Hey Bella,

I’m a relatively new trader as I’ve been trading for a little over a year now. The best plays that have the highest win-ratio for me are scalp plays. My question is, how do you know when you have enough conviction to act to execute, or consider executing, a trade on a specific stock? I understand every trader is unique and finds the best set-ups that he/she is confident in but, how does a trader measure conviction? What involved in your own mental checklist? What is the best way to consider the opportunity you have in Stock XYZ compared to the opportunity in Stock ZYX?

Just also want to say thank you for hosting the blog. It has been a major help to me from day 1!

Be real!,
Garry

Bella

A trainee wrote in a review this week about his trading: Too much impulse trading — changing my mind on a trade and bidding out, changing my mind on exiting a lot and putting it back on without a reason other than the first cover was a mistake, front running my stops, declaring things like “at this point, it shouldn’t get back there” and moving my stop to the 1c piker stop, things like that.

Bella: not sure i agree here. seems like you are building intuition here which is wonderful and was off. building intuition is an exciting signal of growth. thoughts?

Trainee: It’s possible I’m being results oriented. There’s a fine line.

for example, I’d get long FSLR at the 32 level when it’s holding above, 11c stop since there’s some accumulation below it (wicks), then it gets to .94x.96, pause, and I wouldn’t see the price rejection immediately… so I’d hit the .94 because I don’t want to get slipped and it doesn’t seem like itll work. Then it does wick back up and I get back in at 32 and just decide to honor my stop… and I take a 20c loss on the stop out, with a 9c slip. I was sort of onto what could happen, but I end up taking the slip anyway. When I see results like this in my trading, I just wonder what the hell I am doing and if I’m really thinking things out in advance. Maybe just screwy stocks.

Bella: me: yeah but sometimes there is just a voice in your head that says not this time. and you want to learn to depend on that voice and trust it

Trainee: true, sometimes im out early on a play and im not sure if it’s fear or intuition.

So the answer is that there is a trading voice in your head that says, “Buy” or “Short”. Through screen time, review of your trading, discussions with other traders, archiving of your best trading set ups, film review, reading, thinking, are re-reviewing you develop your trading intuition. And then you just trust that intuition.

I hope that helps. Great question!

Bella
One Good Trade

no relevant positions