As of 12/20/2024
  Indus: 42,840 +498.02 +1.2%  
  Trans: 15,892 +32.54 +0.2%  
  Utils: 986 +14.76 +1.5%  
  Nasdaq: 19,573 +199.83 +1.0%  
  S&P 500: 5,931 +63.77 +1.1%  
YTD
 +13.7%  
0.0%  
 +11.9%  
 +30.4%  
 +24.3%  
  Targets    Overview: 12/12/2024  
  Up arrow44,200 or 41,750 by 01/01/2025
  Down arrow16,100 or 17,700 by 01/01/2025
  Up arrow1,050 or 975 by 01/01/2025
  Up arrow20,500 or 19,300 by 01/01/2025
  Up arrow6,100 or 5,775 by 01/01/2025
As of 12/20/2024
  Indus: 42,840 +498.02 +1.2%  
  Trans: 15,892 +32.54 +0.2%  
  Utils: 986 +14.76 +1.5%  
  Nasdaq: 19,573 +199.83 +1.0%  
  S&P 500: 5,931 +63.77 +1.1%  
YTD
 +13.7%  
0.0%  
 +11.9%  
 +30.4%  
 +24.3%  
  Targets    Overview: 12/12/2024  
  Up arrow44,200 or 41,750 by 01/01/2025
  Down arrow16,100 or 17,700 by 01/01/2025
  Up arrow1,050 or 975 by 01/01/2025
  Up arrow20,500 or 19,300 by 01/01/2025
  Up arrow6,100 or 5,775 by 01/01/2025

Bulkowski on The Centered Trader

Are You a Centered Trader?

Are you a centered trader, one that lets emotions flow by without reacting, focused only on the trade? Let’s find out by taking this quiz.

  1. Do you feel your trading lacks discipline (do you consistently follow your rules)?
  2. Have you developed a reluctance to trade the market, perhaps because of recent losses?
  3. Do you set specific goals for each trade which you fail to meet?
  4. Does the fear of loss sway your trading decisions in any way?
  5. Have you increased your position size to recoup money from a failed trade?
  6. Are you overly eager to make a trade, perhaps because of a big win, because you need the money, or for the adrenaline boost?
  7. Do distractions interfere with your trading?
  8. Do you look for excuses or try to rationalize a failed trade?

Count the number of "No" answers and "Yes" answers.

Answering "No" to all of these questions means you should check yourself for a pulse. You may be dead. Look for a defibrillator.smile

Answering "Yes" to all of these questions means you are really screwed up, and this article is for you.

If you answered "Yes" to some, but not all, of the questions, then that means you are a member of the human race. Congratulation! However, you still have issues. Let's deal with those now.

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What is a Centered Trader?"

A centered trader is someone who has learned to recognize and deal with the sequence of emotional events caused by stressful trades, losing trades, or even winning ones. Typical emotional responses by an uncentered trader are:

A centered trader focuses on the trade and lets thoughts about self-doubt or self-criticism pass without interaction. They have learned to turn down the volume on such thoughts and just watch the chart to see how the trade unfolds. They don’t ask, "Do you think I can make it as a trader? Can people really make a steady income doing this?" They understand that trading is a business and losses are the cost of doing business. A centered trader has learned to take emotions out of trading. How? Experience has taught them how to react calmly to every situation. Another word for experience is practice.

When Captain Sully lost thrust from both engines after a bird strike, his airplane turned into a rock with wings, but as a certified glider pilot (according one source that consulted FAA records), his training allowed him to pilot the craft to a safe landing on the Hudson river. Your trading should be as professional and as calm as Sully was when flying the Airbus.

How do you become a centered trader?

This article was based on an idea from Technical Analysis of Stocks & Commodities magazine, February 1995 issue by Ari Kiev, titled, "Centered Trading."

-- Thomas Bulkowski

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