Archives of “January 11, 2019” day

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Happy Fibonacci Day!

  
Analysis, Education
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All banks and markets remain open

Today is a big day for traders around the world!  It is Fibonacci Day!
Why is it Fibonacci Day?  Well if you are from a country that uses the MM/DD format, 11/23 are 4 digits in the Fibonacci Sequence.  A Fibonacci sequence is a series of numbers where a number is the sum of the two numbers before it. For example: 1, 1, 2, 3…is a Fibonacci sequence. Here, 2 is the sum of the two numbers before it (1+1). Similarly, 3 is the sum of the two numbers before it (1+2).
The next two digits in the Fibonacci sequence are 5 and 8 (2+3 = 5 and 3 + 5 = 8).  That means 11/23/58 (2058) will be the biggest of Fibonacci Day’s. It is never to early to start preparing a celebration.  
Let’s see, 2058 is in 43 years. That would make me 97 years young.  If I don’t make it, will someone please remember and be sure to give the day, the credit it deserves.  
Happy Fibonacci Day.  
PS. Arguably, the most famous media use of the Fibonacci Sequence was from the book and movie The Da Vinci Code starring Tom Hanks written by Dan Brown.  This is the scene where Hanks enters the Fibonacci Sequence as part of the clues left behind by Jacques Sauniere, the murdered curator. Sauniere raised his granddaughter, coaching her in endless puzzles. As an adult she became a cryptographer. When presented with the numbers in a scrambled form, she recognizes the sequence, and understands that it is part of a message. 

10 Points For Every Trader

  
  Education
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  1. You have no trading plan – you need to treat your trading like a business and plan how you’re going to trade. If you don’t have a trading plan, then google for it, there are loads of free resources out there to get you started.
  2. You have no money management rules – You can start with the 1% rule and work from there. Calculate your risk for each trade and ensure it’s 1% or less of your trading capital.
  3. You’re prone to emotional swings – If you feel tremendous excitement when you win a trade, then something’s wrong. Sure at first it’s exciting, but after a while your trading just becomes a process and the emotional aspects should start to fade.
  4. You’re nervous when in a trade – This is usually a result of trading too big for your account size. See point 2.
  5. You try to predict rather than react – Leave the predictions for the economists. For every trade have a thesis for how you’re going to respond for different scenarios. Think in terms of “if x then y” type statements instead.
  6. You revenge trade – The market doesn’t give a shit if you win or lose. Who are you having revenge on? This is more likely a result of you’re own unconscious desire to blow up your account and to go back to doing whatever it was before you played around in the markets.
  7. You don’t cut your losses fast enough – Don’t just wait for your trade to “bounce back”, man up and take the loss. You can always re-enter if you see a good setup. (more…)

The Crowd: A Study of the Popular Mind -5 Lessons from Gustave Le Bon’s

  
Analysis, Education
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Image result for the crowd study of the popular mind

Lesson #1: Crowds Make the Impossible Possible

The improbable does not exist for a crowd, and it is necessary to bear this circumstance well in mind to understand the facility with which are created and propagated the most improbable legends and stories.

Crowds, being incapable both of reflection and of reasoning, are devoid of the notion of improbability; and it is to be noted that in a general way it is the most improbable things that are the most striking.

Crowds being only capable of thinking in images are only to be impressed by images. It is only images that terrify or attract them and become motives of action.

Clarification: If crowds are incapable of distinguishing between the improbable and the probable, and the images it associates with the improbable invoke action, then odd things are designed to happen.

Lesson #2: Crowds Create Bulldozer-Like Momentum

…the individual forming part of a crowd acquires, solely from numerical considerations, a sentiment of invincible power which allows him to yield to instincts which, had he been alone, he would perforce have kept under restraint.

A crowd …is not prepared to admit that anything can come between its desire and the realisation of its desire.

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A to Z : Weaknesses and Strengths of Traders

  
Analysis, Education
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Ambitious

Makes and follows long term business plan

•Unambitious

Will ignore long term business plan

•Calm

Will handle times of market volatility and make smart decisions

•Worrying

Will panic when markets are volatile and make stupid decisions

•Cautious

Strictly follows Stop-Loss rules and Protects Trading Capital

•Rash

Will not be diligent with Stop losses and will risk trading capital

•Cheerful (more…)

10 Signs Your Trading Is Getting Better

  
  Education
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  1. Your losses are getting smaller and smaller.

  2. Your losing streaks are not as long as they use to be.
  3. Your draw downs are not as big as they use to be.
  4. You are very picky about entries and only take the ones with the best probabilities of success with good risk/reward skewed in your favor.
  5. You have become much more patient with holding winning trades and very impatient with holding losing trades. (more…)

7 Characteristics of Great Traders

  
  Education
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1. Education, education, education.

The old cliche touted by politicians when they can’t think of anything clever to say to their audience. The importance of education to success in trading cannot be placed on a high enough pedestal. You have to learn to earn, the best traders work obsessively to refine their edge further to stay ahead of the curve.

2. Adapt or Die.

Market conditions change and technology advances, thus the conditions for trading are always evolving, the rise in mechanical trading is testament to that. The very best traders through a process of education and adaptation are constantly staying ahead of the curve and creating ever new and ingenious methods to profit from the markets evolution.

3. Fail to plan, you plan to fail.

The best traders have a well documented plan; they know exactly what they are looking for and follow that plan to the letter. Their preparation for a trade starts long before the market open, it is this meticulous planning and importantly adherence to that plan that helps them avoid the biggest demons for any trader, over trading and revenge trading.

4. “Be like Machine”

As human beings emotions pay a key role in our existence, for a trader emotions can be a source of great pain. Trading psychology and the management of your emotions in a trade play a key role in overall success. Fear and greed can cut your winners short and let your losers run. Dealing with emotions follows on from your plan; the more robust your plan the less likely you are to fall into the emotional mine field. (more…)

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