If you don’t see anything, you don’t initiate a new position. You take risk only when you see an opportunity. Make it a habit to ask yourself for each trading or investing decision – do you have an edge or do you just hope to be right. Hope is not a strategy.
Archives of “January 2, 2019” day
rssBound to Lead
“There are men whose gait is far quicker than the mob’s. They are bound to lead — no matter how much the mob changes.”
– Reminiscences of a Stock Operator
What does it mean for a trader to lead — to have a gait far quicker than the mob’s?
In a short-term time frame, it means faster reaction time. Having the ability to see the meaning of an inflection point, and act on it in size, before the mob catches up.
In medium or longer-term time frames, it means the ability to see “general conditions” crystallize around probabilistic outcomes well before the mob does. Market analysis will vary widely in quality. Not only that, but some market participants will be slow to pay attention — or get bound up in emotional bias, or otherwise get their variable weightings wrong.
These factors then combine to create windows of opportunity, on a consistent basis, for those whose observations are accurate and timely.
Are you “bound to lead” in your trading? What aspects of your methodology reflect this?
Courage
Concentrate on developing courage now, or risk a shortened investment career. Trading is not for the weak hearted. The markets are unpredictable and even the smartest analyst will make mistakes. Eventually everyone experiences a sequence of losing trades and you will not be exempt. You have a choice between self-pity and self-reflection. The Genius Trader has the courage to look at their mistakes and learn from them. The average trader perceives this as too painful, and simply curses their bad luck.
How do you become a more courageous trader? You must journal every single trade. Over the years, as I continue to interview accomplished investors, they all keep some form of trading journal. This provides such valuable information that I incorporate into other areas of my life. A detailed trading journal will be a big revelation into the success behind your best trades, and possible causes behind your losers. Armed with these facts, self-reflection becomes more productive.
Thought For A Day
A Quitter Never wins and a winner never quit.
Easy Way To Quit Trading (This is Reason 90% Lose Money )
Think It Over
Some valuable lessons for life…
‘Alexander Elder Quotes’
Trading is not all about just stock picking, it is not just about a winning system. Yes, first you have to understand how to trade and put the odds in your favor of winning, but that is not enough. You must also add in risk management so when you lose ten times in a row your trading career and account does not end there. You also must have faith in your system and method to be able to keep trading it even when you are losing, and you will have losing months, maybe even a losing year, can you keep going to be around for the big wins?
One dimensional traders just pick stocks, if they are right they win for a while, but eventually they do not stop out when they are wrong and they blow up their account. They also eventually get emotionally frustrated from wild equity swings and they eventually quit and blame the market.
Two dimensional traders have a good system and cut their losses but have trouble with self confidence and belief in their system. They tend to blame themselves when their accounts draw down 10% to 20% and have trouble understanding that it is just part of the game. The market environment is determining wins and losses not the trader, they don’t understand this. All they can do is take their entries and exits as they come and let the market do what it does. They have not separated themselves from their trading.
The three dimensional trader takes entries and exits based on his methodology that he believes in, he manages risk per trade carefully and never loses more than 1% t0 2% of his capital on any one trade. The 3D trader’s self worth and confidence is not tied up in any one trade, or monthly performance he understands this is a long term process with ups and downs. Wins and losses do not change his mindset. It is just a business, stocks are just inventory, the market gives and the market takes away, and he just takes what it is giving.
Take Print out and Read Daily
