Timespan Principle For Traders
Archives of “January 22, 2019” day
rssBlue Channel Analysts outside the TV studio waiting for their chance to provide an opinion
Just switch off the TV -During Trading hrs.Avoid these Idiots
Learn to Read Chart -Do Your Home work ,Have Trading Targets & Mint Money 24x7x366 Days.
Trading From Your Gut, by Curtis Faith
CHAPTER 1
The Power of the Gut
“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift.”
—Albert Einstein
George Soros, one of the greatest traders alive, trades from the gut. He has widely remarked on the correlation between his backaches and trading choices. In the autobiographical Soros on Soros, he wrote:
I rely a great deal on animal instincts. When I was actively running the fund, I suffered from backache. I used the onset of acute pain as a signal that there was something wrong in my portfolio. The backache didn’t tell me what was wrong—you know, lower back for short positions, left shoulder for currencies—but it did prompt me to look for something amiss when I might not have done so otherwise.
Some traders might scoff at the idea of making decisions based on “feelings” or intuition. They see the trader’s role as one who remains calm and collected, rationally choosing the right course while those around them are tossed about by their emotions. They believe that Soros is either lying or fooling himself. They don’t see how gut instinct can help. Yet many successful traders feel otherwise. Who is right? Is one approach better than the other?
If you are one of those traders who doesn’t believe that gut instinct or intuition has any place in trading, I invite you to keep an open mind. I, too, once felt as you did. After all, I was trained to take a very systematic and logical approach to trading as a Turtle. I believed that it was important to keep your emotions in check. I didn’t believe in trading from the gut.
Trading from your gut is a way of tapping into the extra power of the right hemisphere of the brain.
What I didn’t realize at the time, however, is that there is a big difference between trading emotionally and trading from your gut. Trading emotionally means reacting to fear and hope, which can destroy your trading decisions. Trading from your gut is different. It is a way of tapping into the extra power of the right hemisphere of the brain, which can be a powerful, effective, and entirely rational addition to any trader’s repertoire. (more…)
Time to Read :Trading Rules !
To me, it’s useful to re-read things like this sometimes, just to remind myself of the obvious. I hope you find them useful. (The last rule alone has saved me a lot of money over the years…)
Trade Management
- Let winners run. While momentum is in phase, the market can run much further than might be expected.
- Do not exit winners without reason!
- Be quick to admit when wrong and get flat.
- Sometimes a time stop is the right solution. If a position is entered, but the anticipated scenario does not develop then get out.
- Remember: if one thing isn’t happening the other thing probably is. Historically, this has never been good for me…
- Be careful of correlations. Several positions can often equal one large position bearing unacceptable risk. Please think.
Other thoughts
- I am responsible for risk management, money management, trade management, doing the analytical work and putting on every trade that comes.
- I am not responsible for the outcome of any one trade. Markets are highly random. I do not have a crystal ball. I am not as smart as I think I am.
- Risk management is the first and last responsibility. I can [mess]anything else up and be ok as long as I do not violate my risk management parameters.
- Opportunity comes every day. Do not neglect the work. Must do analysis every day.
- Opportunity comes every day. Get out of [crappy] positions. Move on.
- I am a better countertrend trader than a trend trader. Sometimes the crowd is right, and they will run me over at those times if I’m not quick to admit I’m wrong.
- If you’re going to do something stupid, at least do it on smaller size.
SIX Ways to Improve Your Self-Discipline Today
1. Acknowledge Your Weaknesses – Whether cookies are the downfall to your diet, or you can’t resist checking your social media accounts every two minutes, acknowledge your pitfalls. Too often people either try to pretend their weaknesses don’t exist or they try to minimize the negative impact their bad habits have on their lives. For example, many smokers think, “I could quit if I wanted to,” because they don’t want to admit they’re hooked.
2. Establish a Clear Plan – No one wakes up one day suddenly blessed with self-discipline. Instead, you need a strategy. Whether you want to increase good habits like exercising more often, or you want to eliminate bad habits like watching too much TV, develop a plan that outlines the action steps you’re going to take to reach your goals.
3. Remove the Temptations When Necessary – Although we’d all like to believe we have enough willpower to resist even the most alluring enticement, it only takes one moment of weakness to convince ourselves to cave to temptation. Making it difficult to access those temptations can be pivotal to increasing self-discipline. If your weakness is Facebook, turn off the internet while you’re working. If you can’t resist overspending when you go to the mall, leave the credit card at home and only take a small amount of cash.
4. Practice Tolerating Emotional Discomfort – It’s normal to want to avoid pain and discomfort, but trying to eliminate all discomfort will only reinforce to yourself that you can’t handle distress. We can usually stand a lot more discomfort than we think we can. Practice allowing yourself to experience uncomfortable emotions like boredom, frustration, sadness, or loneliness and increase your tolerance to the negative emotions that you may experience as you increase your self-discipline. (more…)
Change Blindness (Video )
Psychologists who study the fascinating phenomenon of change blindness know that merely looking at something is not the same as actively paying attention to it. As the demonstration in this video shows, people can be blind to significant changes in a visual scene that are obvious to someone who expects that these changes are going to happen
Minimize The Impact Of A Setback!
First, minimize its symbolic importance. Many people over interpret setbacks by imbuing them with more emotions than are warranted. They view setbacks as a form of punishment, as if a teacher or parent is punishing them for doing something wrong. Take the setback in stride and move on to the next winning trade.
Second, don’t confuse trading outcomes with personal significance. If you lose big, for example, the loss may have great financial significance but it doesn’t need to have great personal significance. You can wipe out your entire account, but that doesn’t mean you are diminished in the eyes of friends and family. You don’t need to let a loss or setback make you feel less worthy as a person.
Ironically, when you psychologically minimize the impact of a setback, and treat it as if it isn’t important, you’ll stay calm, free, and objective. And when you feel this way, you’ll trade profitably.
Risk/Reward Ratios are a big deal to in determining your needed winning percentage.
12 Cognitive Biases that Prevent you From Being Rational
Confirmation Bias – The tendency for people to favor information that confirms their beliefs or ideas. Investors and economists often fail to fully appreciate other views due to a narrow minded view of the world often resulting from what they think they already know.
Ingroup bias – the tendency to favor one’s own group. In investing and economics we see this in ideologies and particular strategies. Austrians favor those who believe their own thinking. Chartists dislike value investors. Often times, the strongest economists and investors are the ones who are able to move beyond this ingroup bias and explore the potential that other groups have something positive to contribute.
Gambler’s Fallacy – When an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. We see this in trading all the time. This is the belief that just because something has occurred in the past that it is more likely to occur in the future. The “trend is your friend” and that sort of thing….
Post-Purchase Rationalization – When one rationalizes past purchases after the fact in an attempt to justify past actions. Investors often learn about how a bad trade turns into an investment when they rationalize their past purchases. If you’ve been in the business for a while you know how destructive this can be. (more…)
Blind and Calculated Risk
An excerpt from Trend Commandments:
There are two kinds of risk: blind and calculated. The first one, blind risk, is always suspect. Blind risk is the calling card of laziness: the irrational hope, something for nothing, the cold twist of fate, winning the lottery, etc. Blind risk is the pointless gamble, the emotional decision, or the sucker play. The man who embraces blind risk never wins in the long run. However, calculated risk can build fortunes, nations, and empires. Calculated risk and bold vision go hand in hand. To see the possibilities, work things out logically, and to move forward in strength and confidence is how you win. Calculated risk lies at the heart of every great achievement and achiever since the dawn of time. Trend followers thrive on taking calculated risks. Like the original Karate Kid movie: Wax on, wax off. Risk on, risk off.