Archives of “January 5, 2019” day

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Bill Lipschutz :Trading Quotes

  
  Education
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Missing an opportunity is as bad as being on the wrong side of a trade. Some people say (after they have the opportunity to realize a profit) “I was only playing with the market’s money.” That’s the most ridiculous thing I ever heard.

When you’re in a losing streak, your ability to properly assimilate and analyze information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak. You have to work very hard to restore that confidence, and cutting back trading size helps achieve that goal.

I don’t have a problem letting my profits run, which many traders do. You have to be able to let your profits run. I don’t think you can consistently be a winner trading if you’re banking on being right more than 50 percent of the time. You have to figure out how to make money by being right only 20 to 30 percent of the time.

Successful traders constantly ask themselves: What am I doing right? What am I doing wrong? How can I do what I am doing better? How can I get more information? Courage is a quality important to excel as a trader. It’s not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and stay with it.

It’s very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you’re doing if you’re a successful trader.

So many people want the positive rewards of being a successful trader without being willing to go through the commitment and pain. And there’s a lot of pain.

Avoid the temptation of wanting to be completely right.


Jack Schwager on Market Sense and Nonsense

  
Education, Video
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This is Jack as analyst, not as trader interviewer. I think the insights herein will benefit investors especially over traders, although both are served well. Jack totally destroys the EMH in this book. He also debunks a great deal of conventional wisdom for the investor, which I think will be shocking at first. Why? Conventional wisdom “feels good” and to go against the grain so to speak as an investor takes a great deal of emotional intelligence — and a strong inner voice — which most investors don’t have. Good trading and investing oftentimes does not “feel” good at all. It’s much easier for a newbie or amateur to go with the crowd and succumb to one’s emotions. What feels safe is normally not a proper risk management decision for the untrained.

At the end of each chapter, Jack delineates several “Misconceptions” that I believe are worth the price of the book. One in particular deals with when it’s NOT a good idea to just blindly buy the S&P 500 after it’s gone up a certain amount.

Market Sense and Nonsense is an objective take on popular investment themes that is backed with a great deal of data to support its claims. I think the conclusions in this book will surprise most of its readers and that’s a good thing. At least they will be armed with strong arguments to bring up with their advisors.

Wiswell Proverbs Good for Trading

  
Analysis, Education

Mr. Wheat asks for a few Wiswell quotes great for trading:

“We suffer defeat gladly, as we know that is the only way to learn, and improve, and ultimately to win”

“The world can’t guarantee you wins. You must depend only our own good moves for success”

“Look twice before you move once, and do it every game”

“The board supplies no easy answers. Therefore it is necessary to take a calculated risk: that is not the same as gambling”

“If you want to knock a player out, you have to go for the solar plexus”

“How can a genius make all the right moves in a board game, and then make all the wrong moves in the game of life”.

“Occupy, or attack the center. The sides and corners are lifeless. The center radiates warmth and energy”

Emotional Fractals – The Market is the Ultimate Authority Figure

  
  Education
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  • We apply what we learned about ourselves, our relationships to important people in our lives, and our perceived role in the world when we were young, to our perception of what is happening in our adult lives.
  • The market acts as the ultimate authority figure, and its tick-by-tick declarations tap into the feeling contexts from earlier in life.
  • The markets, as symbolized in the most implacable authority figure — price — creates an inference regarding whether your current value is better or worse. That taps directly into how you feel about yourself.

Byron Wien's Lessons Learned

  
  Education
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I was scheduled to speak about the world outlook at an investment conference recently and shortly before my time slot the conference organizer said the audience was more interested in what I had learned over the course of my career than what I had to say about the market.  I jotted a few notes down and later expanded and edited what I said that day. I have since been encouraged to share my thoughts with a broader audience.

Here are some of the lessons I have learned in my first 80 years. I hope to continue to practice them in the next 80.

    1. Concentrate on finding a big idea that will make an impact on the people you want to influence.  The Ten Surprises, which I started doing in 1986, has been a defining product.  People all over the world are aware of it and identify me with it.  What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at year-end.  If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.
      1. Network intensely.  Luck plays a big role in life, and there is no better way to increase your luck than by knowing as many people as possible.  Nurture your network by sending articles, books and emails to people to show you’re thinking about them.  Write op-eds and thought pieces for major publications.  Organize discussion groups to bring your thoughtful friends together.
        1. When you meet someone new, treat that person as a friend.  Assume he or she is a winner and will become a positive force in your life.  Most people wait for others to prove their value.  Give them the benefit of the doubt from the start.  Occasionally you will be disappointed, but your network will broaden rapidly if you follow this path. (more…)

        The Market Mistress is Stalking You

          
          Education
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        Have you ever had to deal with a stalker? It could just as easily be the Market Mistress.
        And to understand the market mistress we must better understand each of the
        following:
        Common Stalker Characteristics
           – Jealous
           – Manipulative
           – Narcissistic
           – Deceptive
           – Obsessive and compulsive
           – Falls instantly in love
           – Socially awkward or uncomfortable
           – Needs to be in control
           – Depends on others for sense of self
           – Unable to cope with rejection
           – Sense of entitlement (you owe me!)
           – Unable to take NO for an answer
           – Does not take responsibility for own feelings or actions.

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