c18 JWBT016-Busby September 30, 2008 15:3 Printer: TBD
Psychology and Discipline: The Winner’s Edge 179There Is No Substitute for Preparation
Begin planning for the trading week on Saturday and Sunday. Use that time
to study the markets and gain a mental picture of prices. In relation to the
annual open, are prices up or down? For the current month, are prices up
or down? During the last week, what happed with prices? Find support and
resistance levels and consider trading strategies to use them effectively.
Take the time to check an economic calendar and plan out your upcoming
schedule. Know when major news is expected and learn what the experts
are predicting. Are numbers expected to be good or bad?
When each morning begins, spend a few minutes gathering important
numbers. What was the Globex open, yesterday’s high and low, and other
important prices? Write them down and devise a strategy around them. Can
the current market be classified as a bull market or a bear one? If bullish,
be careful if going short, and vice versa. You do not want to buck the trend.
It is best to go with the trend and ride the market’s wave.
If you are well prepared when that opening bell rings, you will be a
better trader. You will be ready to take advantage of winning opportunities.
The market will not take you by surprise. Preparation will also keep you
from taking bad trades. You will know the traps that may be lurking in the
numbers.Knowledge Is Priceless
During a recent trip to Chicago, I spoke with Paul Eppen, an executive with
OptionsXpress. Paul is a believer in education and said that success breeds
ignorance. That is, traders experience some success and then they give up
on learning new strategies and approaches. They think they know every-
thing there is to know and they are content to stay in their safety zone.
Maybe that fact helps explain the short life of floor traders. To survive in
the markets, a person must continue to learn and adapt to new environ-
ments. Those who do not continue to learn will be short timers.
There have been so many changes in the financial markets within the
last few years. Those who have not continued to learn and update their
skills have been left behind. They are like fossils drying out in a field, in-
teresting but no longer vital. The only way to keep current with technol-
ogy and products is to continue to learn and upgrade skills. There are so
many ways to gain knowledge. The exchanges like the Chicago Mercantile
Exchange (CME) offer courses and seminars. Go to http://www.cme.com and
check out the offerings in their education center. Brokerage houses also
try to help traders and educate them. For example, visit the OptionsXpress
site and click on the education tab. There are also financial forums and
conferences where a great deal of information is disseminated. At DTI and