Foundations Quiz 1

TG Day Trading Stock And Options Course

Choose the best answer from the available choices. One response must be selected for each question.

1) Which of the following describes an avoidable trap which many traders fall into?

Most traders fall victim to the biased views they hold about themselves. Some of us tend to be overconfident and our inflated ego leads us into unnecessary risk, while others have such a negative opinion of themselves that they let fear poison an otherwise-healthy trading system.

Humans have a limited working memory, but we try to convince ourselves that we will remember everything when it comes to crunch time. Instead of using a trade log to record and measure our progress accurately, we leave ourselves open to risk by trading on instinct.

Some traders are consumed by the notion that they should be perfect, and they never accept losses as a simple fact of process-based trading. This expectation is not grounded in reality and causes overcorrections and tinkering whenever they experience even insignificant losses.

All of the above are avoidable traps which many traders fall into.

2) What is self focus?

Self focus is an egotistical thing some traders do to try and make themselves feel superior to other people.

Self focus is a new concept that millenial traders made popular with their love of taking selfies. The resulting frontal cameras on smart phones has transformed the tech sector and increased the valuation of social media companies.

Self focus takes up a huge part of a trader's day, so you can only implement this beneficial practice if you've been successful for 5+ years.

Self focus is our ability to be introspective, to look inside and assess our state as a trader, and reinforce positive tendencies without letting the external world distract and prevent us from improving.

3) Which of the following is a best practice for avoiding self sabotage in your trading?

Self-sabotage can be avoided by observing my own thoughts and desires, then associating my actions today with my results of tomorrow, and staying dedicated to a better tomorrow rather than settling for mediocre results.

If I never acknowledge that I'm sabotaging myself, I never become aware that I'm doing something risky, so really it's no skin off my back and I can keep gambling with my trading account to chase that thrill of "winning."

If I enter a trade and experience a significant loss, a little voice inside me convinces me that I'm already 100% committed so I have no choice but to hold on, until it either turns profitable or my position loses all its value. Ignoring that little voice and cutting my losses would be self sabotaging behavior.

Both the first and third choices are best practices for avoiding self sabotage in my trading.

4) How can you manage your day trading expectations effectively?

Adopt a trading mindset of perfection, and then attempting to squeeze every cent of profit out of each trade, specifically by trying to time the absolute tops and bottoms of trends.

Establish initial goals and expectations, develop and practice a strategy in the simulator as I learned to do in basic training, adjust my expectations realistically based on the unbiased results I log, and reevaluate as conditions change.

Approach trading with a mindset that my expectations have nothing to do with with my demonstrated capabilities in practice. You only live once, so I'm shooting for rapid improvement, skipping simulator training altogether, and making my mistakes in the live market with my real cash on the line.

There are milllions upon millions of dollars changing hands every day in the market and I expect so I expect to grab multiple millions before the end of the month.

Foundations Quiz 1

TG Day Trading Stock And Options Course

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