The Importance of Hard Work For Traders
Archives of “January 7, 2019” day
rssHere’s a granular breakout of airfare changes by the Economist
Ten ways to tell you might be sitting next to an economist
1. He refuses to listen to the safety announcement because “in the long run, we’re all dead”
2. He keeps telling you that “there is no such thing” as a “complimentary refreshment service”
3. He avoids prolonged conversation with you because he has a “rational expectation” that you’re an idiot since you chose the middle seat
4. But he offers to trade his aisle seat for yours in a competitive auction with the woman sitting behind you
5. He plonks his elbow on the arm rest because space has a “higher marginal utility” for him than for you
6. When he elbows you in the ribs, he says he is simply trying to “nudge” you into better behaviour
7. When he opens the overhead locker, a copy of Thomas Piketty’s “Capital in the 21st century” falls out and hits you on the head
8. But then he uses the book as a footrest
9. He only relaxes when the plane reaches 35,000 feet because then it’s in “general equilibrium”
10. Spends all the flight scribbling Greek letters into a notebook. Turns out it’s not a series of equations; he’s part of the IMF negotiating team en route to Athens.
11. Adds an extra point to a “top 10 list” because he believes in “quantitative reasoning”
Dr.Elizabeth Lombardo, Better Than Perfect-Book REVIEW
Perfectionism as it is usually understood can be a terrible curse, especially for a trader. It leads a person to act out of fear rather than passion—and sometimes not to act at all (why bother? I’ll botch it anyway). The perfectionist has both an “incessant drive to control the future” and “the unsatisfying feeling that, no matter how hard [he tries, he] will always come up short.” (p. 7)
In Better Than Perfect: 7 Strategies to Crush Your Inner Critic and Create a Life You Love (Seal Press, forthcoming September 23) Elizabeth Lombardo, a clinical psychologist and author of the national bestseller A Happy You, tackles the problems perfectionists create for themselves and suggests ways to overcome them.
For the most part Lombardo’s solutions involve reframing attitudes and motivations. Take the fear/passion dichotomy. “When you are fueled by fear, you focus on what you don’t want. Your goal is to do everything in your power to reduce the possibility of an undesired outcome. … Just by switching your perspective from one of fear to one of passion—working toward a desired outcome instead of avoiding an unwanted result—you can begin to feel more motivated, engaged, positive, and hopeful.” (p. 50)
Perfectionists are inclined to compare themselves to others and to judge themselves negatively. Of course, it’s not only perfectionists who do this; they are simply more intensely competitive. As Lombardo says, “Perfectionists don’t just want to ‘keep up with the Joneses,’ they want to kick the Joneses’ butts!” (p. 185) Well, that sounds more like trader talk; maybe a dose of perfectionism is actually a good thing, at least professionally. Lombardo admits that “many champion athletes, prominent scientists, and celebrities demonstrate perfectionist traits.” (p. 6)
The Art Of War(Trading)
Today i was watching a TV show on this well known Chinese Military strategist named Sun Tzu who dates back hundreds of years ago and i could not but help notice the incredible similarities between trading and WAR. So here’s a very unique post that you are only likely to see here at the ART OF TRADING. Please enjoy as it took me a few hours to put this together for you.
Who is Sun Tzu?
Sun Wu better known as Sun Tzu was an ancient Chinese military general, strategist and philosopher who is traditionally believed to have authored The Art of War, an influential ancient Chinese book on military strategy. Sun Tzu has had a significant impact on Chinese and Asian history and culture, both as an author of The Art of War and through legend. During the 19th and 20th centuries, Sun Tzu’s The Art of War grew in popularity and saw practical use in Western society, and his work has continued to influence both Asian and Western culture and politics.
Historians have questioned whether or not Sun Tzu was an authentic historical figure. Traditional accounts place him in the Spring and Autumn Period of China (722–481 BC) as a military general serving under King Helü of Wu, who lived c. 544—496 BC. Scholars accepting his historicity place his supposed writing The Art of War in the Warring States Period (476–221 BC), based on the descriptions of warfare in the text. Traditional accounts state that his descendant, Sun Bin, also wrote a treatise on military tactics, titled Sun Bin’s Art of War. (Both Sun Wu and Sun Bin were referred to as Sun Tzu in classical Chinese writings, and some historians thought that Sun Wu was in fact Sun Bin until Sun Bin’s own treatise was discovered in 1972.)
Here are some his quotes from his book ART OF WAR which were originally written on bamboo sticks: Also, underneath the quote is my interpretation of how i relate the quote to trading.
Invincibility lies in the defense; the possibility of victory in the attack.
Sun Tzu
<<< CASH IS KING: The best offense is defense: We all heard this one before but think about it in trading terms: when you are dealing with a market that is hard to navigate, many good traders will simply stand aside, move to cash and play ‘defense’. They will attack when the opportunities arise but overall know when a battle is worth fighting.
The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom.
Sun Tzu
<<< Once again, this goes hand in hand with managing losing trades, it’s okay to be wrong and walking away from a wrong trades with grace and poise is needed to long term survival in trading battles. No shame in taking losing trades: it’s part of the game we play: In every war that was won, there were battles that we lost. Needless to say that arrogance and large egos have NO PLACE in trading. Refusal to admit mistakes is when traders get themselves into deep waters. It’s okay to be wrong but it’s not ok to stay wrong. So it’s okay and signs of a very mature trader to retreat when the waters are dangerous or treacherous. NO EGO games in trading.
The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand.
Sun Tzu
<<< Good traders do their home work and research before tackling on the new market day. Having a watchlist or preset alerts that trigger when certain prices are achieved is the first thing that comes to mind here. Have a battle(game) plan ready and be ready to follow it with strict military precision. Entry, stops and position sizing should be all well calculated within the game plan. (more…)
Abraham Lincoln | Rules for Living . .
Timeline — from Thomas Edison to the unwinding of GE Capital
1890 — Four companies representing inventor Thomas Edison’s interests merge to form the Edison General Electric Company.
1932 — GE Credit Corporation begins to offer credit to customers to buy General Electric appliances.
1981 — Under chief executive Jack Welch, GE Capital begins a dramatic ascent. Between 1986 and 1993 profits double to $1.5bn and assets to $155bn. GE Capital becomes the world’s largest car-leasing company, the world’s largest ship container leasing company and the biggest private mortgage insurer.
2004 — GE Capital buys Dillard’s credit card unit for $1.25bn.
2008 — As the credit markets seize up, GE announces its first fall in quarterly profits for five years. In September, chief executive Jeff Immelt calls Henry Paulson, the then Treasury secretary, to say GE “was finding it very difficult to sell its commercial paper for any term longer than overnight”.
2011 — GE buys MetLife Bank, an online retail banking arm.
2013 — Mr Immelt sets a target that GE Capital should provide no more than 30 per cent of group earnings.
2014 — GE Capital has $7bn of net income, assets of $499bn and more than 35,000 employees. It operates in 40 countries. In the US, GE takes Synchrony Financial, its store credit card arm, public in a $2.88bn initial public offering.
2015 — Mr Immelt announces plans to sell the bulk of GE Capital over the next two years and return the company to its manufacturing roots.
How to Make a Quadrillion Dollars Shorting Stock
FEAR
Since I don’t have much to talk about, let’s mix in a little education in here. Today’s topic is on FEAR.
Fear, and it’s powerful ally – worry, ruin more ideas, intentions, business transactions, and the vitality and energy of more people in the world than any other single thing. The USA has become a nation of worriers. If you intend to build a strong, successful trading future for yourself, you must learn to eliminate unhealthy fear from your thought processes.
Besides the ruinous forces of fear, it can also be one of the greatest motivating forces in the world. Shakespeare said, “To fear the worst, oft cures the worst”, meaning that sometimes a good scare accomplishes more than good intentions.
Why do we learn? We get an education because we are afraid of being ignorant. I mean, come on, you don’t want to be following my trades forever, right? Most people obey the law because they fear punishment (Unless you’re Bernie Madoff). You take a shower and brush your teeth everyday, hopefully, because you have a healthy fear of disease. The point it, some types of fear have value. Fear forces you to think about things you might not otherwise worry about.
However, the negative kind of fear will cripple and debilitate you mentally and then destroy you and your dreams, if you let it.This unhealthy fear will inhibit you and prevent your progress towards success in whatever you do, in this case, trading. It holds you back, prevents you from ‘pulling the trigger’, restricts you from taking advantage of the ideas you create, and in the end, stops you from taking action, until it’s too late to act.
In essence, you become your own worst enemy. There is no one or nothing you can blame but yourself if you let fear take over your life. As yourself, “what are you afraid of”? Are you afraid of losing? Stopping out? Taking profits too early? Deviating from your system? Events outside of your control? What in the world can be so scary that it prevents you from winning in the trading game? (more…)
95% of Traders are Over Trading -Blue Channel Watchers -Believing in Fundamentals/Economy Growth -Will Do This (see Picture )
