Archives of “January 17, 2019” day

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Thoughts of Market Wizard Gary Bielfeldt

  
  Education
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Discipline

I like to think of myself as very disciplined when it comes to sticking to my system. However, after my recent selling, I have started to question how disciplined I really am. I keep making changes to my system that I think are improvements, but is that just a lack of discipline to stick to the original plan? Also, just because I am more disciplined than most of the people I know doesn’t mean that I have enough discipline to trade successfully.”

Patience

Patience is probably my weakest of these five traits. For as long as I can remember I have never really been patient about anything. My trading is no different. I I have chased after extended stocks as well as bought too soon because I was afraid that the market was going to take off without me. I need to work on this more than anything else.

Courage

This is an area that I have improved in tremendously over the past 18 months. I have found that the combination of more knowledge and more experience have given me greatly increased confidence in my purchases. This has allowed me to feel more comfortable when I establish new positions. (more…)

How Stress Produces Trading Losses

  
  Education
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  • Nothing is stressful unless it is perceived as being a thread (losing money)
  •  Worry has a great effect on human performance, because it represents conscious mental activity.  Since it is conscious, it takes up processing capacity.
  • Often, the trader is too preoccupied with the potential results of what he id doing, rather than the process of being a trader.
    1. Losses scare me. The model calms me.  Trade your plan.
    2. Concerned about losses.  Preoccupation. Tunnel vision
    3. View losses as negative because fear of not having money.  A loss is a character building exercise that is needed to go through to obtain positive expectancy.
    4. Low Volatility/High Volatility  Multiple Intra-weekly signals
    5. Close at a profit/Close at stop
    6. Nightly distractions (Family, Businesses, Work, Vacation, Lack of Internet)
    7. Greed leads to confirmation bias, other bias in holding position
    8. Money motivated, need results for success, freedom for family
    9. Need to evaluate relationships with parents/money deeper to get to depths of self-esteem
    10. Tasks
      1. Daily Self-Analysis
      2. Daily Mental Rehearsal
      3. Focus and Intention
      4. Developing a Low-Risk Idea
      5. Stalking
      6. Action
      7. Monitoring
      8. Take Profits/Abort
      9. Daily Debriefing
      10. Be Grateful for What Went Right
      11. Periodic Review

Tomorrow's Setup For Trading

  
  Education

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Warren Buffett will earn your annual salary in the time it takes you to read this article

  
  Education
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There’s no doubt that Warren Buffett is ridiculously rich but if you made a few pips on the USD/JPY dip today and you’re feeling flush, then take a quick look at this tool that shows how much of a drop in the bucket your salary is compared to the $13.5 billion Uncle Warren made last year.

And if you’re admiring Messi’s magnificence today note that it took Buffett less than two days to earn Messi’s $64m paycheck last year.

Eternal Truths About Trading Success

  
  Education
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truthToday afternoon  once again  read  small book from the late 1800s written by Dickson G. Watts and reprinted by Traders Press. Entitled “Speculation as a Fine Art and Thoughts on Life”, the book begins with a description of the “qualities essential to the equipment of a speculator” (p. 8). Here is the author’s perspective, written well over a century ago:

* Self-Reliance – “A man must think for himself, must follow his own convictions…Self-trust is the foundation of successful effort.”

* Judgment – “…equipoise, that nice adjustment of the faculties one to the other…is an essential to the speculator.”

* Courage – “…confidence to act on the decisions of the mind…be bold, still be bold; always be bold.”

* Prudence – “The power of measuring the danger, together with a certain alertness and watchfulness, is very important.”

* Pliability – “The ability to change an opinion, the power of revision.” (more…)

General Guidelines from Richard Donchian ( Written in 1934 )

  
Analysis, Education
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Richard Donchian

  • Beware of acting immediately on a widespread public opinion. Even if correct, it will usually delay the move.
  • From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases.
  • Limit losses and ride profits, irrespective of all other rules.
  • Light commitments are advisable when market position is not certain. Clearly defined moves are signaled frequently enough to make life interesting and concentration on these moves will prevent unprofitable whip-sawing.
  • Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.
  • Judicious use of stop orders is a valuable aid to profitable trading. Stops may be used to protect profits, to limit losses, and from certain formations such as triangular foci to take positions. Stop orders are apt to be more valuable and less treacherous if used in proper relation to the chart formation.
  • In a market in which upswings are likely to equal or exceed downswings, heavier position should be taken for the upswings for percentage reasons a decline from 50 to 25 will net only 50 percent profit, whereas an advance from 25 to 50 will net 100 percent profit.
  • In taking a position, price orders are allowable. In closing a position, use market orders.
  • Buy strong-acting, strong-background commodities and sell weak ones, subject to all other rules.
  • Moves in which rails lead or participate strongly are usually more worth following than moves in which rails lag.
  • A study of the capitalization of a company, the degree of activity of an issue, and whether an issue is a lethargic truck horse or a spirited race horse is fully as important as a study of statistical reports.
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