Two buy setups with 20% plus profit potential :BPZ and GPOR

Personal Effectiveness Blog

As there is lot of psychology related discussion on this site which is not directly related to trading, I continuously get emails and requests for focusing on this subject daily or asking for books or resources on the topics.

As there is overwhelming demand for this topic I am starting a new site focused on psychology for day to day life for Stockbee blog readers.

http://stockbeewp.com/

The blog will focus on personal effectiveness, leadership, motivation, self efficacy, expertise development and other related topics.

Situational Awareness (SA) is important trader skill

The key skill to develop is to quickly get out in such situation otherwise you are a sitting duck. Months worth of profit on individual stocks can vanish in minutes. 

That is the trader mentality you need to develop. 

For that situational awareness (SA)  is so critical. You have to mentally rehearse scenarios. See my earlier posts on SA. SA is an aviation terminology and it teaches pilot skills to be prepared for all possibilities. 

If things improve in the market it is easy to get back in. But first 10 priority is to not lose money. Then make lot of money. That is when compounding works in your favor.

If you can compound at 5% per month without drawdown you end up up 80% for the year. If you can do 7% per month you end up with 125% return. But once you are in drawdown, you waste time digging out of the grave,

Manage risk first

This market is at extreme level. At this stage your first priority should be to not lose money.

It is easy to get back in. That is how as a trader I think. At first hint of reversal I was out of my few open positions. That ensures the gains made in January are protected. 

Objective is to make money without drawdowns.

It is waste of time to crawl back from drawdown. 

Most important trading decision

On a daily basis I get over 100 emails from members and readers of this blog  and I have observed some common problems.

The most critical problem many of you face is inability to decide your basic trading instrument or horizon.

Everyday if you keep changing your basic time frame decision then you will never get anywhere.

Why do people change time frame, because they get allured by other peoples trade or results.

If someone talks of his day trading success then many run to become a day trader.

If someone talks of option bomb , then some run to become bomb makers.

If someone talks of position trading then some abandon what they are doing and run to copy that approach.

If it is Monday then it is swing trading day, on Tuesday you want to be day trader, Wednesday you want to be Option Trader, Thursday you want to be Index futures trader, Friday you do not know what you want to be.....

Each of these instrument or time frame would take you anywhere between 6 months to 3 years to become good at it.

Unless you are running billions of dollar you don't need to be multi strategy hedge fund.

Most successful traders specialize in one style or one instrument. There is a reason for it, expertise is very task specific.

Expertise is developed by narrowing your focus further and further.

If you think you can be jack of all kinds of trading you are fooling yourself and you are wasting time.

Stop flirting . There are always temptations, but at some stage you need to select your niche.

Make the darn decision....

Learn the language of setups

Setup selection is key. Setup selection allows you to condition your behavior. It allows you to develop your procedural memory. It allows you to automate your thinking.

When it comes to setup selection your time frame is very critical. A setup that is good for day trader may not be good for swing trader. A swing trading setup may be extended setup for position trader.

This is the setup idea behind Stockbee Trend Intensity breakout. Unless a stock fits in to that setup I do not look at it.

While the setup idea for Episodic Pivots is very different . It is for position trading a specific news catalyst on a neglected stock .

The STIB setup is classic swing trading setup which has been around for hundred years. You find a stock with momentum, wait for a sideways move on it and then buy on next b/o.

Same setup a pullback trader can trade as a pullback setup to a MA or channel. Where they buy on a touch to channel or MA.

Tumbler  ( a member) trades a news based day trading setup. His setup idea is similar to the EP, but it is on day time frame. What he looks for is a stock with some news and then buys it on some intraday pattern looking for small moves.

CKbergin (a member)  has described to you a setup idea to trade good fundamental growth stock on pullback. His setup is geared towards position trading.

If you understand a setup and the conceptual logic behind it and the market structure that supports the idea then you can understand it and you can master it.

As against that many are chasing picks. They are constantly looking for someone to highlight stocks to buy or sell. They are dependent.

Your objective in trading is to setup your own trading factory. Once you setup a well designed trade factory, your setup scans will bring you stocks to buy or sell. Then you can take a decision qualitatively to decide between those ideas. The more you do the same thing you become better at it.

Profit is an outcome of such process driven approach.

As against this many are just flirting from one idea to anther, from one pick to another, constantly changing setup. So they are constantly in flux.

Then there are others who have secret setups and are looking to show you how good their system is without telling you the logic. If you want enduring edge you should avoid these traps.

Besides setup the more important things are also how much to risk on a setup. Your profit depend a lot on how you manage that. A trader might boast of a 25% profit on a position but if the size of his trade was just 2% of his account , its not going to move the needle much.

These are all issues which you need to get in to depth and understand them at microscopic level. It will take you 6 month to a year to do that.

If you do that then you will develop self efficacy beliefs and your self talk will change to "hey I can make 50% plus on my own using my setups" "hey I know how market works" "hey I know how to find stocks to buy daily on my own", "hey I know how and why my setup works" "hey I know when to push the pedal and when to play for beer money" "hey I know what is behind any ones claim of secret system" "hey I can do this on my own"

That is the end goal you need to reach. The objective of this site (members site) is to help you reach that goal as fast as possible.

If you can reach that goal then you don't need this site or any one else to tell you how to trade.

9 Breakout setups

 FSII ABR CLH WTI HAL FTNT UCTT FTI WGO

FLY might fly 10% or more

Another stock in the same sector AER is my current position. Not likely to be fast mover but can make 10% plus move from here in next couple of months. Value kind of play.

How to use conditioning to improve your trading (Part2)

Using Conditioning to improve your trading daily

Thought conditioning is a tool used to condition your behavior. Thought conditioning works by changing your thinking. To do successful though conditioning you need to constantly remind yourself of the thoughts that need conditioning.

Thought conditioning works by changing thinking sequences. Techniques like checklist, constant reminders, visualization, simulation are used to condition your thinking. In workplaces though conditioning is used to reinforce certain behavior. Good example of thought conditioning is in hospitals and restaurants where a constant reminder of "Wash your hand" is used to condition employs. Similarly in aviation sector constant thought conditioning is done about SA, accident avoidance, safety, suspicious behavior etc.

There are many ways to do thought conditioning and as usual advertising industry is at forefront of using thought conditioning to change your behavior. And we will look at some of the techniques used for thought conditioning and how they can be incorporated in to your trading.

Right mind frame is critical to your trading success. A right mind frame allows you to identify market opportunities quickly. It allows you to make quick decisions. It allows you to avoid big losses and respond to market changes quickly. If you want a quantum leap in your trading, you need to condition your mind to be in trading mode. To do this successfully you need to develop a method to constantly keep your conditioning aligned to the market opportunities. When the mind and market is aligned you will be in winning streak. When the alignment breaks down you will have frustration and losses.

One of the ways I use thought conditioning is by using series of checklist every day. These are tools for conditioning the mind to think of issues before open.

Are you bullish, bearish or neutral on the market?

What is your plan if your view is bullish on overall market?

What is your plan if your view is bearish on the overall market?

What "method" is driving your bullishness or bearishness

Is it logical or based on questionable premise or second hand information.

What is your pre market trading plan

What data sources you must monitor in the morning for that

If you identify a good opportunity in pre market how will you enter it

Have you thought of where you would put stop, how much you will risk on them

What will you do if after entry it does not act as expected

What is your plan for managing :"each" of your position

What is driving that decision

If I am going to use EP in the morning everyday am I organised for it

Is there a set routine for it

Is my broker/software set up for it

Do I really understand what is involved in trading EP

If I am going to use STIB everyday am I organised for it.

Is there a set routine for it

Is my broker/software set up for it

Do I really understand what is involved in trading it.

Like this I have series of conditioning prompts and scripts . There are conditioning paragraphs that I have developed for myself based on issues faced in trading. 

Another example of thought conditioning is about keeping drawdowns small. I shared an example of that on members site:

Thought Conditioning: Drawdowns

Every day think of this table.

What can you do to keep your drawdowns below 5%.

What stops you from cutting losses quickly?

Why is this table important?

Why should you look at this table 10 times in a day?

How can you develop a conditioning script to constantly remind you of this.

Advertisers constantly use thought conditioning questions or prompts to help you act on their message.

You are constantly bombarded with a conditioning message:

Ask your doctor about ED today.....

and as result billions of men go to their doctor and ask for the blue pill.

That is thought conditioning at work....

There are many ways to use though conditioning to align your behavior with your trading goals and I will be covering more of this topic in later posts. 

Related post:

How to use conditioning to improve your trading (Part1)

Bullish Setups For January 25, 2011

BDX- Becton Dickinson &Co.

BIDU: Baidu 

EW: Edwards Life Sciences

IO: Ion Geophysical Corp

MTB: M&T Bank

PBI: Pitney Bowes Inc.

WYNN: Wynn Resorts Ltd.

AER : a good swing setup

Stocks move in momentum bursts. A high volume breakout like this can be start of a 10 to 20% momentum burst.

Seven short ideas

Seven short ideas:

BAX,Baxter International Inc
CYN,City National Corp
GOOG,Google
MA,MasterCard Inc
SLB,Schlumberger Ltd
VFC,Vf Corp
WRC,Warnaco Group Inc (the)

Conceptual understanding will help you build enduring edge.....

Everyday same thing happens in the trading world. Someone talks of a tactics or a scan or a trade and then every one runs after it. Many have been doing this for years and still struggling in their trading. The reason for that is very simple. Low conceptual understanding.

Concept comes first then strategy then tactics.

If you are serious about your trading there are some concepts you must know in significant details. Once you understand those key concepts you will stop chasing tactics and will find greater success.

Deep understanding of concepts will help you build a strong foundation on which you can build a trading system. There are seven concepts you should study:

Momentum : If you understand this you will understand trends and mean reversion. You will understand why and how momentum works in the market. Most indicators are momentum based. Trend following and buying strength also works, so does mean reversion. They are all part of the momentum phenomenon. Once you understand momentum you can design hundreds of ways to trade momentum. Billions of dollars are traded and invested using momentum. Momentum is one of the core strategies used by every single quant fund.

Market Breadth: Stock markets are composite markets. The overall move in market is an aggregate of moves of several hundred or several thousand stocks. So the level of participation in a move is important. Market breadth deals with the participation of moves in any market or sector. Market breadth is the basic concept used by every big institutional player to build trading strategies and determine market direction. Once you understand market breadth you will find 500 tactics to make market breadth work. Market Monitor is one of the ways to do that. And there are several ways to do it.

Equity Selection: Because the overall market is a composite of many individual moves, it becomes critical to select right kind of stocks from the universe of 8000 stocks. Hence equity selection is extremely critical. You should know various ways in which one can select equities. Your returns are a function of your equity selection method. If you are trying to make big returns then equity selection is key. You need a equity selection strategy before you can move to next level of trading decision. Most novice traders have no understanding of equity selection concept.

Market Anomalies: Market anomalies are the proven structural phenomenons in the market. If you base your trading on a proven and statistically significant anomaly, you will be profitable. Absent that no amount of indicators will help you. A through understanding of anomalies will give you an edge.In last 40 to 50 years there has been significant understanding of the market in terms of what works and what does not work. Every single thing which you can think of has been tested. If you know what works then you would spend time on it rather than chasing tactics. Most retail and novice traders have no understanding of what works and why. So they are gullible to any tactical claims.

Market Microstructure: Market Microstructure is a branch of finance concerned with the details of how exchange occurs in markets. Understanding this will tell you how the market operates. The concept of market microstructre is very critical if you are trading very small time frames or are a day trader. Because to be successful on those time frame you need to find exploitable anomalies in market microstructure. You need to understand role played by market makers, automated programs, arbitragers, large fund buyers and so on. Their tactics and behaviour creates certain patterns.Quant funds exploit such patterns daily.

Growth investing : Growth investors buy stocks of companies growing faster than the average company in the market. Growth investing is a well established field of study and practice in the market. There has been thorough research on what growth factors work, why they work and under what conditions they work. Many well known traders are growth investors or growth stock traders.


Value investing : Value investors buy stocks of companies which are cheap or out of favor. Valuation has again been extensively studied and there is lot of analysis to tel you what exactly to look for in value stocks. Big funds and hedge funds and institutions are primarily valuation driven. It allows them to put large sums of money to work.


These are the core concepts around which all trading strategies revolve.
Once you understand these core concepts then your next line of study is about trading tactics. Tactics are methods to implement some of these core concepts. Here again certain trading strategies have emerged over the decades like position trading, swing trading, hedging, arbitrage and so on. Knowledge of these concepts will help you understand how and why these strategies work.

Unfortunately most traders start at tactical end. Many blow up their account before they even can understand core concept. Many of you are going to do exactly the same thing.

If you want to become a surgeon would you start your study with what scalpel to use or with anatomy and physiology. If your understanding of core concepts is weak or non existent no amount of scans or software's or indicators or trading psychology or multiple monitors or trading chat rooms or advisory services will help you become a successful trader.

So next time someone talks about a tactics, scan, or a software, or a trade, instead of immediately jumping on it and deciding to learn it, relax, sit back, think. First ask yourself what is the core concept behind this. Is it based on data. Is it logical. Is it really a new new way of  doing things or same wine in different bottle.

Conceptual understanding will help you build enduring edge.....

MLM may be good short setup

How to use conditioning to improve your trading (Part1)

Most traders know what they need to do but have tough time actually doing it. Traders know they should cut losses faster and let winners run. Traders know the importance of having a method with edge. Traders know the importance of stops. Traders know the importance of right position sizing and risk management. Traders know they need to be disciplined and focused. Most traders know what they should do but many have trouble getting themselves to do it.


Between intention and reality there is a big gap.


Every now and then faced with losses or failures traders decide to focus on some of these "should do" tasks and jobs , but many just can't seem to maintain the momentum to see it through. For many such problem continues months after months. Every few days or every few week they resolve to be more focused and disciplined traders and yet after few days they revert to their old ways. This cycle leads to loss of confidence. and at some stage this marks the end of their trading career or leads to disillusion.


How can you overcome such problem.


Psychologist have studied this problem and have a solution for this. The solution for this is conditioning. Behavior change requires conditioning. Conditioning is a process by which behavior can be modified by associating a stimuli or by learning a new behavior. Conditioning allows you to self correct your behavior. If you understand how conditioning works and how it can be used to change behavior, you can change your behavior.


Before getting in to trading I spent around 11 years in marketing and advertising field. You can not be a good advertiser or a marketer unless you understand conditioning. A good marketer understands how to condition people to buy his or her products. Marketers condition people to buy their products daily, weekly , or monthly through deep understanding of consumer behavior. That is why many of you like a Pavlov's dog run to a Dunkin Donuts or Starbucks early in the morning. Marketers have skillfully associated beer and snacks consumption with sports watching and so like Pavlov's dog you reach for a beer when watching football.




Marketers use conditioning to shape your buying and product consumption behavior. Billions of dollar worth of advertising is designed to condition your behavior. A store layout is designed to condition you to buy high margin things. Every day you are exposed to hundreds of messages designed to condition you to buy or use a product or services. As a former marketing person everyday I see dozens of examples of conditioning at work.




Religions are also based on conditioning. Like marketers religious leaders skillfully use conditioning to ensure followers think and behave in certain manner. As a result followers of a religion exhibit certain kind of behavior with great discipline. Religious rituals and practices are designed on deep understanding of conditioning. Certain religions promise rewards in afterlife while some offer immediate good or bad judgement on your behavior. Any message that starts with "thou shalt" is a conditioning message.


Animal trainers use conditioning to train them. If you look at methods used by horse or dog or dolphin trainers, they are based on deep understanding of conditioning theory. The dolphin gets fish for performing the trick. The drug hunting dogs are trained using conditioning to find hidden drugs.


Parents use conditioning to shape kids behavior. Desired behavior is rewarded with encouragement or reward and undesired behavior results in punishment or timeouts. Parents who understand conditioning raise well behaved kids. Teachers use conditioning to maintain discipline and build good behavior. My daughter's teacher uses green, yellow, red and, purple cards to condition kids. For good behavior kids get green card for bad behavior red card.


Conditioning is used by couples also. If you are nice to your partner you get rewarded and if you are nasty you get ignored. A gift of 5 carat diamond might get you a reward of several nights of good sex. That is conditioning at work.


Same conditioning understanding can be used to modify your own trading behavior and improve your discipline.




There are different types of conditioning you can use. You can use thought conditioning or you can use behavioral conditioning. Thought conditioning is focused on controlling what you think. The underlying premise is that if you change your thoughts then your behavior will change. In behavior conditioning the focus is on changing behavior and not focus so much on thoughts. If you change your behavior you will achieve your desired objective.

Eight setups long and short

31 Stocks likely to breakout

AIR,Aar Corp
ASGN,On Assignment Inc
BID,Sotheby's Holding Cl A
BSFT,BroadSoft Inc
CCK,Crown Holdings Inc
CTXS,Citrix Systems Inc
DECK,Deckers Outdoor Corp
FTI,Fmc Technologies
GCI,Gannett Co Inc
HAL,Halliburton Co
HBAN,Huntington Bancshares
IMAX,Imax Corp
IO,Ion Geophysical Corp
IR,Ingersoll-rand Ltd Cl A
IRM,Iron Mountain Inc
JCI,Johnson Controls Inc
KEM,KEMET Corp
KOG,Kodiak Oil & Gas Corp
LSI,LSI Corporation
LULU,Lululemon Athletica Inc.
MGA,Magna Internat Inc
MGAM,Multimedia Games Inc
MOTR,Motricity Inc
MTB,M&T Bank Corp
NIHD,NII Holdings Inc
NTRS,Northern Trust Corp
ORCL,Oracle Corporation
PLL,Pall Corp
SHZ,China Shen Zhou Mining & Resources` Inc
SNDK,Sandisk Corp
SRI,Stoneridge Inc

I have been highlighting some of these kind of setups on Chartly for those interested.

http://chart.ly/users/stockbee

What I look for in a breakout setup

What I look for in a breakout

Perfect setup.

Was anticipating a b/o in CAT and got in right at start of b/o move. 

I have been highlighting some of these kind of setups on Chartly for those interested.

http://chart.ly/users/stockbee

CAT, IR , and ORCL three stocks to watch

watching for possible b/o. CAT already in since open.

Think Complete Trade

Think complete trade (Reproduced from members site)

Get in to the habit of thinking through complete trade. If you buy this what is your stop. What is your target. What is your risk reward. How much should you risk. When will you know it is failed trade.

Anyone can enter a trade but thinking through full trade before entry is critical.

And it is one of the reason you should not chase tips. Because you don't know how to handle that trade after entry.

How to enhance self efficacy beliefs

Yesterday I reproduced a post which I wrote on members blog about self efficacy

Everyday work on your self efficacy beliefs...

Some of you have asked how can one do that. Self efficacy is very different from self confidence and many of the things emphasized in pop psychology books or self help book. Self efficacy is a behavioral school of thought in psychology that tries to explain our learning  and motivation.

This old post of mine explains how to build self efficacy. 

How can you enhance perceived self efficacy
Self efficacy is built through four processes:

1. Mastery experience
2. Role modelling
3. verbal persuasion
4. psychological cues.

These four are in order of importance. Most critical way to build self efficacy is through a mastery experience.

Mastery experience is basically a successful experience of mastering a task. Mastery experiences happen when the learner has reached the point where they understand the content knowledge enough to perform a task on their own or masters the task. It happens if the learner goes in to sufficient depth on material he  is trying to learn. It happens as a result of immersion in a particular field or task. It happens with plenty of prior exposure to the content. At some stage the learners are able to interpret the results of their actions and use those results to develop their own capability to engage in future actions or tasks. Then the learner become auto learners. They are able to participate in tasks on a first hand basis with little or no assistance from outside influences. When you experience a intense mastery experience you get a feedback on your own capabilities. Long and sustained efforts are required for mastery experience.

Self efficacy beliefs are critical not only in academic situation but in any task like sports. Self efficacy beliefs are task specific. So a person might have high perceived self efficacy beliefs in one subject but have less self efficacy in other field.

Self efficacy builds over a period of time and more mastery experience you have, you become better at a task and learning other tasks. 

Mastery experience is the main source of self efficacy. All other things are secondary. In training or coaching situation one can structure the situation in such a way that the trainee experiences a mastery experience. This is the fundamental principle used in training commandos and marines. In simulated and controlled situation they are put in situations where intense learning happens in a very short period of time. That creates a mastery experience. That forever enhances the trainees perceived self efficacy belief. Some years ago Discovery Channel had a 6 part series called Navy Seals Buds Class 234 , if you watch that , it is excellent example of creating mastery experience in a simulated environment. If you work for a successful start up at early stage, you will have a mastery experience. That is why you will find many successful entrepreneurs become serial entrepreneurs. 

Many people go through a lifetime without having a intense mastery experience in any field  and so have low self efficacy belief.  

Vicarious experience or role modelling is the second source of self efficacy. It is when the learner is primarily gaining self- efficacy or confidence in a given task through observation of a role model attaining success at a task The learner does not play an active role in such learning experience. They are learning more through the watching of someone who already understands the task or the objective or is on the same skill level as the observer.


The social persuasion or the verbal persuasion as it is also called is basically  the exposure to the verbal and nonverbal judgments that others provide that can impact the level of self efficacy that a student has.


Physiological cues is the next source of self efficacy beliefs. We judge our own  degree of confidence by the emotional state we experience as we contemplate or engage in an action. So our physiological states affect our  self efficacy beliefs. But such states tend to be temporary. 

Focus on setups

Setup is a specific pattern or set of conditions a stock must fulfill to be considered for entry or exit.

There are few basic setups like breakout, pullback,events, exhaustion, or price pivots. Everyone trades a variation of them. Each one gives it his own name.

Some setups like buying breakout are reactive setup while buying pullback are anticipatory setup.

If I have to give one advice to a new trader, it would be to hunt for a setup. All successful traders trade a setup or a bunch of setups. They have skill specific to their setup. Successful traders have vast expertise on trading a very niche setup. That setup works for them or they have worked to make that setup work for them.

The problem for beginner trader is that as a beginner you will not understand the importance of a setup. Because there is no manual or book which tells you that the key to trading is to find setup.

Psychologist who have studied expertise know that any expertise is task specific. So defining a specific task to become an expert at is very critical.

The first step in becoming a good trader is to arrive at a tradable setup. And then become an expert in trading that particular setup. It is a very microscopic skill.

What is involved in developing a setup is you start with broad concept or start with setup that has worked for someone else and then make it work for you. For that you have to go through a versioning process. You refine and refine a setup till it works. This is a iterative process.

For example I trade a very simple breakout setups. Those setup have evolved over a period of years. Starting with a setup idea I picked up in The Hedge Fund Edge by Mark Boucher, I refined and refined the idea till it evolved in to current setups.

Currently I am working on a anticipatory setup where I am trying to guess a b/o point and enter before a b/o.

Once you select a setup build expertise in it by studying historical examples of it.Think about it a lot. Try and articulate why it works. What is the market structure that supports that setup idea.

The task for novice trader is to go from their current stage to a level where they have a setup which works for them and suits them perfectly. You will have immense confidence once you reach that destination. Once you can make a setup work, then it is easier to make other setups work or develop other setups.

I constantly look for setups and study other peoples setups. You will see most successful traders do the same.

Whenever I visit a blog or people send me request for linking I always look at what is this persons setup. If I find a good setup I study it. I may not use it, but it gives you ideas. So if you are a trader looking to progress your trading further think setup.

Once you have a setup your problem of cognitive load will decrease because you will be doing a very narrowly focused task. Once you find your own setup you will be able to shut out environmental noise.

Key decision

Key decision you need to make is what time frame you are going to trade on. Decide if you want to be a day trader, swing trader with 3 to 5 day hold, swing trader with 10 to 20 day hold or position trader or buy and hold kind.

This is a key decision. Everything else will flow from it. Your setup is time frame specific. Your tools are time frame specific. Your entry and exit strategies are time frame specific. Your process flow is time frame specific.

Don't flirt from time frame to time frame.

Unless you are genius each time frame involves 6 month to few years learning curve. Plus during that period you may lose money.

Temptations are there every day. Decide your time frame first. It is key decision.

Everyday work on your self efficacy beliefs...

(Reproduced from members site)

The most important determinant of your success in trading or in your personal life is your self efficacy beliefs.

The most important determinant of your trading success will be your self efficacy beliefs. Once that is in place your self talk will change to "hey I can do this", "hey I don't have all the answers but I am confident of finding the answers", "hey I know how to bounce back from setbacks" .

Self efficacy beliefs are task specific. So your personality is determined by hundreds of self efficacy beliefs you built throughout your life. The process of developing self efficacy beliefs is at peak when you are a child and a pre adult. For many of us in our adult life we stop actively growing (except for our weight -:) . We operate at a certain level of self efficacy beliefs and get stuck in a orbit. Unless events or life events, or opportunities force us to examine our belief we become very comfortable with them

When people attempt trading some find early success and some find early setbacks. That experience sets your self efficacy beliefs. Some people give up believing markets are too difficult or manipulated or beyond my understanding . Their self efficacy beliefs dictate their behavior.

Once your self efficacy beliefs specific to trading change you will start experiencing success. That does not mean you will not have setbacks. If you have high self efficacy you will find a method. If you don't have it, even the most profitable method will not work for you and you will keep finding faults with methods.

Self efficacy beliefs is the biggest determinant of your trading success. This is true of life as well. Your self efficacy beliefs determine your success in any domain. Unless you work on self efficacy you will find many inhibitors and will be constantly dissatisfied with any method, guides, videos, or instructions, or site. You will constantly chase new methods, new scans, new claims, new gurus, new newsletters, and so on.

The self efficacy beliefs theory is not some tin foil hat theory I coined or invented. Albert Bandura first wrote about self efficacy in 1977. His research on self efficacy is considered most influential in developing social learning theories. His work revolutionized our understanding of human behavior, destiny, character, personality, and so on. He is considered the greatest living psychologist.

Anyone who has taken a course in educational psychology or worked in training industry or in human resource field would be very familiar with Albert Bandura's work.

He defines perceived self-efficacy as people's beliefs about their capabilities to produce designated levels of performance that exercise influence over events that affect their lives.

Self-efficacy beliefs determine how people feel, think, motivate themselves and behave.

He postulates that self efficacy beliefs determine whether or not a certain behavior or performance will be attempted, the amount of effort an individual will contribute to the behavior and how long the behavior will be sustained when obstacles are encountered.

Every immigrant who came to this country for last hundreds of years had high self efficacy beliefs. People with high self efficacy beliefs left their poor and difficult circumstances to come to this country to find better life. All that they had when they came to this country was high self efficacy beliefs and few dollars. They had the confidence that somehow they will build a better life in the New World.

If you go to Ellis Island you will see the stories of people with high self efficacy beliefs who left poverty, famines, religious persecution, imperial regimes, and came to this country. There is an half an hour documentary they show and if you see it , it is a very emotional story of people with high self efficacy beliefs leaving their country, families, friends behind to come to this country and build a new life and new future for themselves and their next generation.

Same way self efficacy becomes very critical in learning complex skills like trading and if you want enduring edge and success.

Psychologist have found that self-efficacy beliefs help determine how much effort people will expend on an activity, how long they will persevere when confronting obstacles, and how resilient they will be in the face of adverse situations. The higher the sense of efficacy, the greater the effort, persistence, and resilience.

Profitable trading involves all these challenges. You need to put in lot of effort to understand and internalize key concepts like equity selection, entries, exits, risk, risk/reward and then put it all together. In the process you will have several setbacks and false starts. If you have enhanced self efficacy beliefs you will persist in face of such adversities. If you have high sense of self efficacy beliefs then you will spend time mastering trading software, and mastering trading setups and make them work. Absent that you will abandon your effort at first hint of failure.

Learning to trade is not an easy task. It is one of the most challenging task you would handle in your life. Some are lucky and they find success instantly. For rest it is a big battle.

People with a strong sense of self efficacy beliefs approach difficult tasks as challenges to be mastered rather than as threats to be avoided. They have greater intrinsic motivation. That helps them to engage for long periods in activities and helps them overcome repeated obstacles. They do not have discipline problem. You will see this in all people who achieve something beyond ordinary in their life. They are driven people. They have a high tolerance for failure. They don't have all the answers but they know somehow they will find the answers.

Sometime back I was reading a study on entrepreneurs and it says most of the fortune 500 businesses were started by people with less than 10000 dollar. What they had was high self efficacy belief.

Same is true of most successfulness traders. They started with small stake and through trial and error and persistence figured it out and then made great fortunes.

People with high self efficacy beliefs set themselves challenging goals and maintain strong commitment to them, and heighten and sustain their efforts in the face of failure. People with high self efficacy beliefs quickly recover their sense of efficacy after failures or setbacks, and attribute failure to insufficient effort or deficient knowledge and skills that are acquirable rather than external circumstances.

Your self-efficacy beliefs also influence your thought patterns and emotional reactions. This is critical in trading. You should not be overly excited by profit on single trade and same way not get depressed by loss on single trade. At the end of the day trading is probability game. High self-efficacy helps create feelings of serenity in approaching difficult tasks and activities and activities where outcome is uncertain.

If you have low self-efficacy beliefs then often you believe that things are tougher than they really are. As a result this belief that fosters anxiety, stress, depression, loss of discipline, over trading and a feeling of being lost. You are unable to solve your own trading problem.

Psychologists believe that self-efficacy beliefs influence the level of accomplishment that one ultimately achieves.Self-beliefs can also create the type of self-fulfilling prophecy in which one accomplishes what one believes one can accomplish. This further enhances self efficacy beliefs. This leads to higher performance this in turn leads to higher effort and higher accomplishment which in turn further enhances self efficacy.

The goal of this site is to constantly challenge you to enhance your self efficacy beliefs. To constantly goad you to keep working on your self efficacy beliefs. To challenge your existing beliefs. To provoke you to examine your current beliefs. To offer you a template for enhancing your self efficacy beliefs.

If you do that then you will achieve your trading goals. And you will not need this site, or alerts, or alerts with sound effect.

Everyday think of how you can enhance your trading related self efficacy beliefs.