Last week …Many Traders had asked me :Dear Anirudh Sethi… “What would you say is the most important thing you’ve learned about investing and/or trading in 2008?”
Here are some of the replies ….I had given
1)Knowledge is better than luck, but luck surely helps
2)Don’t try to guess where the market is headed – you’ll always be wrong to some degree. Trade what you see not what you want to see.
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3)Let the market speak before I get in the correct mindset to trade. If I don’t, my losses mount
4)Eliminate greed and take my time. Be cool
5)Always limit your downside and don’t be afraid to go short
6)Markets do and need corrections
7)Trade in smaller positions when strategies fail to work as they have in the past
8)Don’t just think about stop losses – but use them!!!!!!
9)Patience and discipline to stay out of the market if one doesn’t have a good idea
10)Always believe the charts
11)Pay more attention to the technicals
12)Thoroughly understand your own risk tolerance
13)That there is no simple system that will work every time
14)When profits come too easily, it is time to reduce risk
15)I learned to trust myself and follow my own plan
16)Comparing stock market returns from the past 50-100 years bears little insight into the next 10-50-100 years. We live in a completely different world and face unique challenges and unknowns
17)Sometimes the best move is no move
18)You must learn to think for yourself
19)Trends, once established, last much longer than anyone expects
20)Clear entry and exit points before the trade is critical
21)Understand the various scenarios that the market may present you and then plan your actions for each of them. That is preparation, not prediction. Prediction tends to bind you to one point of view because when that doesn’t come true, you don’t know what to do.
22)I’ve learned to seek out opinions that challenge my analysis and beliefs and ignore the rest
23)Anything that “can never happen” can happen
24)When the heat is on, you must stick to your plan and obey your trading rules
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