S&P 500 Emini Simple Trading Part 2

“Any idea, plan, or purpose may be placed in the mind through repetition of thought.”
Napoleon Hill 

Chapter 1 – Empty Your Head And Start Over

As we begin our journey to learn this business of trading we are a blank slate, an empty vessel. Hungry for knowledge and “hot tips”, we are extremely vulnerable. If someone says something with a little conviction in their voice and enough swagger in their walk, we tend to believe them. If they say it enough times and it goes unchallenged, we eventually write it on the tablets of our hearts. This is our first big mistake.

“Yet who are we to question the teacher,” you ask, “when we ourselves know so little”?

You, friend, are entering a world that is highly unregulated. There is no board of standards and far too often, a lack of integrity. What you learn here, will enable you, among other things, to vet any “trading truth” that comes your way. You will learn to accept nothing on blind faith. If it really is a “truth”, upon closer inspection it will stand up and bear the light of day.

“The soul is dyed the color of its thoughts. Think only on those things that are in line with your principles and can bear the light of day. The content of your character is your choice. Day by day, what you do is who you become. Your integrity is your destiny – it is the light that guides your way.”  ~ Heraclitus

The ancient Greek philosopher speaks to your eternity, I speak to your decision to become an Emini Trader. We are separated by centuries, yet we make the same point. For those who are not new to trading, the task becomes far more difficult. Your slate is covered and your vessel is brimming. If you are taking this course though, it means something is lacking in your Emini Trading Business. Perhaps you are struggling or perhaps you just feel that you are not operating at 100%. If there is a struggle, or a failure to perform (real or imagined), we must first identify what it is you already believe about trading and work from there.

This is a difficult exercise and will take some real effort on your part. You can begin right now and I encourage you to do so. However, it will take days if not weeks, to uncover all that you really believe about trading. What you believe is directly related to the results you receive. If you want to change what you receive, you must change what you believe. Keep in mind, that this has nothing to do with what you “say” you believe, but everything to do with what you “actually” believe.

For this exercise (exorcism) you will need 

  • 1 – Legal Pad
  • 1 – #2 Lead Pencil

The digital equivalents will suffice but the elegance will be trashed. Some of you are already writing as you read and many are scratching your head because you’ve never really thought of it in this manner. Let me walk you through a few examples of what some people believe. The examples may or may not apply to you and I’m not making a judgment (at this point), as to whether or not these are actual truths. I just want to get you moving in the right direction. Much of what you already believe may be factual, rock-solid truth. If it is, it will stand up to our litmus test. If it is not, we want to identify it, isolate it, and replace it with something that is.

Commonly held trading beliefs:

  • Try and try. Pretty soon you’ll succeed.
  • To make money you can simply copy other traders
  • The S&P is a sucker’s bet.
  • (Something) always happens.
  • Past performance is no indication of future performance.
  • What’s obvious is obviously wrong.
  • Commodity trading if for speculators.
  • As long as I have discipline, I’m safe.
  • Commodity trading is only for high net worth individuals.
  • You need to have lots of information before you can trade profitably.
  • A trader’s number one enemy is his emotions.
  • Prices are easy to manipulate.
  • I always get stopped out to the tick.
  • The big boys control the market.
  • Wall Street controls the markets and it’s hard for the little guy.
  • You can easily make money in the markets.
  • It’s hard to make money in the markets.
  • Gaps must be filled.
  • The (name a market) always leads the way.
  • They ran everybody’s stops so they could take ’em up/down (pick one.)
  • They have to (name anything) because (name anything).
  • CFRN Weekly Trading Zones frame market action before it happens.
  • There is a Holy Grail.
  • There is no Holy Grail.
  • If I can save a dollar per round turn that saves me money.
  • It requires too many cars to trade the S&P.
  • If my broker also trades that can help me be a better trader.
  • You should only be a buyer because the market always comes back.
  • DeWayne has a luxurious mane.
  • They owe us (something).

For those of you who do know a thing or two about computers, you know that when you delete something from your hard drive it doesn’t really go away. It sure appears to be gone as we pull at our hair and madly search every nook and cranny, every file and folder, even though we can’t see it, it’s still there until we overwrite it with something else. That is one of the key elements of this exercise. Once we have accepted something as truth and etch-a-sketch it on our frontal lobe, the only way to get rid of it is to replace it with something that has real value. Monitor your thoughts over the coming days and whether you’re trading or walking the dog, as you observe one of your “trading truths” in action or as it simply crosses your mind – write it down! 

Learn to Trade the S&P 500 Emini

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(to be continued…) 

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