Mental and psychological aspects are crucial in trading, and learning from failures can lead to success.
Having a clear plan of action, focusing on the first three hours of the trading day, and treating trading as a business are key elements in achieving success as a trader.
Managing emotions, avoiding self-sabotage, and not letting emotions dictate trades are crucial for success in trading.
Deep dives
Dan Chapero's Trading Journey and Mental Approach
In this podcast episode, Dan Chapero shares his trading journey and emphasizes the mental and psychological aspects of trading. He discusses how he bounced back from failures to become a successful trader. Dan highlights the importance of learning from the markets and constantly adjusting strategies. He also emphasizes the need for traders to understand who they are as traders and develop their own style and edge. Additionally, he talks about the significance of routine and having a clear plan of action each day.
The Emotional Rollercoaster of Trading
Dan Chapero opens up about the emotional challenges traders face. He reveals the desperation and depression he experienced during a two-year period of consecutive losses. He highlights the importance of staying mentally strong and learning from losses. Dan also emphasizes the need to take breaks and do activities that center the mind. He advises traders to focus on their process rather than following others' strategies and to make adjustments based on market conditions.
The Role of Routine and Trading Time
Dan Chapero discusses the significance of routine in trading. He explains how he focuses on the first three hours of the trading day and emphasizes the emotional commitment of traders during this time. Dan shares that he sets a clear plan of action the night before, positioning himself for potential opportunities in the morning. He advises against playing catch-up in the afternoon and highlights the importance of recognizing when there is no premium trading opportunity. He also emphasizes the need to treat trading as a business and maintain a systematic approach.
Importance of Managing Emotions and Mindset in Trading
The podcast episode emphasizes the significance of managing emotions and mindset in trading. It discusses the notion that wanting success and being dedicated alone isn't sufficient, as luck also plays a role in achieving success. The speaker uses the analogy of wanting to be taller but not taking action, similar to how wanting success doesn't translate into actual success. The importance of understanding one's trading style, avoiding self-sabotage, and not letting emotions dictate trades is highlighted. The speaker advises traders to turn off profit and loss tracking, focus on trading setups, and not let emotional attachment to gains or losses affect decision-making.
Learning from Trading Losses and Staying Resilient
The episode discusses the inevitable losing periods in trading and how to stay resilient during such times. The speaker shares personal experiences of going through losing periods and emphasizes the need to maintain a positive mindset. Turning off the profit and loss display is suggested to avoid emotional attachment and to focus on trading setups. The speaker advises traders to accept defeat when necessary, take a step back, and observe the market without trading if conditions aren't favorable. The importance of not being fixated on being right but instead trading properly, recognizing price action as king, and learning from experienced traders is stressed. The episode concludes with encouraging traders to stay committed, keep asking questions, and constantly learn and adapt to succeed in trading.
I’ve received many requests for this weeks guest, in recent months. Maybe it’s because he’s a straight shooter who doesn’t mix his words, or maybe it’s because he’s bounced back from harsh failures, to become an exceptional trader.
Whatever the reason may be, I know for certain, you’re going to appreciate the raw honesty and insight of this weeks guest – Dan Shapiro.
Coming up from humble beginnings, Dan called on the neighborhood loan shark to fund his first trading account, which got him through the door to one of the largest prop firms at the time. This is where he rubbed shoulders with many phenomenal traders, who helped shape him into the trader he is today.
This interview is ultimately focused on the mental and psychological aspects of trading. We discuss some of the darkest moments from Dan’s trading career, how to handle losses and grind through slumps, trading the setup and not your PnL, and why you should care more about trading right, rather than being right.
Dan was great to talk to, and I trust you’ll enjoy this episode. Actually, it may even be worthwhile for you to play this through twice, just to ensure you don’t miss anything.
I’m Aaron Fifield, your host of Chat With Traders, and here is this weeks guest from New York City, Dan Shapiro.
