Foundations Quiz 3

TG Day Trading Stock And Options Course

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

1) What does disciplined trading look like?

Following the rules of my system most of the time, but bending them if I think a stock is really going to trend strongly in the next few minutes.

Relying on my future self to have the discipline to dig me out of whatever holes I put myself into while chasing the big money.

Identifying and defeating harmful habits, ideally by accentuating the potential positive outcomes over fear of failure.

Respecting the urges I feel to hunt for trades when I think about all the people with nicer houses and cars than me.

2) Why is hope so unhelpful in your trading process when it sustains people in so many of life's difficulties?

Hope is a feeling that everything will turn out ok in the end, but that's not true in the volatile environment of the stock market, so it's like a wolf in sheep's clothing.

Hope signals a dissatisfaction with my current circumstances, so I look past them to what I perceive as a brighter future. That can mean I take additional risks like jumping the gun and entering a trade before all my rules are met, or holding onto a trade that clearly turned around on me.

Hope is not grounded in evidence, it's an emotional hijack that leads me to dangerously try to predict what's coming next. It puts me in an optimistic frame of mind - even when there is no justification for optimism reflected in the indicators on my screen.

All of the above are reasons why hope is unhelpful to my trading process.

3) Which of the following is NOT an example of greed negatively influencing a trade?

Jody is normally patient and trades strictly when her rules are met. She goes to the kitchen coffee and hears breaking news that interest rates have just been raised by the federal reserve. Jody runs back in and buys a put option because she assumes everybody will panic and sell, and she wants to get in early to maximize her profits. The bear trend never materializes and she must exit with a big l

Freddy buys a call option and within a minute his profit is 15%. He told himself he wouldn't accept less than a 20% gain so he holds on despite his indicators weakening, but the option never reaches 20% profit and instead Freddy exits with a 10% loss.

Austin is clicking around the different stocks on his main list and sees that one of his indexes has been trending strongly upward for the last 10 minutes and is about to reach the previous days high. Having practiced his process countless times and learned that getting into old trends that are near a line of resistance is risky, he decides to wait. There are a million more trades coming that do f

Elaine has been saving to buy her daughter a car for her 16th birthday. She has dropped some hints to her daughter, so she feels obligated to come through. All she needs is one big gain to afford the car and be the hero. At the opening bell she puts her entire account into put options on a stock she's convinced herself will drop today, despite its recent growth and the overall bull market. She hol

4) What does it take to day trade consistently?

Hard work, patience, dedication, and the perseverance to reach my goals.

Preventing the avoidable mistakes by practicing my process in the replay simulator until I no longer fall for the same obvious tricks.

Studying the habits of others who are consistently successful, whether as traders or in another discipline, and incorporating concepts from their preparation and execution into my trading process.

All of the above help me day trade consistently.

Foundations Quiz 3

TG Day Trading Stock And Options Course

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