Archives of “January 4, 2019” day

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Risk Management -From ASR TEAM

  
  Education
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  • When markets aren’t trending; risk management is everything.
  • In a volatile market, capital preservation is the most important consideration.
  • Don’t be afraid to take small losses.
  • Not to hang on to my losers hoping they will come back.
  • Put in a stop right away and stick to it.
  • Set stop losses every time I trade.
  • Once again I learned that the first loss is the best loss. I let a few go too long again this year.
  • The importance of waiting for setups and limiting losses
  • Opportunities are easier to make up than losses!
  • Must have a stop on every position no matter how strong an opinion I may have!
  • Risk management. I took some losses because I made some trades based on hope and not on price action.
  • Leverage doesn’t work so well during market corrections and makes risk management difficult.
  • In my short-term trading I learned to place stops against my will and philosophy.
  • Faster exits for less risk.
  • Patience!

17th Century Rules of Speculation

  
  Education
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While much of these thoughts are outdated, it’s always a good idea to have a foundation of the first rules of speculation. Number 4 is dead on that you need to trade with money you don’t need and the patience to allow the trade to work out or not work.

What is a goblin treasure btw?

Rules of Speculation

  1. Never advise anyone to buy/sell shares. Where guessing correctly is a form of witchcraft, council cannot be put on airs.
  2. Accept both your profits and regrets. It is best to seize what comes to hand when it comes, and not expect that your good fortune and the favorable circumstances will last.
  3. Profit in the share market is goblin treasure: at one moment it is carbuncles, the next it is coal, one moment diamonds, and the next pebbles. Sometimes, they are the tears that Aurora leaves on the sweet morning’s grass, at other times, they are just tears.
  4. He who wishes to become rich from this game much have both money and patience.

Note: these rules are from “Confusion of Confusions” by Jose de la Vega in the year 1688. Vega was a successful merchant, poet, and philanthropist residing in the 17th century Amsterdam. This book represents the oldest known hints of technical analysis and his accounts of the Dutch markets in the 17th century.

39 Powerful Trading Tips by Ed Seykota That Will Rock Your Trading!

  
  Education
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Quotes by Ed Seykota

Technical analysis

1. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.

2. If I were buying, my point would be above the market. I try to identify a point at which I expect the market momentum to be strong in the direction of the trade, so as to reduce my probable risk.

3. If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical.

4. I set protective stops at the same time I enter a trade. I normally move these stops in to lock in a profit as the trend continues. Sometimes, I take profits when a market gets wild. This usually doesn’t get me out any better than waiting for my stops to close in, but it does cut down on the volatility of the portfolio, which helps calm my nerves. Losing a position is aggravating, whereas losing your nerve is devastating.

5. Before I enter a trade, I set stops at a point at which the chart sours. (more…)

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