Archives of “February 5, 2019” day

rss

Why Do More People Just Not Say: Hypocrite

  
Analysis, Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

 

From Bloomberg Nov 4, 2011:

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) said third-quarter profit fell 24 percent as derivative bets declined in value.

From BBC March 4, 2003:

Mr. Buffett argues that such highly complex financial instruments [derivatives] are time bombs and “financial weapons of mass destruction” that could harm not only their buyers and sellers, but the whole economic system. Some derivatives contracts, Mr. Buffett says, appear to have been devised by “madmen”. In his letter Mr. Buffett compares the derivatives business to “hell…easy to enter and almost impossible to exit”…

He might be rich, but let’s face it: he is one manipulative character.

Perfectionism And Trading

  
  Education
#  #  #  #  #  #  #

 

Perfectionism: Many traders try very hard to always be right. If the market shows that they are wrong with a loss, they work very hard to turn that loss into a profit. They may average down on a losing position or just hold the stock after their stop price has been exceeded with the hope that the market will turn around and turn their loser into a winner. It is the pursuit of perfectionism that causes us to ignore that trading stocks is a matter of probability. Trying to always be right leads to failure, for eventually, one of those losers fails to turn around and gives the trader a portfolio crushing loss.

Embracing Risk

  
  Education
#  #  #  #  #

While we tend to focus solely on building our skill sets or expanding our knowledge, the greatest advancement and learning most often comes from action, experience, and taking risk. And our regrets in life reflect this. According to Gilbert, studies show that “in the long run, people of every age and in every walk of life seem to regret not having done things much more than they regret things they did.”

To improve at anything, we must at some point push ourselves outside our comfort zone.

Trading Wisdom

  
  Education
#  #  #  #  #  #  #  #

 

  • Being wrong is acceptable, but staying wrong is totally unacceptable. Being wrong isn’t a choice, but staying wrong is.
  • Understand that you will always make mistakes. The only way to prevent mistakes from turning into disasters is to accept losses while they are small and then move on
  • Concentrate on mastering one style that suits your personality. Most people just cannot weather the learning curve. As soon as it gets difficult, and their approach isn’t working up to their expectations, they begin to look for something else. As a result, they become slightly efficient in many areas without ever becoming very good in any single methodology.

Quotes from :The Logical Trader

  
  Education

thelogicaltrader1
 Recently, I just read a book authored by Mark B. Fisher, The Logical Trader. There are some good trading quotes that I like from that book. So, I think it may be good to share them here too.

 

 

Here are the trading quotes:

 

Have A Plan
In trading, as in life, you need a plan. This plan includes not only the micro – a strategy for each and every trade you make – but also the macro – meaning why you trade, how you intend to reach that goal (your means to the desired end), and what you’ll do as an alternative if that doesn’t work out. 
Know what you want to accomplish, how you intend to get there, and what you will do if it does – or does not – work out. Have a plan and stick with it. That works in trading, as well as in life. (more…)

10 Questions to ask Yourself Before Every Trade

  
  Education
#  #  #  #  #  #  #  #  #

  1. What is the overall direction the market is moving with in your time frame and the larger time frame?

  2. What time frame will you be trading with your next trade?
  3. What is your entry signal and what is its historical performance as a winning set up?
  4. How much money will you risk on this trade?
  5. How big will your position be for this trade?
  6. How will you know you are wrong and stop your loss?
  7. How much profit do you believe is possible if it moves in your favor?
  8. How will you know when it is time to exit with a profit?
  9. What is your ratio of reward versus risk?

  10. How many trades will you have on at any one time?

Go to top