An incisive and actionable guide to trading success
In The Trading Mindwheel: Eight Essential Skills for Trading Mastery, Michael Lamothe delivers a hands-on and practical roadmap to personal investing success. In the book, you'll explore the belief systems, mindsets, and market psychology you need to master to maximize your investment returns. You'll also learn to analyze trades, markets, and risk as you manage your portfolio and continuously improve and validate your own skills.
You'll also find:
- Ways to use journaling as a roadmap to continuous personal improvement
- Strategies for using post analysis to validate your own skills and trades
- Methods for managing individual trades and portfolios in a way that limits relevant risks
A can't-miss resource for anyone interested in trading, investing, finance, and personal wealth, The Trading Mindwheel: Eight Essential Skills for Trading Mastery belongs on the bookshelves of people seeking to build wealth.
Table of Contents
Foreword xiii
Introduction xv
Prelude xv
The Start of Something Life Changing xv
Philosophy of the Trading Mindwheel xxii
The Axle Mindset: Beliefs, Belief Systems, Emotions, and Habits 1
Jesse Livermore’s Story 2
Mindset Is Everything 3
Taking Inventory of Our Beliefs 3
2 A.M. Wakeup Call 4
Deconstructing Beliefs and Belief Systems 6
Write Your Beliefs 9
Emotions and Emotionality 14
The Marathon 15
Healing Wounds 16
When White Knuckling Fails 18
Meditation Is a Marvelous Tool! 21
Seek Clarity 22
Equanimity 33
Spoke 1 Journaling: Step One of Accountability and Continuous Improvement 35
What to Journal About 37
Types of Journals 44
Trading Routines 46
Spoke 2 Analysis: Analyzing Trades and Markets 55
Three Things I Learned the Hard Way about Trading 56
Analyzing Trades and Analyzing Markets 69
Influences and Studies 72
Fundamental Analysis: Defining Our Universe 74
Defining Our Setups 86
Developing a Funnel 96
Analyzing Markets 96
Spoke 3 Risk: Initial Capital Risk, Position Sizing, Potential Reward 107
Risks Involved in Risk 109
Mindsets Needed for Risking Capital 115
Ways to Effectively Manage Risk 122
Spoke 4 Trade Management: Managing Risk throughout the Life of the Trade 137
Life Cycle of a Trade 139
Beginning of the Trade 140
Four Types of Exits 143
When to Sell in Stages vs. When to Sell It All 154
When to Add 159
Dealing with Earnings Announcements 163
Spoke 5 Portfolio Management: The BIG Picture and Assessing Our Total Risk 165
Assessing “Portfolio Heat” 166
Paul’s Story 168
Setting Up Circuit Breakers 170
Spoke 6 Post Analysis: Step Two of Continuous Improvement 173
What to Include in Post Analysis? How Long and How Often? 174
Getting Organized 176
Three Habits That Will Help You Improve 179
Discipline + Balance = Sustainable Success 182
Spoke 7 Testing: Factor Modeling, Back Testing, and Forward Testing 187
Factor Modeling 188
Back Testing 192
Forward Testing 193
Conclusion 197
Acknowledgments and Inspirations 199
About the Author 201
Index 203
