In the early 2000s, I had the pleasure of speaking with the late Mark Douglas, sharing stories and sometimes butting heads.
Mark was a famous author and teacher to day traders worldwide. In his book, Trading in the Zone: Master the Market with Confidence, he discusses some of the psychological pitfalls that most traders possess. I took his book and dissected it and challenged Mark on many of his ideas. Keep in mind, this was in 2003-04 and I was in my late 20s, much younger and less experienced than I am today.
His contention to me was that MOST people would never try to day trade if they knew the “truth” about day trading and comprehended what it actually takes to become successful. I understood what he said in theory, but didn’t understand it as it related to Nexgen’s business selling day trading software and teaching traders to win. My contention was that if the plan was good enough and the software obvious enough, anyone could do it. We agreed to disagree and I continued to work on my solution.
In his book, Mark Douglas states, “There is a big difference between predicting that something will happen in the market (and thinking about all the money you could have made), and the reality of actually getting into and out of trades. This is a ‘psychological gap’ that can make trading one of the most difficult endeavors you could choose to undertake…”
Nexgen has worked diligently for the last 22 years to close this gap for day traders. I keep this thought in the back of my mind every day, and it drives me personally to eliminate, or at least reasonably shorten, the gap on what it takes to actually become successful.
In speaking with thousands, if not tens of thousands, of traders, one pattern is very consistent: new traders take between 4-5 years of learning, hard work, and hard knocks to see a glimmer of hope that they will be able to trade, and even then, trading is erratic and game of 2 steps forward 1 and ½ steps back.
In my work with Nexgen, to close this gap, we have created a simple plan to take a new day trader from ground zero to full speed in 4-5 months, not 4-5 years. We believe that the “psychological gap” can only be closed through extremely high number of repetitions (practice) and execution of an exact plan that is extremely rigid with very little ambiguity.
The difference is that this plan is predicated on indicators that are highly adaptive, such as Fibonacci and our Nexgen T3 Trigger Lines. It is the adaptability that allows the rigid plan to be executed in a variety of different conditions. This plan must also work on EVERY market: stocks, bonds, commodities; any equity index or Forex market on that is traded with a high volume by day traders.
Nexgen approaches the market from the top down.
1. Get a big picture of the market. Support and resistance areas are generated by Fibonacci.
2. Understand the current momentum levels by using an intermediate term chart.
3. Fine tune entries with a small chart and a volume analysis component that features automation to remove that last bit of doubt on pulling the trigger.
This, in combination with a live room and countless hours of simulation, culminate in a confidence in the plan, and a belief that is so strong in the trade, you finally get the magic.
The psychological gap is now closed when you are able to execute that one trade over and over without regard to the outcome. When you confident statistically that your one trade will win much much more than it loses, of course you will take it. The path to learning to be successful and how to close that psychological gap is how Nexgen teaches traders who are learning to day trade or who have struggled in the past to become confident and successful.