hasn’t been kind up to you or
maybe you’re just looking at joining us this is what I recommend get plastic
sleeve folders type up the lists at work for you and this is exactly what I have
in front of me so I’ll have a couple of folders that I can easily flip just with
trading patterns now as I’m trading I’ll just be looking at the charts and I’ll
be flipping these and just reviewing patterns okay so as a visual reminder my
rules and any highlighted points are there so I can be flipping have all my
rules for an example la I’ll have down here do I have a t1 do I have a t2 do I
have a rule of one and I’m just constantly reminding myself and of
course I’m taking notes okay so as I’m trading and I’ve rule I’ve got a column
rule down one side so if there’s anything special I’ll highlighted and
so I’m taking notes as I trade that’s how I do it now I know for a lot of
experienced traders this is really basic stuff but if you get one idea
that’s what these training sessions are really are all about it’s just giving
you about one idea that may make a difference when it comes to trading so
traders in finishing off this video I want you to mark up your chance because
it’s going to help you sharpen your skills when it comes to pattern
recognition marking your trend lines marking your fractal brakes marking when
you’re in a period of an error of consolidation that keeps you sharp that
keeps you focused and it stops your mind from wondering as much which then leads
to boredom which quite often means it leads to looking for trades that aren’t
even there but also it’s going to allow you to keep your stats because when
you’ve got accurate trading stats it gives you a lot more confidence as
traders now for an example yesterday on CL let me just start quickly go back to
yesterday there were the way I was trading there were 18 trade 18 setups
and only three losses during the Globex session okay when you start getting
those and by the way traders that was for a pivot bouncing 89b rule of 1 to
t19 34b 34b t2 rule of 1 2D t10 t10 T7 1D ady when you keep you your
stats like that and the trade setups etc alright it keeps you focus but it gives
you so much more confidence as traders so as we close off traders if you’re not
already a member for a $197 you get all of my resources all of my setups as I
mention it’s actually 300 videos no you don’t have to watch them all they’re all
labeled and and there’s now I think about 15 different setups that I’d teach
you you focus on a couple I’ll tell you which ones to focus on and you build
from there so traders and members just as a reminder the book link is now in
the members area thank you traders

3 Comments

  • ANNE MAKE-It-HAPPEN

    May 10, 2018

    Great PROCESS—"Basic Stuff"…. perhaps NOT… a VERY Methodical Way to understanding your trading process—-laser focus approach on best practices for becoming the TRADER of Your DREAMS—A GREAT TEACHER!

    Reply
  • Phil Bonny

    May 19, 2018

    Love the quote from Aristotle!

    Reply
  • I Am A Day Trader

    October 20, 2018

    "Get the Competitive Edge Now!
    https://www.iamadaytrader.com/2018-check-out-the-day-traders-fast-track-program"

    Reply

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