Archives of “January 2019” month

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5 Trading Pitfalls and how to Solve Them

  
  Education
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Pitfalls
1. Focusing on the P & L

2. Losing objectivity while in a trade

3. Becoming emotional about a trade

4. Lacking confidence: exiting early, failing to put a trade on, not sizing up

5. Difficulty adapting to a changing market

Solutions
1. Quantify success base on the caliber of the trade (i.e. high quality entries/exits).

2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?”

3. While you are in a trade, ask yourself, if I had no position on right now, what would I do? Buy? Sell Short? Do nothing? Then re-evaluate your trade size and direction.

4. Confidence should always come from within. Step#1: Write bullet list of data points proving WHY you are a skilled trader. Step #2: Prime yourself each morning by reading it over to yourself. Could be the most valuable 30 seconds you spend each day.

5. Flip your perspective by keeping track of what is not working (by default this tells you what IS working).

Keep your eye on the ball and your head in the game!

Lessons From Dorsey Wright’s Thomas Dorsey

  
  Education
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“Investment philosophy is really about temperament, not raw intellect. In fact, proper temperament will beat high IQ all day.” – Michael Mauboussin

Last week the Wall Street Journal ran a profile of Thomas Dorsey, the president of Dorsey Wright & Associates, an investment firm that focuses on momentum and trend following strategies.

I had a few people send me this story asking for my thoughts.

Early in my career, when I thought I knew everything, it was easy to dismiss an investment philosophy that differed from my own because I thought I had it all figured out. (more…)

18 -Wisdom One Liners for Traders

  
  Education
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1. You will be tested mentally and emotionally this is not for the weak minded.

 2. Master Traders are detached emotionally from profit or loss. 

3. Boredom is the enemy of the master opportunist.

4. Haste is the enemy of great entry points.

5. Doubt is often followed by a lost opportunity.

6. The Trend will give you direction on your path.

 7. Having an exit strategy prevents unnecessary pain.

8. The laws of probability give strength to your fingers.

 9. Going against momentum brings forth the fools reward. 

10. Better the bad trade that is unrewarding. 

11. Habit is built on the principles of probability.


12. Know your exit point in the worst case scenario first.
13. The master trader is an escape artist.
14. When one knows the present they master the futures.

15. Set realistic goals and let the good times role.


16. A loss can be turned into a win when one is swift.
17. A master in day trading trades in an egoless state.

 18. Times of great probability are like diamonds falling from the sky.

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