I’ve been trading with Bob Iaccino for over 3 years now. I truly believe he has created the trader I am today and I would not be profitable without him.
In his approach he does not only teach a solid strategy, but teaches much needed psychology and disciplines as well in a real world way, not an academic way.
Bob’s mentoring brings in my opinion this:
The first step to becoming a more disciplined trader and having control over your emotions is becoming aware of them. If your results are not consistent, take a close look to see if you are indeed following the strategy you outlined for yourself. Are you entering and exiting positions due to a well-defined signal, or was there some other reason?
Here are some of the most common “symptoms” Bob has taught me to watch out for, especially if you see the pattern occurring with some regularity:
1. Getting out of positions too early, only to see them continue in the direction you were hoping they would go is a sign of fear.
2. Staying in positions to long (without a trailing stop) and watching the markets take back some of your profits is often a sign of greed.
3. Closing a position for a loss, only to see it reverse and go back above break-even and hit target is a sign of fear.
4. Not closing a losing position, and letting small losses become larger ones in the hope of a reversal that never comes because of an incorrect entry you realized and chose to ignore can often be a sign of greed.
5. Jumping into a trend late, after much of it has already happened without you, can stem from a fear of missing out on the move.
6. And jumping in too early, before the market’s given clear evidence of a direction, can be driven by greed.
Bob taught me that it is important to take a step back and really have a close look at what is driving us into and out of the markets. Is it really the strategy and signals we have outlined for ourselves (which should be easy to verify), or is it something else? Our progress in the markets can only be as good as the records we keep, and the time we spend reviewing them. And when we hear news in the markets, it is important to do a quick reality check to make certain we’re giving both positive and negative news the same weight in our evaluations, and not allowing our biases towards a position. Not that we trade the news :))
You are only lying to yourself. “Be internally honest”, Bob repeats with some degree of regularity.
Another simple concept I did not know before Bob; By far the absolute best time to set both targets and stops is before you enter the position. Once the hopes and stresses of the market become your own, we can rely less and less on clear and sound judgement.
Everything I outlined here I learn from Bob and there is 0% probability I would be consistently profitable, trading month after month with out him, his support and his teaching.