The Trading Mindwheel

Foreword xiii Introduction xv Prelude xv The Start of Something Life Changing xv Philosophy of the Trading Mindwheel xxii The Axle Mindset: Beliefs, Belief Systems, Emotions, and Habits 1 Jesse Livermore’s Story 2 Mindset Is Everything 3 Taking Inventory of Our Beliefs 3 2 A.M. Wakeup Call 4 Deconstructing Beliefs and Belief Systems 6 Write Your Beliefs 9 Emotions and Emotionality 14 The Marathon 15 Healing Wounds 16 When White Knuckling Fails 18 Meditation Is a Marvelous Tool! 21 Seek Clarity 22 Equanimity 33 Spoke 1 Journaling: Step One of Accountability and Continuous Improvement 35 What to Journal About 37 Types of Journals 44 Trading Routines 46 Spoke 2 Analysis: Analyzing Trades and Markets 55 Three Things I Learned the Hard Way about Trading 56 Analyzing Trades and Analyzing Markets 69 Influences and Studies 72 Fundamental Analysis: Defining Our Universe 74 Defining Our Setups 86 Developing a Funnel 96 Analyzing Markets 96 Spoke 3 Risk: Initial Capital Risk, Position Sizing, Potential Reward 107 Risks Involved in Risk 109 Mindsets Needed for Risking Capital 115 Ways to Effectively Manage Risk 122 Spoke 4 Trade Management: Managing Risk throughout the Life of the Trade 137 Life Cycle of a Trade 139 Beginning of the Trade 140 Four Types of Exits 143 When to Sell in Stages vs. When to Sell It All 154 When to Add 159 Dealing with Earnings Announcements 163 Spoke 5 Portfolio Management: The BIG Picture and Assessing Our Total Risk 165 Assessing “Portfolio Heat” 166 Paul’s Story 168 Setting Up Circuit Breakers 170 Spoke 6 Post Analysis: Step Two of Continuous Improvement 173 What to Include in Post Analysis? How Long and How Often? 174 Getting Organized 176 Three Habits That Will Help You Improve 179 Discipline + Balance = Sustainable Success 182 Spoke 7 Testing: Factor Modeling, Back Testing, and Forward Testing 187 Factor Modeling 188 Back Testing 192 Forward Testing 193 Conclusion 197 Acknowledgments and Inspirations 199 About the Author 201 Index 203