Archives of “January 2019” month

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Trading Principles

  
  Education
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• In life, as in trading, the right mindset is crucial for success. You must be confident in your decisions because they are based on cause and effect, not on emotions or opinion. Negative people who are unsure of themselves are not successful in any field. You need faith in yourself and your methods to be able to persevere and not give up before reaching success.

• You can risk too much and lose it all in your business, life, marriage, friendships or family. You have to measure the potential cost of every action. One affair can cost you your marriage, just like one big trade with too much risk can cost you all your capital.

• In business there are certain methods which bring in customers and turn a profit, and others which cause a business to turn away customers and lose money. Trading is similar: methods which turn a consistent and long-term profit are essential for success.

• Having unrealistic expectations in a marriage, job, or business will lead to unhappiness and failure just like it will in trading. You have to set realistic expectations so
you do not get discouraged easily and quit in any of these areas. You have to be satisfied that the results are worth your effort over the long term. You need to understand what to expect before you begin a marriage, a job, a business, or trading.

• Those who succeed in all areas of life are the ones who can manage stress the best. The best way to manage stress is to increase what you can handle step by step so that you grow into new circumstances. Another way to manage stress is to avoid actions which get you into situations you are uncomfortable with.

Golf/Trading Quotes

  
  Education
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Yesterday night I was reading huge list of quotes about golf. After reading them I realized that if you substituted the word trading for every time the word golf appears in these quotes, that the same statements would hold true.

  • “Golf [Trading] is about how well you accept, respond to, and score with your misses much more so than it is a game of your perfect shots.” – Dr. Bob Rotella

  • “One of the most fascinating things about golf [trading] is how it reflects the cycle of life. No matter what you shoot – the next day you have to go back to the first tee and begin all over again and make yourself into something.” – Peter Jacobsen

  • “No-one will ever have golf [trading] under his thumb. No round ever will be so good it could not have been better. Perhaps this is why golf [trading] is the greatest of games.” – Bobby Jones

  • “Golf [Trading] is the closest game to the game we call life. You get bad breaks from good shots; you get good breaks from bad shots – but you have to play the ball where it lies.” – Bobby Jones

  • “Golf [Trading] is not a game of great shots. It’s a game of most accurate misses. The people who win make the smallest mistakes.” – Gene Littler

  • “Golf [Trading] is deceptively simple and endlessly complicated.” – Arnold Palmer

  • “The fundamental problem with golf [trading] is that every so often, no matter how lacking you may be in the essential virtues required of a steady player, the odds are that one day you will hit the ball straight, hard, and out of sight. This is the essential frustration of this excruciating sport. For when you’ve done it once, you make the fundamental error of asking yourself why you can’t do this all the time. The answer to this question is simple: the first time was a fluke.” – Colin Bowles

  • “Golf [Trading] is a difficult game, but it’s a little easier if you trust your instincts. It’s too hard a game to try to play like someone else.” – Nancy Lopez

  • “Golf [Trading] is 20 percent talent and 80 percent management.” – Ben Hogan (more…)

Minimize The Impact Of A Setback!

  
  Education
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SportFirst, 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.

The Essence of a Trading Process

  
  Education
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At the broadest level, trading consists of analyzing, synthesizing, and doing.

Analyzing is extracting information from markets, immersing ourselves in data.  It is our look through the microscope.

Synthesizing is assembling those data into a coherent picture, extracting pattern and meaning from the reams of market information.  It is our telescopic view.

Doing is taking action on the meaning we have extracted from studying markets.  It includes everything from determining the best expression of a view to managing risk and reward once the view has become a position.

In trading, the microscope and telescope of viewing are transformed into real world doing.

At the end of a trading day, week, or month, we repeat the process–only we turn the lens inward.

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