Archives of “January 3, 2019” day

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Who are You ?Monkey, Lizard or Squirrel

  
Analysis, Education
AnthropologistsAnthropologists like to point to caveman days for the reasons we act certain ways. Add financial planners to the list of those who are now looking at animal tendencies for answers to why people invest the way they do.

Basically, it comes down to three types — monkeys, lizards and squirrels. It could be that our “investor brains” evolved from some of these animals along the way to walking upright.

Monkeys
First, the monkey investors. These investors are the playful, loving type that can be content one minute and then swinging through trees like mad the next.

They get easily excited at the next big investment opportunity in hopes of making a killing. Not much thought goes into what they do. Just what will be fun for the moment or what the other monkeys are investing in now. (more…)

30 Trading Rules

  
  Education
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1. Buying a weak stock is like betting on a slow horse. It is retarded.

2. Stocks are only cheap if they are going higher after you buy them.

3. Never trust a person more than the market. People lie, the market does not.

4. Controlling losers is a must; let your winners run out of control.

5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.

6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.

7. Emotional traders want to give the disciplined their money.

8. Trends have counter trends to shake the weak hands out of the market.

9. The market is usually efficient and can not be beat. Exploit inefficiencies.

10. To beat the market, you must have an edge.

11. Being wrong is a necessary part of trading profitably. Admit when you are wrong.

12. If you do what everyone is doing you will be average, so goes the definition.

13. Information is only valuable if no one knows about it.

14. Lower your risk till you sleep like a baby.

15. There is always a reason why stocks go up or down, we usually only learn the reason when it is too late.

16. Trades that make a lot of intellectual sense are likely to be losers.

17. You do not have to be right more than you are wrong to make money in the market.

18. Don’t worry about the trades that you miss, there will always be another.

19. Fear is more powerful than greed and so down trends are sharper than up trends.

20. Analyze the people, not the stock.

21. Trading is a dictators game; you can not trade by committee.

22. The best traders are the ones who do not care about the money.

23. Do not think you are smarter than the market, you are not.

24. For most traders, profits are short term loans from the market.

25. The stock market can not be predicted, we can only play the probabilities.

26. The farther price is from a linear trend, the more likely it is to correct.

27. Learn from your losses, you paid for them.

28. The market is cruel, it gives the test first and the lesson afterward.

29. Trading is simple but it is not easy.

30. The easiest time to make money is when there is a trend.

10 points To Become Great Trader

  
  Education
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  1. Cutting losses short is an edge. Only having small losing trades will save you from the big losses.
  2. Letting your winning trade run as far as it will go is a huge advantage over most traders. Having some huge winning trades will help your overall profitability.
  3. Eliminating the risk of ruin through limiting the total amount of capital you will lose on any one trade will keep your account intact and is an edge over those traders that eventually blow up their trading account.
  4. Proper position sizing will allow you to keep your correct decision making process in place by limiting the emotional impact of any one trade. This is an edge over many others that panic during a big trade and make an emotional decision.
  5. Having the discipline to consistently follow a predetermined written trading plan is an edge over many others that make decisions based on opinions and feelings.
  6. Having the confidence and faith in your trading method to follow it through losing periods is a huge edge. Most drift to new methods right when their last one finally starts working. (more…)

Winning Attitude

  
  Education
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Developing a Winning Attitude will stop negative thoughts from creeping in, and outside influences from changing your plan. Here are my thoughts about developing a winning attitude:

  1. A positive attitude enhances your market performance.
  2. Don’t dwell on losses if they are part of the system’s performance.
  3. Attaining a goal starts by having a goal. Avoid setting goals that cannot be achieved. Achieving your goals means sticking to your system each day.
  4. Achieving your goals means doing the homework before the market opens.
  5. Achieving your goals means placing all of orders ahead of time.
  6. Understand how your system is constructed and its maturity before you take the first trade.
  7. Achieving your goals means following through from start to finish.
  8. Focus on the next winning trade, and leave the last trade behind.
  9. Be organized, consistent, set goals and follow through.
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