Nothing revolutionary about it, but a lot of common sense.
Here’s the exercise with some of my personal observations added:
Pick ONE trading signal. It doesn’t matter, what signal exactly, but it’s important that it should be one you consider reliable and really intend to start your career as a consistently profitable trader with trading this signal (I will explain in some of further posts, why it is so important to start trading with minimal number of different signals). (more…)
The Bank of England and European Central Bank will deliver their latest monetary policy decisions on Thursday.
No change is expected from either, but it should still mean that sterling and the euro come, at least briefly, into sharper focus.
It’s the single currency that has been doing better of late, boosted by the ECB’s implicit bond backstop and subsequent easing of eurozone tensions.
In July, it cost less than 78p to buy one euro. Now it’s more than 81p. (more…)
Why do so many traders abandon their trading plan? Is it their personality, an inherent pitfall of the trading profession, or temporary insanity? A host of factors may contribute to a lack of discipline. Depending on your personality, background, training, and experience with the markets, you may have trouble reigning in your tendency to act on impulse.
For some people, impulsivity is in their nature. They have trouble focusing their attention. They are easily bored. Seeking out quick thrills relieves the tedium of life. For others, impulsivity is related to emotionality. Some people have so much trouble controlling their emotions that they react impulsively out of frustration. Minor setbacks are inevitable in the trading arena. When the extremely emotional trader encounters one of these setbacks, he or she becomes overly agitated, and may close a position early, or in a fit of confusion, make a major trading blunder that can only be remedied by closing the position.
That said, any trader can act impulsively at times. There are many situational factors that contribute to impulsivity. Research has shown, for example, that when people are tired, they have difficulty focusing their attention. As much as part of your conscious mind cares about sticking with your trading plan, your unconscious mind thinks, “Who cares? I want to take a break.” Psychological resources are limited. When you push yourself to the limits, you will have trouble focusing on your ongoing experience, concentrating on your trading plan, and sticking to it. (more…)
William O’Neill lays it down clearly and simply:
“Some people say, “I can’t sell that stock because I’d be taking a loss. If the stock is below the price you paid for it, selling doesn’t give you a loss; you already have it.”
If you don’t get this it’s probably best for all concerned that you stay away from the markets and if you must be involved give your money to someone who you trust understands this.
We once heard the late Yale prof., Stephen Ross, say that “if you stare at the clouds long enough, you can see pink elephants.”
We kind of feel that way, though not completely, about seeing patterns in stock charts.
