20 Trading Rules for your weekend

1.        KNOW THYSELF
What kind of trading style fits your personality…Trend following? Day Trading? Buy and hold (please NO)? Next, what do you want to accomplish with your trading…Monthly Income? Long-Term Growth? Risk Aversion? And finally, you must have a grip on your emotions, because you will experience failure and success in trading and you need to know how you will react to both.
2.        KEEP IT SIMPLE
You should be able to describe each trading strategy in your war chest on a 3×5 index card.  There are so many different trading tools and indicators out there that it is easy to make trading and investing harder than it is. Find a few technical and/or fundamental indicators that you can apply to your trading, and master them.
3.        DIVERSIFY 
Specialize in a few different trading strategies and then spread your risk out across multiple asset classes using those trading strategies. Make sure all of your trades are not dependent on the same sector, commodity, industry, or idea. 
Only losers add to losing positions. If a trade is going against you, move on and find another trade. It’s not about pride, it’s about profits.
 You must constantly make an investment in your trading education. Read books, go to seminars, or talk to other traders, because over time the traders that make a commitment to never stop learning will be the traders that stay in the game and are able to adjust their trading style to any market environment.   
Having a trading plan creates discipline. Why are you making this trade? What’s your risk? What’s your reward? How much margin is required? What will you do if things get bad, or really good? These are questions you should be able to answer on every trade you execute.   
I don’t care who you are, you are going to have bad trades. When you have a bad trade, take a break from trading, go to a movie, or kick the dog (once), but don’t sit around and pout.   It’s important that you move on and start planning how you are going to get it back. 
Trust your research, feel confident in the time and energy you have put into your trading strategy and know that no matter what the market does in the short term, you have the ability to make money in the long term. 
9.        THE MARKET IS GOING…????
Nobody knows where the market is going and you don’t either.    So pick trading strategies that allow a little wiggle room in case you wake up one morning and the market doesn’t do exactly what you told it to. (See trade schools)
 This word sums up a long term trader. You must have the discipline to follow your systems and manage your emotions hour after hour, day after day, year after year. If you are undisciplined in other areas of your life, don’t be surprised if one day you break your trading rules. You must practice discipline 24 hours a day.  (more…)

Self-Control and Discipline

Cultivating discipline and self-control is vital for consistent and profitable trading. You implement proven trading strategies, over and over, so that across a series of trades, the strategies work enough to produce an overall profit. It’s like making shot after shot on the basketball court so as to accumulate a winning number of points. The more shots you take, the more likely you will amass points. But the winning player is the person who first develops the skill to make the shot consistently, so that at every possible opportunity, the ball is likely to go through the basket. To a great extent, consistency is the key. If the player uses one approach one time and a different approach at another time, performance is haphazard. 
It’s the same for trading. One must trade consistently, following a specific trading plan on each and every single trade. This allows the law of averages to work in your favor, so that across the series of trades, you will make an overall profit. If you follow the plan sometimes and abandon it at other times, you throw off the probabilities. Suppose you used a strategy that had a track record of 80%. Under the best-case scenario, you could only expect to win 80% of the time. But since history doesn’t always repeat itself, it’s likely that you will win less than 80% of the time. If you don’t execute the trading strategy the same way each time, you will decrease your winning odds. And fewer winning trades may mean an overall loss. That’s why discipline and self-control are so important.  (more…)

Gold 75% Underowned In 20 Years, Or Exter's Pyramid For Gen X/Y

Kedrosky has posted an informative chart from JPM’s Michael Cembalest indicating that ownership of gold in dilutable terms (aka dollars), as a portion of global financial assets has declined from17% in 1982 to just 4% in 2009. And even thought the price of gold has double in the time period, as has the amount of investible gold, the massive expansion in all other dollar-denominated assets has drowned out the true worth of gold. Were gold to have kept a constant proportion-to-financial asset ratio over the years, the price of gold would have to be well over $5,000/ounce.

Of course, the chart above pales in comparison with the true Exter pyramid, which incorporates all those wonderful JPM/Goldman inventions known as derivatives, amounting to $1.8 quadrillion, which certainly did not exist in 1982. If one were to factor the above table  to include this Exter securitized credit money as well, then the true constant worth of gold would be well north of $10,000.

51 Phrases Everyday You Listen on Blue Channels (All Useless )

  1. What the market doesn’t understand is…
  2. As you know…
  3. Inflection point
  4. There is a fundamental misunderstanding…
  5. “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
  6. The mother of all ____
  7. Price discovery
  8. Euphoria
  9. Party Like It’s ____
  10. The smart money
  11. Punishing savers
  12. It’s safe to assume…
  13. Next leg higher (lower)
  14. To be clear
  15. the greenback
  16. Hyperbolic
  17. Window-dressing
  18. Retracement
  19. Sucker’s rally
  20. Running on fumes
  21. Dr. Copper
  22. In yen terms
  23. Extreme readings
  24. Holding the bag
  25. Simultaneously calling for a crash and a melt-up
  26. Fiat currency
  27. Asset price inflation
  28. Rigged
  29. Detached from reality
  30. Manipulation
  31. I’m just early
  32. Idiosyncratic risk
  33. “Spoos”
  34. Unless this time is different…
  35. “Flashing”
  36. Day of reckoning
  37. Pivot
  38. Bullish or bearish “of” instead of “on”
  39. Economy
  40. Growth of India
  41. Long Term story
  42. Invest for Long Term for 2-3-4-5 years
  43. US FDA story
  44. IT Story intact
  45. IT Margins
  46. Constant currency
  47. FIIs Bullish
  48. Mutual Funds always Bullish
  49. Don’t PANIC
  50. Don’t sell
  51. NEW High soon (Hearing since 2016 )

And of course, if we missed any good ones..just send us mail

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