This is a great interview with John Carter by Aaron Fifield.
For me the key points are:
- Difference between good and bad traders is patience.Patience to wait for the right setup and patience to sit in a winning trade. "I promise you that the markets are gonna be open tomorrow and there's gonna be another opportunity.
- "When you get emotional and you chase (a missed trade) you get yourself into a mindset that you really miss what's going on, when a real opportunity comes along you're just not ready. You're chasing and emotionally vested in something that really wasn't a setup. You usually end up to be the last to get in."
- "I went from 10k to 100k so I thought wow I could go from 100k to 1m. Instead of focusing on trading I started to focus on the 1m. That changed the trading approach. I can't afford taking this loss I have to make it to break-even.'" This was distractive. Don't try to make 1m!
- Books: Mark Douglas The Disciplined Trader and Trading in the zone.
- The biggest problem with being too fearful is that you wait for the confirmation. The problem with waiting for the confirmation in trading is that by the time something is confirmed and all the indicators are aligned that is usually the time to take profits. Everybody is looking at the same chart and if everybody thinks that it looks good than everybody is in position so nobody else is left to jump into and move the prices in your way. That coincide with the saying that the best trades are the most uncomfortable to make.
- "Sooner you get to the point when you focus on probabilities and you let go the emotional attachment to the outcome the sooner you become consistent."
- There are three type of trading: scalping/day trading, swing/position trading and investing. "The best thing I've done I took my 5min charts and throwed them away."
- "The best traders I've met they don't care what's going on, they don't watch the news, the don't look at the latest tips", they just focus on their setups. "The less information you have the better you will do."
- "You don't do the same trades all the time. Markets are changing. There are three positions to have, you can be long, short and flat. Longer I do this I more realize that flat is one of the best positions. Because if you are flat your mind is neutral. If nothing you can do go away and just do something else, be patient. If you can be patient in the course of a trading year, there is gonna be one or two days in a month where if you are focused and you have a neutral state of mind you can dive in and have a larger than normal position and make a killing. Then get out and go flat again. Don't trade just to get read of boredom.
- "Out of the money options are designed to expire worthless."
- "I don't look at a chart more than a split second." Good setups are right there in front of your face. You look at a chart longer it means you're trying to force something onto that.
- I would rather have three or four larger positions than 18 smaller ones. "Diversification is for people who don't know what they're doing." If you see something you like get in and focus on it instead of shotgunning an hoping for the best. Focus is the key.
- "In early years I had a pressure to make a big trade. The main difference now is the confidence in my skills."If I don't make money today that's fine, markets are gonna be here tomorrow".
- "This is the only profession on planet where you have to develop confidence in a situation where the result is always uncertain. When you feel comfortable to be uncomfortable then you are there. "