A lot of people get overwhelmed when they first start trading whether you’re day trading, swing trading or option trading. Even when you’re just picking up trading and trying to learn to trade stocks, there’s a lot of stuff to learn.
When you’re trying to import all this information into your head, what do I look at? What’s important? What’s not? You don’t really know because you’re trying to get everything and you’re not sure what’s important.
Mindsets of a Master Stock Trader
But what I want you to understand is that by simplifying things allow you to trade more peacefully. Now, I do have a book that focuses in a lot on inner mind, psychology, peacefulness, and inner game kind of stuff.
That is called Mindsets of a Master Stock Trader.
If you go to our website, tradersfly.com and rise2learn.com and you go to our ‘Books’. A great book for all of those of you that are interested in emotion, psychology and trading mindsets.
Definitely check it out. Moving on this topic, what I want you to think about here is when you’re looking at a trading screen something like this.
There’s a lot to digest from it.
Let’s start at the top, we have the stock price, moving average 50-day and exponential moving average.
We’ve got volume, a moving average on the volume and we’ve got a MACD. So a couple of indicators, nothing major. But still sometimes all these signals could really just make you emotionally upset or anxious.
The way to really combat this is to split things up into a couple different areas.
What I’ve done is I have a few different tabs, where typically I’ll just look at something simple as this one. Moving average, the price and the volume.
Then if I want to check something like a Bollinger Band, I’ll hop on over to that area
But I don’t usually implement or look at something consistently. Something that’s very busy with a ton of indicators. So what I normally do is just hop around from tabs.
Otherwise, when you have all these lines there, it starts to get a little bit more confusing.
So find a view that works for you that’s simple, one indicator or two at most, that usually simplifies things.
Once you start getting into these and you start hopping around, ultimately what you need to do is just kill one of these.
Then get rid of the moving average 50 and the 9.
That’ll allow you to be a little more peaceful to see seeing what’s really there.
Think of it like your house and if you’ve got a cluttered house, where toys are everywhere, there’s food out left in the kitchen, there’s plates there’s dishes to do — there’s just so much stuff to do. You typically can’t find things because of the huge mess.
When you clean things up, that makes it a little bit easier. That’s really what you’re trying to do when it comes to trading stocks or when you’re looking at charts or your panel.
When you have something a little more clean, it allows you to be a little bit more mentally sane and less anxious about it. Giving you the ability to trade a little more peacefully.
You don’t have to be that complex on trading indicators — they’re not as important as you may think. Position and money management is much more important.
Let’s say you’re looking at your market watchlist.
You’re seeing all these things in these numbers and that’s just a lot of stuff. When you see these kinds of movements and all these numbers and signals lighting up like a Christmas tree.
Do you really need the bid and the ask and the size? No.
Start customizing your platform
Do I need the high in the low? Probably not. Do I need the open? No. Do I need the volume? Maybe Do I need the 52-week high and low? No, because I don’t check it that often. Do I need the ask? No, because I’m looking for the price. Do I need the description? No, because I know that the ticker symbol.
All of a sudden you simplify things.
We’ve got a much more simplified version of cleaned up clutter that is a lot easier to see and read. It allows me to look at things more peacefully. Focus on what I need to focus on rather than getting into the nitty-gritty with all the other details.
Learn to simplify things including:
1. Your technical analysis on the charts.
2. Look at different panels and platforms about 5-20 minutes to customize these things based on what’s important to you.
When you’re looking for things quickly you just need to only see a few things. When you’re looking at an options platform, it’s the same way here.
So here I have a lot of strikes open but if you’re only trading things maybe more closer to the money.
You might only need 20 strikes and you might not need a lot of the other strikes. The open interest is what I like to see and the probability in the money. But for you it might be something different.
You could customize things. Every platform is a little different.
In this case, do I need to bid and ask? No, I don’t. So now it’s simplified.
That’s all I really need to see. It allows me to quickly hop to things. It allows me to quickly spot things. It allows me to trade a lot more peacefully.
Do that for your platforms, charts and positions. If you’re trading in a certain positions like we’ll go risk profile right here.
Instead of doing one contract at the 291, 321and 360, simplify it — average it out.
Do the contract at the 332 contracts something like that.
I have two contracts here on Netflix rather than trade 50 stocks and try to manage all 50 stocks.
Rather just trade three or four stocks but with more shares.
That’s the whole point of the stock market.
You could just stack up more and more shares or more contracts and it makes life easier.
