"Traders are rewarded for a combination of the intellectual and psychological ability, not for the mechanical ability." James Dalton
Day trading is one of the most complex and gripping business you can imagine which involve a great many different aspects of our human mentality and nature on the whole. Certain of the most important abilities for any trader are to interact properly with own feelings, emotions, and even presence of a will and ability to work with one's own subconscious mind.
How can we achieve a state where all this complex abilities work in harmony together? Is there a way to overcome the fear our subconscious mind is sending all the time when we are about to enter a trade?
Yes, in my opinion there is a way to master the complexity of trading:
It is confidence in one's own action.
Without confidence in ourselves we can hardly achieve anything. This is universal and not a big secret.
But how can we as traders work on our confidence? I will tell what I did to come to a state of confidence which helps me to follow my profession as trader.
When I started to be interested in trading, 15 years earlier, there were a lot of different methods and approaches, like today. There was no clear line or education just promises to get rich quickly. I started with Fibonaccis, Gann, Elliott Waves, Measured Moves, Gartleys, Planetary Harmonics then moved on to Technical Analysis and all sort of known indicators.
At least for myself no of these methods and promises work out for me. I am not saying that this methods doesn't work. But certainly not for me.
Very late I moved on to James Dalton "Markets Profile" and got in touch with "Order Book" which I haven't understood at all. From this time on I felt that there is more then crossed moving averages, divergences, Bollinger Bands, channels, zero lag oscillators etc. All this stuff is always showing you what happend in the past. So I have to rely what happened in order to decide what is going to happen. This is not my personality.
During this time Peter Davies from Jigsaw Trading started with a project called "Jigsaw Trader". It was the first time a DOM was affordable and completely new designed.
It fascinated me to deal with this topic because now I could listen for the market what he is talking about rigth now, in real-time, studying its behaviour both in real-time and historical. Hunting the possibilities, smelling a subtle edge.
It was the start to begin to understand:
- what a auction is
- how a auction works
- how market orders influence limit orders
- how limit orders were pulled or stacked
- how market influencers play with market participants
- the importance of volume
- where support / resistance areas become visible
The order book approach allows me to read the Market, to listen its breathing, to feeling its intentions, to handling continual contradictions, to act in such uncertain and ambiguous Market environment, and at the same time keeping clarity of mind.
This means confidence to me!