Archives of “February 15, 2019” day

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30 Trading Rules

  
  Education
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1. Buying a weak stock is like betting on a slow horse. It is retarded.
2. Stocks are only cheap if they are going higher after you buy them.
3. Never trust a person more than the market. People lie, the market does not.
4. Controlling losers is a must; let your winners run out of control.
5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
7. Emotional traders want to give the disciplined their money.
8. Trends have counter trends to shake the weak hands out of the market.
9. The market is usually efficient and can not be beat. Exploit inefficiencies.
10. To beat the market, you must have an edge.
11. Being wrong is a necessary part of trading profitably. Admit when you are wrong.
12. If you do what everyone is doing you will be average, so goes the definition.
13. Information is only valuable if no one knows about it.
14. Lower your risk till you sleep like a baby.
15. There is always a reason why stocks go up or down, we usually only learn the reason when it is too late.
16. Trades that make a lot of intellectual sense are likely to be losers.
17. You do not have to be right more than you are wrong to make money in the market.
18. Don’t worry about the trades that you miss, there will always be another.
19. Fear is more powerful than greed and so down trends are sharper than up trends.
20. Analyze the people, not the stock.
21. Trading is a dictators game; you can not trade by committee.
22. The best traders are the ones who do not care about the money.
23. Do not think you are smarter than the market, you are not.
24. For most traders, profits are short term loans from the market.
25. The stock market can not be predicted, we can only play the probabilities.
26. The farther price is from a linear trend, the more likely it is to correct.
27. Learn from your losses, you paid for them.
28. The market is cruel, it gives the test first and the lesson afterward.
29. Trading is simple but it is not easy.
30. The easiest time to make money is when there is a trend.

Gems of Jesse Livermore

  
  Education
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The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.

I don’t know whether I make myself plain, but I never lose my temper over the stock market. I never argue with the tape. Getting sore at the market doesn’t get you anywhere.

ULTIMATE REVENGE: one day after man's divorce, he wins lottery.

  
Education, Life
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A BRITISH bus driver netted more than £2 million ($3.3 million) on the lottery a day after his divorce came through, The Sun reports.

Kevin Halstead, 50, went out for a drink with friends after his decree absolute arrived in the post last Friday.

He bought a lottery ticket the next day – and was gobsmacked when his lucky numbers came up later that evening, The Sun reports.

Kevin could have been forced to hand half the £2,302,668 to ex-wife Helen if the divorce had taken just a few days longer. (more…)

John F. Ehlers :Cycle Analytics for Traders (Book Review )

  
  Education

CYCLE ANALYTICSJohn F. Ehlers is probably best known for his MESA (maximum entropy spectral analysis) technical indicators, developed over thirty years ago. He has continued his research in this field and brings traders up to date with his latest book, Cycle Analytics for Traders: Advanced Technical Trading Concepts (Wiley, 2013).

Two types of traders should read this book: those who want to know why things work and those who are looking for new and improved indicators. Since I belong to the former category, I’ll quickly dispense with what probably interests most technical traders—indicators. The book comes with a PIN code to access and copy the EasyLanguage computer code found in the book, some of which is quite lengthy and would be exceedingly tedious to retype. Among the indicators whose code is provided are the decycler, decycler oscillator, band-pass filter, Hurst coefficient, roofing filter, modified (and adaptive) stochastic, modified (and adaptive) RSI, autocorrelation, autocorrelation periodogram, spectral estimate, even better sinewave indicator, convolution, and Hilbert transformer. There is code to compute the dominant cycle using the dual differentiator method, the phase accumulation method, and the homodyne method. There are also indicators for SwamiCharts. (If you don’t know what SwamiCharts are, a quick Google search will fill you in.)

As for the why. Ehlers is careful to explain the principles and the math behind these indicators. But he does more. He reflects on the very nature of the markets themselves. I was particularly struck by his thoughts on the drunkard’s walk hypothesis.

(more…)

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