• Jerremy Alexander Newsome

Thinking in "Stock Market" 5 Suggestions to Get You Started

Thinking in "Stock Market"  5 Suggestions to Get You Started

Hi Real Life Traders and Friends! This is Angie Barbosa, thrilled to be a part of Real Life Trading and writing for you again today. I was in The Trading Floor several weeks ago and we were doing some analysis on AAPL, which we do frequently because . . . well, because everyone loves AAPL, right? The products, the company vision, the stock, you name it. I've even heard web musings of an iCar!

Anyway, one of our Traders was sharing her trade details and another person asked, "Why did you enter your position at that price level?" Now, you have to understand that The Trading Floor is an open chat forum where we all have the liberty to call out our trades, share ideas, request analysis, and challenge each other without worry of being criticized. We like to call it "a judgment free zone"! I give this explanation so you'll understand that the question posed was not a challenge, but was instead a request for the trader to be more transparent. Much can be learned by listening to the perspectives and sentiments of others, don't you agree? To answer the question put out on The Floor, the Trader replied that she knew the set up fit her trading plan perfectly. It was that simple. She just knew. At our request, she broke it down for us and explained how she "just knew", but up until then she hadn't had to. Did you catch that? Her trading plan, written out in advance and followed faithfully over time, is becoming so well ingrained that she doesn't have to stop and talk through it step by step by step anymore. The process is becoming part of her subconscious and she's "thinking Stock Market". She sees, she feels, and knows, she acts, and what comes out are confident actions that are plain to see, and fully comprehensible by others who speak the same language.

At that moment I flashed on a memory from my high school French class. Our teacher, Mrs Horn (or Mrs Klaxon, as she insisted we call her, (en francais, si vous plat!?), had an opportunity to do a teacher exchange program for one year, trade places with a French teacher who would come here and teach US while she went and taught HIS students English in France. Mr Fancy Pants Frenchman Teacher wouldn't speak a single word of English to us and it was the most frustrating year ever, not to mention the one and only C grade I got in my entire high school career. I was a terrific student! I could conjugate verbs like a pro, and worked to get the nasal-ly sounds just perfect! I even ate snails! The problem was that while I was working so hard to identify, analyze, and interpret the steps of the language, he'd already moved on to the next paragraph, or lesson, or whatever it was he called "teaching you French" (en francais, of course). I actually broke down and cried once. I thought I knew so much after two years of studying, but I feel like I know nothing! How do people learn this?? 

I actually saw a glint of human in his eyes as he told me that there comes a point when you've immersed yourself in a language that you stop taking the individual, painstaking steps and something clicks: you begin to think, even dream, in that language. It was the one time he spoke to me in English and obviously I've never forgotten the lesson. Keep at it and I'll get there.

Reading our Friend's chats that day on The Trading Floor, it occurred to me that learning to trade the stock market is akin to learning a foreign language in many ways. There are the basic parts of speech (nouns & verbs = candlesticks & support/resistance lines), sentence structure (words combined to say something = candlestick and chart patterns), and the things that add meaning and make things colorful (adjectives = indicators & strategies). The next thought I had that day was that this Trading Friend is experiencing that certain level of comprehension at which she is beginning to think in the language of the stock market. Her steps are becoming automatic, habitual, more profitable, and I'd venture a guess and say that trading is becoming more FUN for her, too! What can you do to work towards this level of understanding? Here are five suggestions:

  1. Create a 'stock language bubble', a physical environment conducive to learning. Check out my article called 5 "Neato" Things to Find in a Trader?s House to get started.

  2. Make a conscious effort to connect with things you see around you using terms and ideas you're learning about the stock market. Pick up a financial publication while at the deli and see how much of it makes more sense to you now than before.

  3. Seek out conversations with others who are learning the stock market language, and don't be afraid to challenge yourselves and each other.

  4. Talk to yourself, or to a video camera, as you do your stock analysis. Listen to the words you use and your thought processes. Post your videos and ask a trading friend to review and share their thoughts.

  5. Listen to the "music" of the stock market. Find teachers that sync with your learning style and broadcasts that you are entertained by and can connect with.

Basically, if you want to start thinking in 'Stock Market' you have to get out of your comfort zone and make it a part of your life. We're all afraid of having a feeling of discomfort, but avoiding it (although it may be the easiest thing to do) won't bring the best results in terms of developing our fluency in this new "language" you want to learn.

Hopefully one or two of the tips above will help you along toward your goal? Remember that we at Real Life Trading are always excited to connect with you and help you in your adventure, so email me at angie@reallifetrading.com 

See? Right there you've already put my suggestion #3 into action! Thanks for your time and happy trading!