Trade to Win: Proven Strategies to Make Money

Chapter 16. Beyond the Numbers

In the basic trading class at DTI, we explain that the DTI trading method is like a three-legged stool. Each of the legs is needed if the stool is going to function properly. If one leg is absent, the stool will collapse. Trading resembles the stool in that it, too, has three important parts to its foundation: time, key numbers, and market indicators. Without each of these fundamental elements, you will not be a good trader. You will not be able to read the market's tape correctly and consistently make winning plays. Like the stool, without all three legs, your trading will not have stability and you will not achieve success. Yet, effective trading requires far more than mastering these three basic quantifiable skills. It requires an array of other talents and abilities including discipline, impartiality, persistence, attitude, and commitment. In addition, trading involves a great deal of psychology. I will discuss that in a later chapter. Here, I want to talk about some of the attributes of effective traders. These are the intangible elements of trading that are so powerful in determining the success or failure of a trader.

WINNERS TRADE THE NUMBERS

Sometimes I stand in front of the classroom and ask my students, "Is the market going up or down today? Do you want to go long or short?" I generally see a hand shoot up and one student boldly answers the question. "The markets are bullish, and I think we're going up." On any given day that might be correct. ...