YOU WILL NEVER BE A SUCCESSFUL TRADER
UNTIL YOU MASTER THIS ONE THING
DAYTRADESPY • COPYRIGHT 2021
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Whether you are new to trading or a
seasoned pro, you are obviously here
because something is not working as it
should. Perhaps you have tried other
programs but they are just not your style.
Maybe you enjoy some success but fail to
establish consistency in your trades.
POSSIBLY, YOU ARE
LOOKING FOR A LESS
COMPLEX STRATEGY
THAT TRULY WORKS.
Chances are, any failures in the market,
regardless of strategy, could be attributed
to one key condition:
EMOTIONAL CONTROL
In fact, no system will work until you
wrestle down this one key peril.
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GREETINGS, MY NAME IS
HUGH GROSSMAN.
I hold no licenses or accreditation behind my name that suggests I am a so-called expert
in this field. But what I do have is many years’ experience in trading options…
‘in the trenches’ experience, where I made a lot of money and I lost a lot of money. The
important thing is that when I lost money, I always reflected as to why it happened.
Eventually, by reviewing my trades, making fewer painful decisions and more of what
worked, I started experiencing modest but consistent results.
Upon seeing the benefits, people inspired me to show them what I was doing; hence the
start of DayTradeSPY. That was 2010. We have been teaching others how to day trade
SPY options ever since, including moderating the longest running trading room that I
know of.
Incidentally, when I did hand over my hard-earned money to those accredited experts
back in my early days, I ended up losing. Just proves, there are never any guarantees.
So who better to learn from?
Everything I teach, I learned the hard way. I enjoyed my share of successes and suffered
through many losses. All that said, my greatest pleasure comes from sharing my
experiences so hopefully, you will not have to bear the same scars.
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Emotional Control: the regulation of or attempt to manage our responses to outside
influences. The market giveth and the market taketh… how we deal with it determines
who wins and who loses. Except for perhaps the odd outlier trade, likely all my losses
were a result of a loss of emotional control. Sound familiar?
Interestingly enough, we develop and learn various skill sets all through school, but never
are we taught how to manage our emotions. In fact, if we react outside the patterns
established by society, they assign a name to our condition and give us a pill,
as if we are not allowed to express those emotions. In watching a movie recently with
my wife, the boy in the movie was deeply angered, hurt and visibly enraged. My wife
suggested he was crazy. I asked her what other response she would expect as his long-
time girlfriend just announced that she was having an affair on him. Even those close to
us try to govern our reactions, suggesting we’re crazy, yet the reaction is perfectly in line
with what could be expected. Can you imagine if schools actually taught how to regulate
our emotions?
Successful traders have mastered their cognitive responses to market conditions. They
understand and work with markets rather than against them. Recognizing that prices do
not move in straight lines, successful traders learn to ride the waves, taking gains while
accepting the occasional loss as all part of the process. Experienced traders are acutely
aware of their emotional status at all times, conditioned to manage their positions based
on sound trading principles.
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Emotions are like muscles. The more you flex them, the better they will perform.
FIRST, TO IDENTIFY THE GREMLINS, THEY ARE:
Fear
One of the most, if not the, significant emotion for traders. This condition can readily
demobilize you from applying your hard-earned technical skills. After anguishing from
losses, the trader may become paralyzed and unable to trade. I have consoled many
traders mired in fear after they blew up their accounts, many unable to get back in the
game. This protective emotion also manifests itself in other aspects of life. As traders,
fear is omnipresent but could be controlled.
Greed
One may give the shirt off his back to his fellow man in the real world, but come the stock
market, he will attempt to squeeze that last dollar until George Washington’s eyes pop
out. Greed is that compelling force that keeps you in the trade with opportunity cost, the
value left on the table that ‘could have’ been yours, had you just stayed in the trade.
Greed: there’s a reason it is one of the seven deadly sins. Admittedly, this has always
been my great weakness until I learned to manage it.
Ego
We are led to believe only smart people can predict the future and that we must be
smart to be traders, and therefore, we should inherently know the future. If it does not
comply to our beliefs, we remain in our trades until it does… or our positions flatten out
and drop to zero. Ego is the ravenous need to be correct at any cost, even if it means
blowing up our accounts. In truth, the market is always right; it is we who need to comply
with it. In the market’s eye, we are nothing.
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Fear of Missing Out (FOMO)
A recent addition to the English language, FOMO is that nagging feeling that everyone
else is having fun and making money but you. “I’ll miss a great opportunity if I’m not in the
market!”, “Everyone’s trading and so should I?” and “They all must know something I
don’t… I’d better jump in!” New traders are especially inflicted with this: if the options
market is open until 4 pm daily, they MUST be in it!
So, how to deal with all this?
Consider this: the stock market is actually your best friend. If you study the charts, you
will readily see the many opportunities it provides on a daily basis, trading the highly
leveraged options on SPY. So why is it so difficult?
Frankly, the enemy is the person in the mirror. Our analytical left and emotional right
brains seemingly do not communicate with each other. We may know what is
intellectually correct but emotionally, we cannot bear the current situation. We lack the
patience to wait out the economic storm and proceed to make the wrong decision.
All too often, regret soon weighs in.
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SOLUTIONS:
No. 1 - Trading Plan
Not just a good idea but it is imperative that you create a plan and use it, including
keeping and reviewing notes on what the challenges were throughout the trade.
Furthermore, you need to ‘Plan the trade and trade the plan’, words you undoubtedly
heard many times and need to live by. If not, you will die by the lack thereof.
No. 2 - Learn to breathe deep and wait
When (not if) the market turns on you, sit back and wait until such time as appropriate to
either see the price return in your favor, a repair opportunity is presented or as a last
resort, you let it loose. Cutting losses is my last choice, one I make reluctantly and only
when no other alternative exists. While I do not invoke stop losses, I do actively manage
my positions.
No. 3 - Learn to say 'no'
Just because the stock market is open does not mean you need to be in it. Nobody knows
you and even fewer people care. In fact, nobody cares about you at all, much less the
market. It’s ok to sit back and watch. Choose quality over quantity. Wait for the setups we
teach and remember, “It’s better to not be in a trade wishing you were than to be in a
trade wishing you weren’t!”
No. 4 - Practice controlling your emotions
When someone angers you, for example, change your reaction. Remain calm and speak
slower. It’s amazing how you disarm your aggressor when you do not provide the
reaction they expect…. works with babies through adults, friends, family and strangers.
Approach irritating people with kindness and observe the difference. Your adversary will
reflect your emotion.
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No. 5 - Get proper nutrition and sleep
We often disregard this advice but countless studies show the impact of bad eating
habits, leading to fatigue, foggy thinking, bad judgment, weight gain and stomach issues.
Sleep deprivation leads to low attention to detail, poor memory and significant mood
swings. This is fact, not just someone’s opinion… take heed and use all the help you can
get.
No. 6 - Practice patience
Drive the speed limit on the interstate. Learn to listen to your grandchildren. As much as
you hate shopping, take your mother to the mall. To them, it’s important. To you, expect
an increased level of patience as the more you engage in these exercises, the better
trader you will become. Success in the market is more than finding the right strategy; it’s
being able to deal with the market nuances on its level. At times, only patience will pull
you through.
No. 7 - Improve your discipline
Can’t fight the urge to eat that candy bar every time you walk past the checkout counter?
Learn to view that piece of chocolate through a different lens: consider it rat poison
instead. Rather than trigger the sweet tooth ‘gotta have it’ impulse, you should be
repulsed by it. Good for your health and great for your emotional control when you can
say “No, not this time.” Discipline is indispensable to good trading. The more you practice
it, the easier it gets.
No. 8 - Get a great mentor
All great performers, athletes and singers invoke the help of coaches. Effective personal
advisers can see the areas needing improvement and aim to better your score, in
whatever field your game. A constructive options trader trainer is worth his/her weight in
gold as it is your money being traded… seek the very best and pay attention to their
recommendations.
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This publication is by no means comprehensive but a mere introduction to emotional
control for successful options trading. I highly recommend mastering the proper
mindset before even opening up a trading platform. There are no guarantees in this
business, except one: you WILL lose your money if you do not know what you are doing.
Emotional control is paramount.
A final word of advice: to reiterate, a great mentor is indispensable. Profits can be
stunning but the risk of loss is also huge. Can you afford not to engage in proper
mentorship? Learn from the mistakes of others as you will not live long enough to make
them all yourself.
IT TAKES TIME TO BECOME A GREAT TRADER.
The process is long but the effort is more than worth it. Understand the fundamentals,
learn the strategies and depend on the experience of your coach to guide you through,
including cultivating your emotional acumen.
We train traders. We coach in all aspects of this endeavor.
Book a brief, free consultation with one of our coaches to see if we can get you on the
right path to becoming a great trader! Click here to reserve a convenient date and time…
either a telephone call or through Zoom®.
I look forward to your success!
Head Trader Hugh
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IMPORTANT NOTICE:
Trading Stock and Stock Options involves a substantial degree of risk and may not be
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