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6 One Liners For Traders

  
  Education
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  • Its psychologically comforting to construct a system that looks good in the past
  • Learn from your losses
  • Emotions do nothing for your trading
  • It’s just another trade out of the next 1000
  • System->Risk Management/Volatility Control->Trading Psychology
  • “You have to enjoy trading, because if trading is a source of negative emotions, you have probably already lost the game, even if you make money.”

Trading Quotes for Traders

  
  Education
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The tape tells the truth, but often there is a lie buried in the human interpretation
~~Jesse Livermore~~

 
 Your human nature prepares you to give up your independence under stress. when you put on a trade, you feel the desire to imitate others and overlook objective trading signals. This is why you need to develop and follow trading systems and money management rules. They represent your rational individual decisions, made before you enter a trade and become a crowd member.
~~A. Elder~~

 
 Charts not only tell what was, they tell what is; and a trend from was to is (projected linearly into the will be) contains better percentages than clumsy guessing
~~R. A. Levy~~ 

 
The biggest risk in trading is missing major opportunities, most of enormous gains on my accounts came from 5% of trades.
~~Richard Dennis~~

 
Take every gain without showing remorse about missed profits, because an eel may escape sooner than you think
~~Joseph de la Vega~~

 
Losing is part of trading. The best traders don’t get perturbed by losing trades, since over the long run they know they will be successful more often than not. When you are afraid of losing, you end up losing or missing opportunities because you are afraid to trade.
~~Trading to Win, Ari Kiev~~

 
In trading, the vast market consists of neophytes who are looking for magical answers to make lots of money quickly and with little risk. They want specific ideas. They want to be told exactly what to do. Those looking for such things will not find them. They will not be successful as long as they continue to favor the easy over the
truth.
~~Curtis Faith ~~ 

 
The difficulty in trading lies not in the concepts but in the application.
Curtis M. Faith

Trading should be effortless

  
  Education
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A true piece of wisdom. In my experience when I trade well it is like shooting fish in a barrel. Almost everything works. I don’t need to be overly patient with positions. The money comes in very fast. That’s exactly how trading should be. The exact opposite was the case during the first 2 months of this year. So I did what I had to do. I recognized the situation for what it was and admitted my efforts were not leading my portfolio anywhere. It was like folding when you are dealt a bad hand in poker. So I folded. Now I am waiting for the next hand. If it is a bad one I fold again. If a series of trades start to really go my way I push it hard and increase exposure and trade aggressively.

The Magical Number of Pi and Stock Markets

  
  Education
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There are some magical numbers and sequences of numbers that have their prints in the nature. They were there in the first place because God who created the whole universe encoded them just like His signature or autograph. Now, we might wonder, why is these magical numbers so important in our discovering of the secrets of the stock market trading and investing business? The simple and quick answer to that question is that these numbers resonate and vibrate in the stock markets, commodity markets and forex just as they are found in the universe that we live in. This is true for any financial markets. Before you discredit my claim of the magical number pi (π) and its application in making money in financial markets, take a good look of Fibonacci. This magical sequence of numbers of Fibonacci that starts from 1, 1, 2, 3, 5, 8, 13, 21, and etc, had been a very good technical indicator of when (time) and where (price) should the index futures reverses its trend. The number of pi (π) is so magical that its decimal portion is unique and there is no repetition of patterns. Just in case that some of you wonder what pi (π) is, it is a constant number where pi π = 3.1415926535897932384626433832795… The study of market cycles and market geometry uses pi (π) to pin-point the exact reversal date and price for stock markets and other financial markets. Here I present to you a video that sings out the magical number of pi (π).



Why 95% Traders Lose MONEY ?Just Read These 7 Points

  
  Education
  1 Comments

1)  The majority of traders think directionally, and they think linearly.  That has them trading momentum and that has them trading trends.  Even the traders who look for reversals look for momentum and trend, just in a different direction.
2)  Market behavior can be described as a combination of cyclical and linear (trend) components over any particular time frame.  As markets become more crowded, cyclical components dominate over time, reducing the Sharpe ratio of those markets.
3)  Traders fail because they are thinking in straight lines when they should be thinking in cycles.  They think of cycles as sources of choppiness and noise, not as sources of signals that are different from linear, trending ones.
4)  Any market cycle consists of mean-reverting behavior at cycle peaks and troughs and trending behavior between peaks and troughs.  This ensures that any single approach to trading markets (looking for trend/momentum; looking for reversal/mean reversion) will draw down substantially over many cycles.
5)  When the Earth was found to be round and not flat, that opened the door to exploration and development of new lands.  When markets are viewed as cyclical and not linear, that opens the door to promising trading strategies.
6)  A great deal of the emotional frustration and disruption of trading that traders encounter is the result of trying to fit markets into a preferred framework, rather than discovering the framework that best describes market behavior.  
7)  Becoming more disciplined in applying inappropriate models to markets leads to greater consistency in losing.  If a ladder is leaning against the wrong building, becoming a better climber won’t get you to your destination.

Mark Douglas makes some great statements

  
  Education
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In the book Trading In The Zone, Mark Douglas makes some great statements that I truly believe are important.  He states:

I AM A CONSISTENT WINNER BECAUSE:

  • I objectively identify my edges
  • I predefine the risk of every trade
  • I completely ACCEPT the risk or I am willing to let go of the trade
  • I act on my edges without reservation or hesitation
  • I pay myself as the market makes money available to me
  • I continually monitor my susceptibility for making errors
  • I understand the absolute necessity of these principles of consistent success and, therefor, I always follow them with confidence and joy.

What you’ll notice about his statements is that it is he is assuming that you have already done the first set of bullets up top; that you have already created a plan and you already have a set of RULES.  Now you might ask, how do I know if my set of rules now will work next month or next year? GREAT question. The market dates back all the way into the late 1700’s.  There is literally a few HUNDRED years of data.  That’s why I say that back testing is KEY.  Now that doesn’t mean that you need to back-test 200 years of data.  Not even close.  You want to back-test a reasonable time depending on your time-frame of trading.  For example, if I plan on trading based on a daily system, then I might back-test the last 5-6 years.  If I’m going to trade based on an intra-day 3 minute chart, I would probably backtest about a year.  There is no way to KNOW what is going to happen, but trading really boils down to probabilities.  Time and time again the same things tend to repeat themselves.  Why do you think the markets tend do to the same things over and over.  Why does it seem that certain stocks that are in the same class look the same from a chart perspective?  How come a company will report great quarterly results, but still go down? It’s because there is a greater number of traders that BELIEVE that this is where an equity is too much or too little.  Why do you think there are people who are talking about a “recession” right now?  Again, it’s because the same things seem to be occurring that did prior to a previous recession and people have that BELIEF.

So what does all this mean?  What can you gather from all this?  Well, a few things actually.  One is to make sure you create, find and organize a PLAN for trading.  Think about it as if you wanted to open up a company.  Do the research and find out how some of these traders got started and what they did.  Once you’ve done that, write down your plan and look at your questions from up top.  Once you can answer ALL of them, then you are moving toward being a consistently profitable trader.  Then take a look at what Mark Douglas wrote.  You have to own these statements mentally.  You have to truly believe that you are a consistent winner because of all of the statements above.

Remember, you are starting a business, and if you want your business to succeed, you need to have a PLAN!

“Plan your trade, and trade your plan” – Anonymous

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