Greg Gossett, a seasoned retail trader with over 24 years of experience, shares vital trading insights and lessons learned throughout his journey. He discusses the importance of emotional control, position sizing, and patience as key elements for success. Greg passionately explains the power of reflection in decision-making. The conversation takes an intriguing turn as they explore the cognitive benefits of chewing gum in trading and sports, including its role in enhancing performance and focus. A truly enlightening dialogue filled with actionable wisdom!
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Quick takeaways
Position sizing is crucial for risk management, allowing traders to sustain losses and maintain emotional stability during market fluctuations.
Patience and adherence to a comprehensive trading plan significantly enhance decision-making and foster systematic approaches for trading success.
Deep dives
The Importance of Position Sizing
Position sizing is highlighted as a fundamental aspect of successful trading, with an emphasis on its direct impact on risk management and emotional stability. New traders often make the mistake of taking large positions, which can lead to significant losses and destabilization. A conservative approach, such as limiting positions to 10% of total capital, is recommended to ensure traders can endure the inevitable ups and downs of the market without jeopardizing their overall trading longevity. By focusing on appropriate position sizes, traders can maintain a long-term perspective, understanding that each trade is merely a part of many to come.
The Value of Patience in Trading
Patience is identified as a key trait that distinguishes successful retail traders from their institutional counterparts. Ideal trading setups should be identified in advance, allowing traders to wait for optimal market conditions rather than acting impulsively. Developing the discipline to remain patient and adhere to a trading plan can lead to improved decision-making and overall success. Building habits surrounding this patience is essential, as it reinforces a systematic approach to trading that helps manage impulsive behaviors.
The Necessity of a Comprehensive Trading Plan
Having a complete and actionable trading plan is underscored as critical for success in trading. This plan should include specific entry and exit strategies, detailed money management practices, and provisions for various market conditions. New traders often start with only a partial plan, focusing solely on entry points without consideration for exits or risk management. By developing a thorough plan that outlines responses to different scenarios, traders position themselves for better outcomes and are less likely to make impulsive decisions.
The Role of Reflection in Trading Growth
Reflection is emphasized as a vital practice for continuous improvement and self-awareness in trading. After trading each day, successful traders often review their performance, identifying what was executed well and where mistakes were made, helping to foster a mindset of self-critiquing rather than dwelling on failures. This reflective process promotes emotional balance and aids in building a clearer understanding of one's trading approach and personal behaviors. Engaging in regular reflection can help traders internalize the lessons from their experiences, leading to improved practices and success in the long run.
In this episode of the AlphaMind podcast we interview veteran retail trader Greg Gossett.
Greg is well into his third decade of retail trading, proving that it can be done, and can be done well.
In this excellent interview Greg shares with Steven and Mark his thoughts on the 3 key things he wished he had known when he started trading that he knows now. These 3 aspects are cornerstones to his trading method and his reflections on them are powerful insights in trading which carry important lessons for traders of all levels.
Greg also provides a daily mentor and trading podcast which is available to all free on Youtube. Greg talks about his work mentoring traders on his Gossett Trading & Mentoring and how it helps him in his own trading.
The latter part of this episode looked at the ‘Performance’ aspects of trading with a rather unusual twist: Mark raised the idea that elite athletes are using ‘Chewing Gum’ to enhance performance, with the act of 'chewing gum' being related to improved performance.This performance aspect expanded out more fully into a discussion on performance, human biology, neuroscience, and trading.
This was a great and highly inspiring interview which includes some great discussions and valuable lessons on the mental aspects of trading.
AlphaMind: Powering Performance in Global Markets AlphaMind brings powerful change, growth and development to people and businesses within global markets. Driven by a deep understanding of how markets work, and how people and businesses function within them, we partner with clients to create personal performance improvements that elevate returns across their trading activities. Go to the AlphaMind website to know more.
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