The more you know the more you grow
Archives of “January 13, 2019” day
rss3 Quotes For Traders
Successful traders are always students of markets, always learning, and always adapting. They have periods of feast and famine, and they learn to keep themselves afloat during the lean times so that they can participate when things get better. In that context, learning when to not trade is a crucial component of trading success.
One of the most common mistakes traders make is that they address performance problems by thinking harder. Like the insomniac who stays awake longer and longer thinking about trying to get to sleep, the trader who analyzes and worries about performance loses that “zone” in which probability distributions present themselves implicitly.
People make money in markets two ways: by investing and by trading. Investing means generating a big picture view and riding out short term noise en route to seeing that view materialize. Investors are top-down thinkers: they’re analytical and their skill lies in putting pieces of research together to form a picture that others haven’t yet seen. Traders are bottom-up thinkers: they recognize patterns as they form and act on them quickly. Where the investor thinks deeply about opportunity over time, the trader thinks broadly about what’s happening in markets at a given time
When things look bad, and the UK's future looks like Greece with bad weather, a sense of humour is an essential
Best is :Vote For Nobody
The real path to trading success
MRI’s of Succesful Traders
I’ve seen this study making the rounds on several websites now as a type of neuroeconomic confirmation of Buffetological principles…
Perhaps procedure might be slightly useful as a means of seeing physical brain improvement by training– such as that found through meditative practices.
“Traders who buy more aggressively based on NAcc signals earn less. High-earning traders have early warning signals in the anterior insular cortex before prices reach a peak, and sell coincidently with that signal, precipitating the crash. These experiments could help understand other cases in which human groups badly miscompute the value of actions or events.”
“Neuroeconomists Confirm Warren Buffet’s Wisdom”:
“Seeing what’s going on in people’s brains when they are trading suggests that Buffett was right on target,” says Colin Camerer, the Robert Kirby Professor of Behavioral Economics at Caltech.
That is because in their experimental markets, Camerer and his colleagues found two distinct types of activity in the brains of participants—one that made a small fraction of participants nervous and prompted them to sell their experimental shares even as prices were on the rise, and another that was much more common and made traders behave in a greedy way, buying aggressively during the bubble and even after the peak. The lucky few who received the early warning signal got out of the market early, ultimately causing the bubble to burst, and earned the most money. The others displayed what former Federal Reserve chairman Alan Greenspan called “irrational exuberance” and lost their proverbial shirts.
Discipline
If you don’t see anything, you don’t initiate a new position. You take risk only when you see an opportunity. Make it a habit to ask yourself for each trading or investing decision – do you have an edge or do you just hope to be right. Hope is not a strategy.
Love the game
Is this Tweet still there or deleted?
Ways to Recognise and Defeat Your Evil Trader
- Have a plan. If you don’t have a plan, your Evil Trader has zero boundaries and will take over entirely. When you have a plan, you’ll start to notice him telling you not to follow it. You’ll hear him whisper seductive anti-plan ideas that sound and look perfectly reasonable – except they aren’t in the plan.
- Have an Evil Trader Journal. The thing with ET is that often his ideas sound great and are really hard to ignore. So as not to discard potentially good ideas, keep a log and after each trade is closed make a note of whether the idea would have been positive or detrimental to the outcome of your trade. After a period of listing these ideas you’ll be able to notice that a) ET is wrong and he needs to shut it, or b) his idea deserves some further testing as it’s possible it has merit.
- Try to make your method as water-tight as possible. A signal needs to be a signal without a shadow of a doubt. An exit needs to be a definite exit, no two ways about it. The more black and white the better, as your Evil Trader loves to second guess your judgement. Planting seeds of doubt is just the way he rolls.
- Make a check-list for those times when you’re just not sure. There will always be times when things just don’t seem so clear-cut. This is your evil trader’s very favourite moment to strike. You need to be armed with your weapons of ET destruction – aka, your check-list – to guide you through. Having a checklist on hand allows you to objectively determine whether what you think you’re seeing is in fact what the market is presenting.