Archives of “February 2019” month

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Embracing Risk

  
  Education
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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
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  • 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
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  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?

Some Suggestions for Traders

  
  Education
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Have you written down your trading rules? Do you have rules for entry and for exit with a profit and with a loss? Do you have a rule telling you whether a market is trending and what the trend is? Do you have rules stating when the market is in a trading range and what that range is? Do you have rules saying what markets you will trade and what has to happen to trade them?

Or do you simply shoot from the hip and call it artistry or intuition? Does this work for you?

Do you follow your rules rigidly without flexibility or discretion? Does this serve you over time?

Do you abandon your rules in the heat of trading, only to regret it? Do you stubbornly go against your rules thinking this time you know better? What would happen if you didn’t do this?

Some people don’t like rules. They don’t want to be told what to do even if it’s themselves telling themselves what to do. They even more don’t like following rules that came with a system for which they paid good (any or excessive) money. They have a polarity response to direction even after it becomes apparent that they’d be more profitable simply following the rules.

Others like to be told what to do, but somehow their rules are conflicting, obscure, or so bound up with discretion as to be meaningless. These traders may not even be aware that in essence they have no rules.

Whatever your situation turns out to be, it may be helpful to think in terms of commandments or suggestions. You may think in terms of absolute rules or simple guidelines.

Do you like clear directions as to what to do? In this case you can think in terms of commandments. For example, when The Ten Commandments says, “Thou shalt not kill,” it doesn’t leave much discretion. Reword your rules as commandments that are precise and clear and easy to follow.

Do you resist being dictated to and bossed around by outside forces? In this case, reformulate your rules as guidelines or suggestions. Give yourself some leeway in certain situations. Reword it so that when you read it, it sounds like a good idea and not a demand.

However, be certain in advance that whether you choose a suggestion or command, the results will be profitable if followed consistently or even most of the time. There’s nothing worse than a bad idea or a rule that doesn’t work. Remember the basics: Find out what works. Verify that it works. And do it.

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