The 7 Words You Must Tell Yourself Every Morning

I was once a gambler, but now a trader.

I once blew up a 200k account within a matter of weeks. Up until that point, I thought I was a trader. I opened up a trading account during the last stages of the roaring 90s internet boom. For a while things were great. So great that I almost left graduate school at 23 and did move into a high rise penthouse apartment foolishly thinking that after a few months I had made it as a trader.

Morning rituals are said to lead to success. Here was mine:

I'd get up 10 minutes before the market open. Maybe brush my teeth but definitely turn on CNBC. Grab a napkin or whatever else there was to write on and jot down whatever stocks they were talking about. That was the day's trading list and I'd jump in and out of stocks from these "well researched" lists. Depending on my gut feel, sometimes I'd be out in a few minutes, sometimes a few weeks.

Rule number one in my foolproof plan was to always hold when a stock tanked, because stocks always bounce back quickly no matter what! It wasn't until a little bit later that I'd find out this rule only applied in the wacky internet boom.

Some days I'd lose a little, some days a lot. Other days I would make insane percentage gains. At the time I didn't realize doubling up the trading stack in one week was not normal. In just a few months the minuscule 5K stake had turned to $200,000 and I was living large.

Until I wasn't.

In a few weeks it was all gone, along with my dreams. My dad, who has taught me more life lessons that I can count (like when he hit the 9 year old me with a baseball), told me something I'll never forget.

Go to a casino son because you are not investing, you are gambling.

There is a fine line between investing, trading and gambling. Investors search for value. Traders search for momentum. Gamblers hope to get lucky and search for the next fix.

I was once a gambler.

Over fifteen years later, my morning ritual has changed. I now get up at 4:30 am sharp. I meditate, exercise, read and listen to a little sports talk radio before I get my work day started. Once I am ready to start my research before the trading day begins, I say the following 7 words:

Trading without a strategic edge is gambling.

This sentence has become part of my morning ritual. A habit. It has kept me from making god knows how many bad trades.

Now the fix is not the trade, but the search for the edge before the trade. I no longer allow the emotions of a degenerate, namely fear and greed, to guide me. No more micro-managing and fear-of-missing-out. All because of 7 simple words.

If you are trading without an edge, let me know how I can help you. We'll talk about the BOW Swing Service (up 30%+ in a tough 2016 market) and free educational posts and videos, personal one-on-one mentoring or just shoot the breeze and get you pointed in the right direction.

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Trading Meditation: Taking Small Losses Is Not So Bad

It hurt bad, yet it wasn't so bad.

Once when I was 9 years old my dad hit me with 10 straight pitches in a row.

This was after I kept jumping out of the batters box while Pablo fired off 3 strikes right down the middle of the plate. Pablo was a giant of a nine year old and threw pitches that had to be shot out of a cannon. I was scared every time he looked at me and wound up, so I'd start moving away from the plate before the ball even left his hand.

I could sense that my old man was embarrassed.

After the game, there was silence for most of the walk home. Before we got into the house, he told me "it's not so bad".

Huh?

Really, it is not so bad. I'll show you tomorrow.

The next morning Dad took me into the backyard, put a bat in my hand and proceeded to hit me with 10 straight pitches.

I cried.

I told him he was a crazy old Indian that didn't know anything about baseball.

Dad laughed, waited for 10 minutes and let me settle down before we went back into the house. Then he asked me how bad it hurt.

Not so bad.

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100 Trading Quotes To Put Into Action And Change Your Life: Will Smith On The Past, Present and Future

In a perfect world you as a swing trader would never look in the rear view mirror, would always be in the now and have a crystal ball that pointed you in the right direction. If it were only that easy.

In reality, many of us can't let the past go, let the present slip by and fear the future.

1. My Story

Let me tell you a personal story. When I first started trading over 15 years ago, I got lucky. It was the late 90's and the dot com boom was in full effect. Without any trading knowledge, I took $5000 and road it to six figures in a very short time. Not realizing I had caught a ride on a once in a lifetime market, I thought I'd found the holy grail.

We all know how this story ends. As the market turned so did my account, and the $120,000 account was down to $50,000 in a matter of days.  Only if the story ended here.

Rather than appreciate the $50,000 I had lucked into, I could not get past the fact that it was once $120,000.  Rather than take that 50K and actually learn how to trade it, I looked at nothing but that $70,000 I had lost.  Every trade I made was an attempt to win back that 70K. I was haphazardly entering positions with no plan, pulling out before targets were hit, and taking loss after loss trading scared.  In essence, novice Paul was living in the past, ignoring the present and fearful of the future.

2. The Quote

I recently came across a wonderful Will Smith quote that encapsulated how I should have looked at my 50K:

Sometimes you have to forget what's gone, appreciate what still remains, and look forward to what's coming next.

To be a successful trader, truer words have never been spoken.

My story is not uncommon.

In my time mentoring dozens of students and speaking with hundreds of traders, I continually come across traders who are constantly trying to make up for losses instead of trading in the moment. What happens when you trade like this? Most likely, you will take trade too big for your account, take bad setups, lose patience, micro-manage positions and constantly fear what happens tomorrow.

3. Trading Application

If you have suffered a big account loss, I want you to do this right now:

Write down that loss on a piece of paper. I'll give you a minute . . .

Now rip up that paper and throw it in the trash. You will never think about that loss again. From this point forward you will be in the present and focus on what you have and what it will become as you focus on the process that will eventually lead you to success.

You will become a winning trader. The 100 Quotes To Put Into Action and Change Your Life Series:

Quote 1: Nehru on Caution as Risk

Quote 2: Bruce Lee on Creating Opportunity

Quote 3: Machiavelli On Risk Management

Quote 4: Michael Jordan On Limits and Trading Scared

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