Archives of “January 3, 2019” day

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Dealing with entry timing

  
  Education
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How do you personally get around from being “too early” or “too late” on an entry?

There are a few things that have helped me get over missing a trade or “being right” and not making money.

  • Opportunity vs profit. I thought the market owed me profits.  Now, I see the bars on the chart not as profit but an opportunity to profit.  The market does not owe me anything.  I owe it to myself to execute my plan to the best of my ability.  Good things happen.
  • Important feedback. If a trade develops in a way that I had not anticipated, it means I did not notice a change.  It is now up to me to understand why or determine it was an aberration.  Either way the market is giving me valuable feedback.
  • Unlimited time horizon. One of the side effects of trading is missing trades.  It is something that you have to get over.  It is a fact of life.  The next trade is always more important than the last one.  You should have more experience and knowledge, right?  Knowledge of yourself, the market, and the interaction between the two.

Said in one sentence.  I get over missing trades because I do not have a sense of entitlement, willing to use the feedback, and know that it is just one trade in 1000′s or hopefully 10,000′s.

Why We Fear Simple Money Solutions

  
  Education
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I keep coming across an interesting problem. People say they want things to be simpler — investing, life insurance, retirement planning, etc. But when a simpler (and effective) option is proposed, they reject it as too simple.

In most of the money situations I’ve come across, the best solution is almost by definition the simplest. (Note: I didn’t say the easiest.)

So why don’t we go for simple?

1) We don’t believe it will work.

We’re attracted to complexity because anything that requires a lot of something — time, details, money — should work, right? By default, if it’s simple, say only two steps instead of ten, we think we’re missing out.

2) We think simple should be easy.

It’s like the guy who goes to the doctor and says he doesn’t feel well. There must be something wrong with him that a pill could fix. But all the doctor says is, “Get more sleep, eat healthier food and exercise three times a week.” (more…)

Trading Loss

  
  Education
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Trading-Loss-1Losses are part of any type trading. Some are bigger and some are smaller. Every loss hurts, it does not matter whether it is big or small. Learn to respect them and try to minimize them.

A Planned ‘Entry’ leads to a Planned ‘Exit.’ Before you enter into a trade, you have plenty of time to think about Entries/Exits. Once you are in a trade, you have limited focus and may not make rational decisions for the exits (loss/profit).

If you have planned your trade ‘Entry’ with multiple entries/lots at multiple levels, then ‘ADDING’ or ‘Scaling Up’ is part of the plan. Adding is part your strategy. You must know ‘ADDING’ levels and size BEFORE you place your first order. You must also know how you plan to EXIT this trade.

If you are adding more shares/contracts because of a losing position and DID NOT PLAN then averaging down becomes gambling. Most traders blow out their capital by Forced-Adding process. This obviously leads to many psychological issues (Poor discipline, Gun-Shy:Afraid to pull-trigger, Overtrading, Premature Entries/Exits etc.) If you see a Loss at your ‘STOP LEVEL’, get out of the trade than ADD. Never HOPE that this trade will turn-around. 7 out of 10 times, it will NOT turn-around and will end up in a bigger loss. If you have planned ‘STOP’ ahead of your trade, you will feel confident during the trade and may come back to trading with cooler head at a later time/day, in case of a loss.

Principles to being "Super Rich "

  
Education, Life
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#1: Give Your Talents Until They Can’t Live Without It: “Wake up in the morning and find out what you want to give as opposed to what you want to get. Through this practice of becoming a good giver you become a good getter.”

#2: Relentlessly Pursue Your Goals Without Appearing Needy.

#3: If You Don’t Love it, Leave it Alone: “I want to stress is that making money just for the sake of getting paid is a pedestrian activity that you can rise above.” If you don’t love it, don’t do it.

#4: Let Go of the Results: “You really have no control over the results, you have control over the action.”

#5: Get Open: “You want to always be open, creative and fluid as possible, and never become rigid, old or tight.”

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