Question

Hi Anna, First off, great book! I’ve been an aspiring trader (mostly futures, some commodities (oil, gold, NG), some stocks, dabbled in Forex) the last 7-8 years. 17 or so if you take “equities” in general into account. I’m going to guess I’m roughly break even over those 7-8 years in my active ‘learning/trading’ account (as opposed to my longer term ‘investing’ account. Maybe very slightly up. Most of this is because I suffer from not following a plan and from aversion to loss. That aversion to loss does things like make me take a $4 gain in TSLA from $35 to $39 on my 1000 shares when I plainly bought it as a long term hold…today it’s @ $200. Sigh. I’m good at avoiding loss, but not good at holding. Historically I’m usually pretty good on entry, but really really bad on exit. I’ve always subscribed to “price action + volume” being the only true way to understand the markets, not gobs of indicators and other such nonsense. Your Volume Price Analysis book was one of the first trading books I’ve read (and I’ve read a LOT) that really struck a chord with me. Anyways, on to what I wanted to ask. Do you do any online seminars or mentoring? Learning from a book is all good however talking to someone, getting feedback, mentoring, etc is a whole different level. I unfortunately cannot do this full time right now as I have too lucrative and enjoyable of a career to walk away from, but at some point in my life I’d certainly like to enable my dream of trading for a living. Finding a suitable mentor and/or teacher who embraces the ways I want to trade (VPA, VAP) is important and you are the first person who I’ve really seen be genuine and informative about this. If not, completely understandable, you seem like you have a full plate already 🙂 Do you have any suggestions as to other people I could talk to and/or any other books you could suggest reading? Thoughts? Thanks so much

Answer

Hi – thank you so much for your email and very kind words. They are very much appreciated. Thank you also for taking the time to write to me about your experiences as a trader/investor, and for your honesty. Simply being able to recognize your own weaknesses is a very important first step to becoming successful in this business. Not being able to stay with a trade or trend is probably the most difficult aspect of trading to master, and the fear of missing out on a profit can literally overwhelm us.

The reason for this fear is understandable & rooted in our evolution. For example, would our early hunter gathers ancestors have passed on taking an easy rabbit if they thought a bison could be around the corner? I think not, because life then was deeply uncertain, short and brutal. Fast forward to today & we replay the same scenario as traders. Simply substitute rabbit for TSLA (or any other stock, market or instrument) and our brain (the limbic part) triggers exactly the same response. It does not recognize we no longer need to roam the plains in search of food, it is simply firing our innate survival mechanism if it sees a profitable position melting away.

This response is so powerful it can overwhelms the rational/logical part of the brain. What is interesting is that to succeed pit traders have to use the limbic system in order to succeed – lots of adrenaline and noise. They need to smell the fear and greed of the market. A good example of this is another trader friend of mine, Rich Friesen who spent many years as a pit trader himself before becoming a psychologist and developing his own unique course to help traders overcome the emotional problems we all face as traders. He gives a unique insight into these emotions and teaches you how to manage, control and overcome these obstacles when they appear. You can find more details here at Mind Muscles Academy or on my site at Trading Psychology

But – we are not pit traders. So how to deal with this, which is one of the hardest aspects. The first general point is that intra day trading/scalping increases this pressure dramatically – so zooming out from the market will help. Second, use multiple time frames to provide perspective (both upstream and downstream). Third, ensure that your stop loss management gets you into riskless trades as quickly as possible, which will then give you a ‘worse case’ scenario, and help you to stop worrying about the loss which, in turn, will force you to focus on managing the position.

With regard to online seminars, mentoring etc. David (my husband) & I have posted (and will continue to do so) videos on you tube : www.youtube.com/acoull – these are recordings of our various webinars and they expand & explain further the VPA method. The next stage is more books. The first is one about binary options which will be followed by a major stock trading & investing book. Once these have been published we will be looking at producing more structured courses and/or students. In the meantime I would suggest reading the Richard Ney books. They are out of print but still available from Amazon & my fellow VPA trader & investor, Ron Brown produces a great newsletter. His details are : http://www.highgrowthstock.com/ I hope the above helps and may I wish you every success in your future trading (& investing) journey – best wishes Anna