Yoga of Day Trading 3

Here is a guaranteed way to make money day trading.

It's simple: don't do things that will lose you money day trading.

Well at least that is part of the program. Respect money, honor money, take the good trades and don't take the bad trades.

How do you know which are the good trades? They are specified in your trading plan. But bad trades are like weeds: they crowd out the good trades.

What causes bad trades, other than bad planning? Impulse.

Somebody asked me today what psychological state was necessary to succeed in day trading. I said, objectivity, detachment. Does this mean having no emotion, being emotionless, robotic? Only on one level. One has to have a lot of passion for trading, for the market, to trade. It is not unemotional. But the act of following a plan requires leaving the emotions behind.

Effortless effort. Passion with detachment. Energy in motion; stillness in motion - moving through stillness. All those yogic paradoxes. The Tao that can be told is not the real Tao. And so forth. The ten thousand stocks (and stock charts) rise and fall; the Tao remains.

Be neutral; be the observer, not the observed. Capture the prize.

One important lesson today I received was prizeless: do not change strategy based on the day's profit and loss (unless a specific change in approach to protect profits, or to mitigate losses, is pre-specified in the trading plan). To make money consistently requires acting in a consistent way. Take the trade the same way 100 times. Do not be influenced by the current profit and loss.

Essentially, I moved a stop to break-even before it 'deserved' to be so moved. Meaning that there was no reason to move the stop other than the fact that I was down several risk units and wanted, needed, hoped to make it up. Psychologically, I did not feel I could afford another loss, when my trading plan allowed me to take a full risk, provided I played out the trade according to the plan. The plan has wisdom -- it reflects hours of study, analysis, patient observation, experience, cullling of reflection and results. The pain of the moment has nothing to do with reality: it is a passing fancy, a momentary cloud in the uncluttered sky of the mind. The more I realize trading is a metaphor, like meditation or yoga, the more the activity is imbued with meaning and possibility, both ethereal and real, both cosmic and mundane, both spiritual and monetary. Follow the plan, be the plan, live the plan, and watch the confusion pass like clouds in the sky, until ultimately, utter clarity regins.
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The Law Offices of Michael H. Cohen offers corporate legal services, litigation consultation, and expertise in health law with a unique focus on holistic, alternative, complementary, and integrative medical therapies. The law firm represents medical doctors, allied health professionals (from psychologists to nurses and dentists) and other clinicians (from chiropractors to naturopathic physicians, massage therapists, and acupuncturists), entrepreneurs, hospitals, and educational organizations, health care institutions, and individuals and corporations.

Michael H. Cohen is Principal in Law Offices of Michael H. Cohen and also President of The Institute for Integrative and Energy Medicine, a nonprofit organization exploring legal, regulatory, ethical, and health policy issues in the judicious integration of complementary and alternative medical therapies (such as acupuncture and traditional oriental medicine, chiropractic, naturopathic medicine, homeopathy, massage therapy, energy healing, and herbal medicine) and conventional clinical care. Michael H. Cohen is author of books on health care law, regulation, ethics and policy dealing with complementary, alternative and integrative medicine, including Healing at the Borderland of Medicine and Religion, Complementary and Alternative Medicine: Legal Boundaries and Regulatory Perspectives (1998), Beyond Complementary Medicine: Legal and Ethical Perspectives on Health Care and Human Evolution (2000), and Future Medicine: Ethical Dilemmas, Regulatory Challenges, and Therapeutic Pathways to Health Care and Healing in Human Transformation (2003).
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Health care and corporate lawyer Michael H. Cohen has been admitted to the Bar of California, Massachusetts, New York, and Washington D.C. In addition to qualifying as a U.S. attorney, he has been admitted and to the Bar of England and Wales as a Solicitor (non-practicing). For more information regarding the law practice of attorney Michael H. Cohen, see the FAQs for the Law Offices of Michael H. Cohen. Thank you for visiting the Complementary and Alternative Medicine Law Blog.
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