Archives of “January 21, 2019” day

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4 Rules from Great Traders

  
  Education
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Overcome Fear :Great  traders know that fear can choke our decision process and cause us to avoid taking risks.Fear also can paralyze you when you need to act quickly and decisively to save yourself from danger-the deer-in -the-headlights syndrome.All great traders have mastered their fears and are able to act decisively when needed.

Remain Flexible :As a trader ,you never know which stock or which market may make a move.This is the essence of uncertainty.Your don’t know what is going to happen.When you don’t know what is going to happen ,the best strategy is to be ready for anything.

Prepare to be wrong :If you don’t know what the future will bring and you choose a trade that assumes a particular outcome,you are possibly going to be wrong.Depending on the type of trade,in many cases it can even be more likely that you will lose money then that you will win money.What matters in the end is total money won and lost ,not whether you are right more ofthen then wrong.Great Traders are comfortable making decisions when they know they could be wrong .

Focus on decisions ,not out comes :One of the reasons that great raders can so easily reverse course is that they have a more sophisticated view of the meaning of error for decisions made under uncertainty.They understand that the face that things did not turn out the way they had hoped does not necessarily mean that taking the trade was a mistake.They know that many times good ideas dont’t work out.The very presence of uncertanity ensures that you will be wrong some of the time.All great traders put trades on for a particular reason ,and they take them off for a particular reason too.Great traders focus on the reasons for the trades instead of the outcomes for few given trades.

The Marathon Monks

  
Education, Life
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The Tendai monks believe that enlightenment can be achieved during your current life, but only through extreme self–denial.

For the Tendai, the ultimate act of self–denial — and the route to enlightenment — is a physical challenge known as the Kaihogyo. Because of this challenge, the Tendai are often called the “Marathon Monks.”

But the Kaihogyo is much more than a marathon.

 The Kaihogyo

The Kaihogyo is a 1,000 day challenge that takes place over seven years.

If a monk chooses to undertake this challenge, this is what awaits him…

During Year 1, the monk must run 30 km per day (about 18 miles) for 100 straight days.

During Year 2, the monk must again run 30 km per day for 100 straight days.

During Year 3, the monk must once more run 30 km per day for 100 straight days.

During Year 4, the monk must run 30 km per day. This time for 200 straight days.

During Year 5, the monk must again run 30 km per day for 200 straight days. After completing the fifth year of running, the monk must go 9 consecutive days without food, water, or rest. Two monks stand beside him at all times to ensure that he does not fall asleep.

During Year 6, the monk must run 60 km (about 37 miles) per day for 100 straight days.

During Year 7, the monk must run 84 km (about 52 miles) per day for 100 straight days. (52 miles per day!) And then, he must run 30 km per day for the final 100 days.

The sheer volume of running is incredible, of course, but there is one final challenge that makes The Kaihogyo unlike any other feat… (more…)

Book Review: Think, Act, and Invest Like Warren Buffett

  
  Education
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This is a tough book to review, because I generally respect the author, but there are many things I don’t like about the book.  Let’s start with the main one:

My friend Alice Schroeder came to speak to the Baltimore CFA Society early in November.  It was a great talk, and afterward, I took her back to the Amtrak station.  What was our main topic of conversation?  The many authors with limited or no dealings with Warren Buffett who invoke his name in order to get better sales.  I won’t name names.  I have relationships with a number of them.

I will review “The Snowball” soon.  Alice Schroeder spent around five years creating that lengthy book, and I can see why she would be upset over those that use Buffett for their own personal gain.

This book is another example of that.  Only chapters 1 and 2 have anything to do with Buffett, and there he is quoted extensively to the point where he should be listed as a secondary author, and get a cut of the royalties.  But in the next nine sections have almost nothing from Buffett; it is all the philosophy of Larry Swedroe. (more…)

Daily Trading Plan

  
  Education
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Risk: your loss limit in per trade and the total dollar loss per day. What you will do after x number of losses in a row. Your strategy for increasing and decreasing your trading size.

Goals: how many R’s you are trying to make today. How many trades do you plan to make. How long do you plan to hold winners and losers 

Reporting: your plan for writing a brief narrative of the day’s trading your plan to keep statistics of your trades (hold times, results, et cetera). How you will mark your trades on the same charts you use to trade. 

Contingencies: what phone number do you call to get out of trades should your system crash. Who can you contact to troubleshoot or repair your computer. Who do you call to get your Internet connection checked and fixed, if needed. 

With a well developed, clear plan you will be ahead of the majority of traders and, through this detailed planning, you can concentrate

20 Principles of Successful Traders

  
  Education
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They have the resilience to come back from early losses and account blow ups.

They focus on what really matters in trading success.

They have developed a trading method that fits their own personality.

They trade with an edge.

The harder they work at trading the luckier they get.

They do the homework to develop a methodology through researching ideas. (more…)

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