One of the great challenges of trading is that it requires intense and singular concentration on markets, but also an equal focus on one’s performance in those markets. That combination of market awareness and self-awareness enables traders to make the most of their “edges” in markets while also cultivating fresh sources of edge.
It is interesting that very successful traders usually don’t achieve monetary success and then walk away from markets. That is because what drives them is not just the outcome, but also the process: the ongoing challenges of market mastery and self-mastery. Even after the money has been made, the game retains its appeal.
If your motivation is primarily to make money, you probably won’t get to the point of career success, because the inevitable periods of drawdown will sap whatever drive is present. When the motivation is mastery, losing periods provide fuel for reflection, learning, and improvement.
Archives of “January 27, 2019” day
rssNuggets from Jesse Livermore
Don’t trade until I see a pile of money sitting in the corner. Then, I go over and pick it up.
Remember, it [the market] is designed to fool most of the people most of the time.
A prudent speculator never argues with the tape.
Few people succeed in the market because they have no patience. They have a strong desire to get rich quickly.
The big money is made by the sittin’ and the waitin’ — not the thinking. Wait until all the factors are in your favor before making the trade.”
Optimising the Performance of the Human Mind: Steve Peters
Stop It
There’s an old joke about the investor who never used any stop losses. His friend knew his big positions were getting crushed.
Out of concern, the friend asked, “How are you sleeping?”
“Like a baby” he answered.
“Really? You aren’t nervous or upset?”
“I sleep like a baby” he repeated.
“That’s amazing. I’d never be able to sleep through the night with those types of losses.”
“Who said anything about sleeping through the night? I said I slept like a baby: I wake up every two hours, wet myself and cry for 30 minutes before falling back to sleep.”
That’s why risk management is so critical: to save you from sleeping like a baby, and in the long run to save you a lot of money.
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There’s a reason flight attendants show you where the emergency exits are before takeoff. The same thinking should apply to investors. Prudent investors have a sell strategy in place beforethey get involved with a stock. Using any of these stop strategies helps keep your emotions out of the process when an investing emergency arises.
Advice From A Tree
What is a Trader
What Is A Trader?
I ask the man.
He looks at me.
A trader is not a bystander, nor a mindless member.
Neither is he a selfless servant. No,
A trader is an ecosystem,
Evolving,
Refusing to be categorized or labeled,
Branded or defined.
Not one role,
Not one task,
Not a tool or production line,
Not one idea or small man. No,
A trader is an ecosystem,
Independent,
Challenging all else
To survive and thrive, evolve and change, or
Sink and die. Extinct.
A trader knows existing today is not tomorrow.
Buttons pushed, research tested, markets predicted.
A trader lives for certainty in self and tomorrow’s unknown.
Adapting to survive, evolving to advance, competing to learn.
A trader creates a pulse that connects and propels
An ecosystem he designed to challenge our own.
So the trader returns back to the question,
What am I and who are we?
Consistent, curious, and connected,
Accurate, authentic, and adaptable,
I strive to be.
I am an ecosystem within this unknown we.
Know Thyself,
He says to me.
2 Great Quotes on Politics (Happening in India Since 1947…Still Going on )
Analogy Between Markets and Gambling.
We attempt to apply Statistics to markets because we see an analogy between markets and gambling. You bet when the deck is rich; count the cards and you will know.
But what if the dealer of the markets:
1. Shuffles under the table or may not shuffle – you cannot know (without inside info)
2. Might be using more than one deck
3. Sometimes uses a deck which favors your opponents
4. Usually favors you but occasionally ruins you
5. Knows that you need the action and abuses this knowledge
6. Knows that you will exploit your knowledge of him to others, especially the weak, ignorant, and women
Analytical adjustments to the long-term debt to equity ratio – Bernstein
