Does your trading mindset hold you back?

To be a successful trader, you have to know yourself and stick to your strategy. John C Burford illustrates the point using the Dow and gold markets.

I write occasionally in these posts about how critical trading psychology is to your success in the markets.

This is a much-neglected area that most traders push to one side to focus on trading technique or the news. This is a big mistake, as I hope to show you.

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(Contracts of $5 x DJIA index)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 103,065
Commitments
30,0468,44949256,23580,79086,77389,73116,29213,334
Changes from 08/20/13 (Change in open interest: -5,745)
-8,273108-4345,346-7,092-3,361-7,418-2,3841,673
Percent of open in terest for each category of traders
29.28.20.554.678.484.287.115.812.9
Number of traders in each category (Total traders: 91)
2615537206637Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.