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Risk

risk-ASRAt some point traders realize that no one can tell you exactly what is going to happen next in the market, and that you can never know how much you are going to make on a trade. Thus the only thing left to do is to determine how much risk you are willing to take in order to find out if you are right or not. The key to trading success is to focus on how much money is at risk, not how much you can make.

Parsons’ Rules

Bob Parsons is the founder of GoDaddy.com. GoDaddy is the domain name site with those obnoxious Superbowl ads — and the company that made Parsons a billionaire.
(I guess when you’re a billionaire you can get away with an awful looking earring.)
Many years ago, I came across “Parsons’ Rules” — a list of 16 rules for success in business and life. They struck me as pretty damn good.
I was reminded of Parsons’ Rules while tinkering with another project this weekend, and realized they also apply to trading.
 
So here they are (original list here):
1. Get and stay out of your comfort zone. I believe that not much happens of any significance when we’re in our comfort zone. I hear people say, “But I’m concerned about security.” My response to that is simple: “Security is for cadavers.”
2. Never give up. Almost nothing works the first time it’s attempted. Just because what you’re doing does not seem to be working, doesn’t mean it won’t work. It just means that it might not work the way you’re doing it. If it was easy, everyone would be doing it, and you wouldn’t have an opportunity.
3. When you’re ready to quit, you’re closer than you think. There’s an old Chinese saying that I just love, and I believe it is so true. It goes like this: “The temptation to quit will be greatest just before you are about to succeed.”
4. With regard to whatever worries you, not only accept the worst thing that could happen, but make it a point to quantify what the worst thing could be. Very seldom will the worst consequence be anywhere near as bad as a cloud of “undefined consequences.” My father would tell me early on, when I was struggling and losing my shirt trying to get Parsons Technology going, “Well, Robert, if it doesn’t work, they can’t eat you.”
5. Focus on what you want to have happen. Remember that old saying, “As you think, so shall you be.”
6. Take things a day at a time. No matter how difficult your situation is, you can get through it if you don’t look too far into the future, and focus on the present moment. You can get through anything one day at a time.
7. Always be moving forward. Never stop investing. Never stop improving. Never stop doing something new. The moment you stop improving your organization, it starts to die. Make it your goal to be better each and every day, in some small way. Remember the Japanese concept of Kaizen. Small daily improvements eventually result in huge advantages. (more…)

Motivational Message For Traders

Success is from within, not without.

It takes time to become a successful trader…no matter the strategy employed.  I believe anyone can become a great trader, not because of some indicator or strategy or the ability to quickly discern the thinking of some guru, but because within each of us is the seed of success, always ready to grow and prosper, if given the proper nourishment.    It all boils down to emotion and what we do with the attributes we are all born with.  If we nourish focus,  patience, and discipline, then we will become great traders in spite of ourselves.   But, like anything in life, we tend to doubt our abilities, believing success is for the other guy, who was born with the right genes, at the right time, in the proper environment.

So, the next time we begin to doubt ourselves, our environment, our genes, we should remember success is from within, not without.  There is nothing and no one but ourselves who can stop us from experiencing the success we so richly deserve.

If we are looking anywhere else but within we will continue to be without!

Technically Yours/ASR TEAM/BARODA

Always Be Learning

When you love to do something, you enjoy learning more and more about it.  Most active traders would rather trade than do just about anything else.  Do we enjoy the learning?  Depends upon how we come upon it.  When something is a core value, our fascination with learning more about it is endless.  You can’t get enough of it.  However, when we learn through painful experience, such as the hard knocks of trading, enough certainly is enough.

Losses are tough.  Errors and mistakes are bothersome.  And, yet there’s almost always a lesson in there if you remain alert to improving.  I’ve always said that mistakes are okay if you acknowledge them and learn from them.  James Joyce said, “Mistakes are portals of discovery.

As I trade and make mistakes, I say to myself, “I don’t have to do that again.”  And I feel reassured and optimistic about the future. Of course, I do, “do that again”.  We all do.  There are certain default attitudes and positions we naturally fall prey to.  But with an attitude of learning, we do it less and less until we (hopefully) stop repeating the unhelpful thinking and behaving. (more…)

Never Revenge On The Market

revenge-oneThere is a direct correlation between your ability to let the market tell you what it is likely to do next and the degree to which you have released yourself from the negative effects of any beliefs about losing, being wrong, and revenge on the markets. Not being aware of this relationship, most traders will continue to observe the market from a contaminated perspective

HOW DISCIPLINE HELPS IN TRADING

“Discipline in executing each and every trade according to your trading methodology is the secret to your success. If you want to improve your trading, what you need to do is very simple. Before you enter any trade, imagine that you will have to explain this trade to a panel of your peers, by explaining to them the reason for your entry, your money, trade, and risk management guidelines, and why you exited the trade. Imagine having to explain why you chose this particular market and this particular time frame, along with how you set objectives for the trade, and how you determined where your initial protection would be. If you can truly do this, I strongly believe that you can be successful.

Just prior to entering every trade, try to imagine yourself executing the trade perfectly. Imagine how it will feel when you enjoy having made money with your trading.

Yes I know, you don’t have time to do that. Why? Because you never plan your trades ahead of time. You probably don’t have a strategy, and instead of waiting patiently for trade that meets your well-defined parameters and your thought-out plan, you just jump in the minute you think you see something that looks good.

You need to take a lesson from a spider. The spider waits patiently in his web until some unsuspecting insect flies into the spider’s trap.

Have you been flying into any of my traps? I wait for trades that meet my expectations, trades that fit my plan. I wait patiently, and being kind-hearted I don’t want any of my readers to land in my web. I’d rather the unsuspecting are readers of someone else’s newsletter. But it’s amazing how often I get to feed.”

Definition of Financial Journalist ,Restructuring ,Auditor

FINANCIAL JOURNALIST, n. Someone with deep and broad expertise in moving words around on a page or screen until they sound impressive regardless of whether they mean anything.
RESTRUCTURING, n.  The process by which a company that, only a few years before, had eagerly diversified into other businesses un-diversifies even more eagerly right back out of them. ANALYSTs and investors, who had earlier hailed the expansion as essential for growth, will now applaud the contraction as essential for survival.  The company’s management will earn big bonuses for adding to “SHAREHOLDER VALUE.”  A few thousand employees will lose their jobs, but that strikes the other participants as a small price to pay for restoring the company to its former state of health.

AUDITOR, n.  An accountant who all too often may approve a company’s financial statements exactly as the company’s management wishes them to be presented.

“It’s our job as auditors to do whatever we can ensure that a company’s financial statements conform with GAAP, but not to function as policemen or fraud detectors,” said Seymour Billings, a partner in the Chicago office of the accounting firm of Tinker Hyde Alter & Berry.
The word auditor, in Latin, means “one who hears.” In English, evidently, it means one who also obeys.