A close shave. Recently, I found myself working day and night on fine-tuning an exit strategy for one of my day trading systems. Delving into statistical probabilities and portfolio theory can quickly turn into a quagmire of data, models, and losses. One can be tempted to add more and more criteria, rules, and layers to achieve a high probability trading system.This is know in the industry as "curve fitting".  C urve-fitting refers to the process of creating a model that closely fits a specific set of historical data. This can lead to models that perform well on past data but poorly on new, unseen/ future data due to over-fitting. Traders may be misled by profitable back tested results if a model has been curve-fitted. The model may show impressive returns and low risk in back-tests, but these results cannot be replicated in live trading. This is a common mistake that traders make and can be extremely frustrating when a trader curve fits a strategy that produces...

  “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” - Thomas Edison   Some trading coaches say that we need to eradicate our weaknesses to reach our potential, others inspire us to play to our strengths. So which is it? There are a number for advantages to each approach. Focusing on Strengths Maximizes Potential : By focusing on strengths, individuals can leverage their natural talents and excel in areas where they already have an advantage. Boosts Confidence : Success in areas of strength can build confidence and motivation, leading to further achievements. Efficiency : Time and effort spent on developing strengths often yield better and faster results compared to improving weaknesses. Specialization : In many fields, being exceptionally good in a particular area can be more beneficial than being average across several areas. Overcoming Weaknesses Balanced Skill Set : Addressing weaknesses can lead to a more w...

  A number of years ago I read a short trading book. Its a very basic book, covering a rather basic stock trading system. It was developed by a guy who was not a hedge fund manager, broker or Wall Street insider, yet it had a profound impact on my trading and beliefs about markets. You can purchase the book here for only a dollar or two: How I Made $2,000,000 in the Stock Market The basic premise is that stocks trade in a range and should only be bought when they break the range or what has become know from the book- a Darvas box. Read more about trading the Darvas box here:  Darvas Box theory NVIDIA soared to another new high yesterday and has been exceeding analyst expectations all year. For more context, read this article: NVDA news article 05/06/2024 Looking at the historical daily chart of NVDA, it may have been a classic Darvas box/ break-out trade. This is text book example of a long term upside break out.   As can be seen from this c...

Life is unfair but are the markets unfair? Some disgruntled traders believe that the markets are rigged in favour of the institutions. That retail traders can never get an edge. Some believe brokers are out there to flush our stop losses and that they take the other side of our trades and then manipulate the position against us. Is this fair? Does this really happen? Do retail and private traders even stand a chance? The starting point is examining your beliefs. The late Dr. van Tharp always used to say that we don't trade the market, we trade our beliefs about the market. If you believe markets are rigged and there is nothing you can do, you are diminishing your edge. You need to examine your beliefs and decide if they are useful for your trading, or detrimental. I wrote an article on beliefs recently. Click here to read it. I highly recommend assessing your beliefs about markets. Reading the above article will help you. I recently looked at a chart of the EUR/GBP. I could clearly...

  Everywhere you go, somebody is trying to sell you a shortcut to trading riches. Buy my fail-proof eBook, download my winning trading robot, follow my five steps to success, buy my money-back guaranteed course! Follow my trade signals! Financial advice is abundant but a proven track record of trading success is rare.   I challenge you to ask anyone selling something related to trading what their audited results are. Before I come down on the entire trading industry, I admit that there is some decent content out there. You just need to wade through the quagmire of slick sales pitches and get-rich-quick schemes. I encourage you to curate the content yourself. It’s so easy to go down a rabbit hole of free online resources that before long, you can get entirely caught up and start to question your motives and original ideas. This constant need for more information to justify your beliefs or lack of courage leads to indecision and further delays your dreams and aspirat...

There is an abundance of information available for traders. Books, websites, YouTube videos, TikToks, and Instagram posts flaunting Lamborghini's—all of which predominantly focus on making money and advocating for the best trading systems. Some even showcase the luxuries that trading success can afford you. However, all this wealth of information is rendered meaningless without three essential components. In my previous post, I emphasized the necessity of attaining a higher level of consciousness in your trading endeavors before achieving consistent profitability. Read it here In this post, I aim to build upon that foundation by discussing three crucial aspects you must master to reach your "awakening":   Discipline Discipline is the cornerstone of trading success. Without it, reaching the pinnacle of trading proficiency remains an elusive goal. Adhering to your trading system demands discipline, as even a single impulsive trade can jeopardize all your progress. Incorpora...

    I think, when it comes to improved trading performance, we are all aware of how important the right mindset is. However, sometimes we are so stressed about a losing streak, or missing a trade, that we forget and slip into a weak mindset over time. Maybe this will help get you back on track.  When it comes to mindset, there are three steps required to reach self-mastery and success in the markets One.“Things happen to me”. This is the victim mindset, the lowest level of self-mastery, and usually coincides with a negative attitude or even depression. The belief that you are the victim of your circumstances. Do you ever think that the market specifically targets your stops. Or do you believe that every time you go long the market drops. This fatalist outlook is self defeating and wrong. The market doesn't care about your positions. Your beliefs that bad things happen to you or that you are an unlucky person is hurting your trading. Drop the victim mentality. Two....

    Sometimes, even after meticulously planning and executing a trading strategy with precision, things still don't go as planned. Dealing with this can be frustrating and costly, but how you handle it can be crucial in determining the survival of your trading account. Often, we become entrenched in a particular way of doing things without pausing to analyze whether it's effective or if there might be a better approach. I've witnessed salespeople using the same pitch repeatedly, regardless of its success rate. Instead of adapting, they blame external factors like the economy, the product, or the prospect. Similarly, traders sometimes cling to a failing strategy rather than adjusting to evolving market conditions and developing a new approach. Finding the balance between abandoning a tactic at the first sign of difficulty and persisting with a failing strategy for too long is essential. If you quit your trading strategy every time you lose on a trade and jump to ...

   When you trade, you need to focus. An unfocused trader misses trading set-ups and also takes trades that should never be traded. Have you ever taken a trade and then later reviewed the trade only to say to yourself: "Why did I even take that trade?!" That is an unfocused trade. Another sign that you are not focused is when you are reviewing your trading day and see a classic set-up and wonder why you never took the trade. Its because you were not focused.  I’m trying to take my trading focus a step further to what I call “Deep Focus”. Recently I’ve been thinking a lot about focus. In my own trading and analysis work, I’ve found interruptions to deep focus have led to poor trading outcomes. A state of deep focus is where you need to be, when you are doing what you do best. Most of the time we are in a sort of shallow focus while we are working. We are getting the job done, but are constantly distracted. This is a state of constantly moving away from your work to c...

  As traders, we can get overwhelmed easily. Technicals vs fundamentals, quants, seasonality, volume profile and anchored VWAP. Dollar cost averaging, scaling out, hitting the bid and lifting the offer. Event driven or systematic? All you need to focus on is your next trade. Make one great trade and then focus on your next great trade. Take it one trade at a time and you'll get better and better. Here are four things you can do now to get better at trading. 1. Be Intentional Successful people direct their attention better. They focus on the things that matter the most right now. Distractions are all around us. Getting more intentional about the important stuff will lead to success. For example, Michael Phelps credits his ability to concentrate and block out distractions as a key factor that helped him break world records. Spend more time working on your trading. Review all your trades after the close. Learn from your mistakes and your successes. Focus more when you are trading...

    What is the meaning of life? The origins of this often times rhetorical question are unknown. I believe that humans have been grappling with this conundrum for centuries or more. Why are we so obsessed with uncovering “the meaning of life”? Perhaps it is what differentiates our species? Maybe it is the source of true happiness? Although, it could be altogether meaningless. Some believe that the meaning of life is subjective, and each individual must find their own purpose or meaning. To me, this is a little open-ended. Regardless of whether you believe this is a subjective issue or an objective construct, its a question many of us have pondered a lot. What if the meaning of life is one word? It is something that ensures life has meaning and substance regardless of your circumstances. In fact, most of us are born for it. Responsibility. By adding more responsibility to your life, you’ll add more meaning. If you faced all that you needed to face, who would you ...

 Welcome to YOUR NEXT GREAT TRADE.   I developed the concept of One GREAT Performance to help professionals focus on their performance and avoid distractions. As a veteran trader with twenty years of experience and a proven track record, I know how important it is to focus on your next great trade, then your next great trade, and so on. YOUR NEXT GREAT TRADE blog is where I provide longer form posts specifically designed to enlighten traders and get you to your trading goals. Here we focus on YOUR NEXT GREAT trade. For a weekly short email packed with usable and practical advice and ideas on improving performance, please subscribe to my newsletter. It comes out every week. Consistency breeds success.  My weekly email will give your week a boost and help you reach your best. Go to: https://justinrentzke.substack.com / to subscribe. Follow me on X to stay in touch, I notify followers of each new blog post on X. https://x.com/JustinRentzke Trade well, Justin P.S. If you want...