Trading with ConfidenceBy: Lance Ippolito

Emotion is the enemy of successful tradingMy goal: To building confidence in your trading. I hope this discussion adds value to your trading and your emotional state during the trading day. I believe trading is the most difficult profession in the world…

Why? Because there is no training before starting. Think about it a pilot goes to school before flying a plane, a doctor spends years in medical school before working with patients, a baseball player spends his whole life hitting baseballs before playing professionally.

I truly want to thank everyone for attending!

Topics to cover●My story

●Confidence the most important factor when trading

●Overcoming hardships

●Techniques

●Getting in-sync with the market

●Your advantage

●Professional trading mindset

●Questions

My storyA wise man once said: The feeling of being invincible is addicting. You never know your invincible until you come down from that cloud and realize how reckless you were.

This story is true. Early in my career I was on this cloud I felt invincible. I had a beautiful home, money to spend, and traded like I was unstoppable.

When I fell off that cloud I realized how reckless I was. I had to start from square one…

It was painful!!!

My storyIt took years to get back on my feet…

So if anyone can relate to trading with confidence it's ME!

My goal is build everyone’s confidence here!

You're already taking the step in the right direction by investing in your education

ConfidenceConfidence in trading is everything!

I can tell you all the indicators, patterns, analysis in the world but without having confidence in your trading there is nothing.

The reason we use indicators, research fundamentals, draw patterns, is to give us confidence in making a trade.

You are the one who makes the decision to click the mouse to enter/exit!!!

Overcoming hardshipsI want to stress this: Everyone has/is/will experience hardships when trading.

With these hardships comes a beautiful opportunity called: Learning

Common hardships I experienced or have spoke to traders about:

1.Fear of entering a trade

2.Fear of losing money

3.Fear of being wrong

Overcoming hardships1.Fear of entering a trade- I open up a new account or have capital to

trade with yet I am scared of entering a trade. This lack of confidence eats away every minute while debating on entering a trade. Then 10 minutes go by and darnit! I missed the move.

How I overcame this: I made myself accountable for the trade. I set up a parameter on the trade before entering so I know how to combat every move.

For example: I buy SPY at $205. I will automatically put my targets out and my stop on after initiating the position. I will also minimize my P&L screen and the SPY chart.

My work is done!

What help is it for me to stare at my P&L and chart?

Overcoming hardships2. Fear of losing money: Losing your hard working money is NO FUN let’s be honest…

I hate losing! But if I lose money and I know I did everything correct it's OK.

An example: I have experienced traders getting IN and OUT too soon when initiating a position. Say I get long a position in /ES and right from the start I am right on direction and my position is going up with my P&L showing a + gain. I see my P&L up $ and I quickly get out to “Lock in my gains”

Why did I get out so soon if the trade was working out? A common excuse

“I want to lock in gains or to I hit my target”

Hit my target?Before the trade was executed I should have set guidelines for entering and exiting.

How I learned: If I am long 10/ES contracts and my targets set. I will follow my guidelines. I will stay in the trade until all targets are hit. For a stop: I exit the trade at the first -800 $TICK as a stop or set certain stop.

$TICK = NYSE up / down tick +800 bullish -800 bearish

Note: I am developing an indicator to assist with entries, exits, and stops, to minimize emotions when trading.

Overcoming hardships3. Fear of being wrong: This is tough because we are programmed to do the right things from an early age. When we are wrong at something usually we get punished we learn that too from an early age. This fear of being wrong applies to many traders (Myself Included)

For example: I am an a position and its stagnant… 30 minutes goes by and nothing is happening. I sit there nervously anticipating a move (hoping that I am right on direction) eventually my nerves take over and I exit the position.

Overcoming hardshipsEverything worthwhile takes time… If a positions moves exactly when I enter great!

Sadly this rarely happens… Let the full trade take its time.

It's like a batter in baseball take a few pitches till you feel comfortable in the trade.. If you strike out at least you stepped up to the plate and took a few swings!

A wise trader once said...

Go ahead take the risk, if you win you will be happy, if you lose you will be wise.

Techniques 1.Developing a trading plan: When I got back into trading full time. I

went to the office supply store. I bought a poster board with markers and in BOLD letters wrote my trading plan. I posted this next to my trading desk.

If you write something down, it makes yourself accountable, therefore you’re more likely to follow it!

My trading plan 1.No trading until 10am ET

2.No trading around economic releases

3.No trading after 3:30pm ET

4.Positions will not exceed 10 contracts

5.I will stop trading if I lose X amount of $

6.I will only trade by my levels

7.I will analyze each trade to look for improvement

8.Live to trade another day

Techniques2. Take a step back from the trading desk and look at the big picture:

Looking at smaller time frames (5m charts) I find it smart to get up look at the overall market as a whole. From the Daily, Hourly, 30 Minutes, 15 Minutes then take action.

During this time I will also look at other markets like the Yen, Bonds, Gold, Crude Oil to see how they are trending in the day in relation to the S&P.

TechniqueNext time your trading. Set an alert midday. Roll your chair back, stand up, and take a deep breathe.

Go ahead try it!

Mark it on your calendar right now.

CalendarMaking this a recurring alert! You can even add this a couple times a day.

Go for a quick walk, take a deep breathe, eat a snack. Clear your head!

2 minute break

Getting in-sync with the marketHow to get a feel of the markets? I like to go back to the strategy of looking at the market from the big picture. Before the open and after the close I will look at the indexes and stocks/futures that I trade to get an idea of what's to come in the days ahead. Also, on Friday’s I will do a week in review of buying/selling levels and foreshadow future price levels in the names I trade.

Note*: This is when I compute my levels.

These levels build my confidence when trading!

Getting in-sync with the marketWhat does an athlete do before a game?

They warm up! Whether it's taking a few swings at the golf course, taking batting practice, shooting lay-ups. Go ahead warm up with your trading day.

The warming up practice can last for hours,days, or weeks until comfort is achieved in the market. This could be trading small, doing high probability trades, or looking at how markets react to price points you set.

Your advantageThe strategy of trading is not to beat the market…

I want to take my share from Mr. Market and get out!!!

Unless I am trading with billions of dollars I am small shark *an AlphaShark :) in the ocean. This is an massive advantage because I am not moving the market. I am taking a small piece and getting out!

LANCE

Mr. Market

Yummy!!!

Your advantageThe end result is to develop a professional trading mindset.

Advantages:

1.You will have the mindset of those who don’t. The newbies, the fish, the weak.

2.The whales (large funds) who are trapped in large positions having to act slow taking days to liquidate a position.

Professional trading mindsetGreat trading is like a balancing act: Each trade requires Caution and Boldness

Caution to be patient, the courage to get in and the courage to stay in a winning trade, and the caution to protect gains once achieved.

Most importantly: The courage to admit I was wrong and to get out!

The market doesn’t care if the setup was a good one! It’s gonna do whatever it wants!

Assignment Take 5 minutes of your day and WRITE a trading plan.

Post this next to your trading desk. Follow the plan this upcoming week and at the end of the week evaluate your trades.

QuestionsContact: Lance@alphashark.com