Archives of “February 11, 2019” day
rssThe coin flip is not random? Rethinking your thinking-VIDEO
What is Speculation ? -Jesse Livermore
In The Markets :Less = More. Less positions, risk, decisions, hours at the screen and opinions of others = More Money
Bruce Kovner's :Wisdom Thought
Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.
Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis. I never think about other people who may be using the same stop, because the market shouldn’t go there if I am right.
Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose.
If you personalize losses, you can’t trade.
55 One Liners For Traders & 101 Trading Tips for Traders -Videos
Technically Speaking
A great reminder from technical analyst John Murphy:
“The statement ‘market action discounts everything’ forms what is probably the cornerstone of technical analysis. […] The technician believes that anything that can possibly affect the price–fundamentally, politically, psychologically, or otherwise–is actually reflected in the price of that market.”
Alfred Cowles adds:
“This evidence of structure in stock prices suggests alluring possibilities in the way of forecasting. In fact, many professional speculators, including in particular exponents of the so-called Dow Theory widely publicized by popular financial journals, have adopted systems based in the main on the principle that it is advantageous to swim with the tide.”
William Dunnigan adds:
“We think that forecasting should be thought of in the light of measuring the direction of todays trend and then turning to the Law of Inertia (momentum) for assurance that probabilities favor the continuation of that trend for an unknown period of time into the future. This is trend following, and it does not require us to don the garment of the mystic and look into the crystal balls of the future.”
Richard Donchian adds:
“When I first got into commodities, no one was interested in a diversified approach. There were cocoa men, cotton men, grain men they were worlds apart. I was almost the first one who decided to look at all commodities together. Nobody before had looked at the whole picture and had taken a diversified position with the idea of cutting losses short and going with a trend.” (more…)
15 Truths about Trading
1) 45-55% (Average winning % of any given trader)
2) Traders do not mind losing money, they mind losing money doing stupid things
3) You can lose money on a Great trade
4) Focus on the Trade, Not the Money
5) Trading is a game of Probabilities, not Perfection
6) Trade to make money, not to be right
7) Nicht Spielen Zum Spass (if it doesn’t make sense, don’t do it)
The market does not know how much you are up or down, so don’t trade that way (Think: “If I had no trade on right now, what would I do”)
9) Learn to endure the pain of your gains
10) There is no ideal trader personality type
11) Fear and Fear drive the markets, not fear and greed
12) Keep it simple: Up-Down-Sideways
13) Make sure the size of your bet matches the level conviction you have in it (No Edge, No Trade; Small Edge, Small Trade; Big Edge, Big Trade)
14) Making money is easy, keeping it is hard
15) H + W + P = E
a. (Hoping + Wishing + Praying = Exit the Trade!)
Where the Wealthy Are Putting Their Money?
The new “World Wealth Report” for 2015 was released last week fromCap Gemini and RBC Wealth Management. The focus is on the population of high net worth individuals, or HNWIs as the report calls them. The report, based on a survey of more than 5,100 wealthy people in 23 major markets, is packed with fascinating data and graphics.
You are probably familiar with some of the key themes and findings:
• Tremendous amounts of wealth have been accumulated during the past five years.
• Much of this wealth is concentrated in the top 1 percent; and a large share of that wealth is concentrated in the top 1 percent of the 1 percent.
• The very wealthy have a disproportionate impact on policy, investing and the economy.
No big surprises there. However, some of the specific data points were intriguing:
– The global HNWI population is 14.65 million, with total wealth of $56.4 trillion.
– The U.S. HNWI population is 4.68 million, with total wealth of $16.23 trillion.
– The U.S. as a region is ranked first for HNWI wealth and second for HNWI population, behind the Asia-Pacific region.
Here are a few other points worth considering:
Continues here: How Rich Are the Rich?
Trading Wisdom :-2500 year old
Sun Tzu, known for his treatise The Art of War, would have made an excellent trader. The principles he taught for proper military strategy are just as applicable today on the stock trading battlefield as they were 2500 years ago when originally penned. I have taken the liberty to translate a few of his principles for the modern day stock trading warrior.
1. Now the successful trader prepares before he enters battle. The unsuccessful trader makes but a few, if any, preparations before he enters battle. Proper preparation leads to victory; a little preparation leads to defeat; and no preparation leads to ultimate destruction! The one who is properly prepared is the one who is most likely to win.
2. In trading, let your great object be a quick and decisive victory, not the slow death of a lengthy loss.
3. If you know who the enemy is and you know yourself, you will never fear the next trade. If you know yourself but not the enemy, you will win one lose one. If you do not know the enemy or yourself, you will lose on each trade.
4. The quality of entry is like a well-timed swoop of a falcon which enables it to strike and destroy its victim.
5. Proper preparation may be likened to the bending of a crossbow; decision, to the releasing of the trigger.
6. Just as water retains no constant shape, so in trading know the market is constantly changing.
7. Ponder and deliberate before you enter a trade.
8. To refrain from entering a market that is prepared to defend its current course is the art of practicing patience by studying current market conditions.
9. He who does not think through his trade while making light of the situation is sure to fall victim to a loss.
10. Do not trade unless you see there is an advantage in doing so; use not your money unless there is something to be gained.
11. The successful trader is heedful and full of caution. This is the way to have peace of mind and to live to trade another day.
12. What enables the wise and successful traders to trade and conquer, and achieve things beyond the reach of ordinary traders, is proper preparation.
Think and Act !!
Technically Yours
Anirudh Sethi/Baroda