Archives of “February 2019” month

rss

Overtrading

  
  Education
#  #  #  #  #  #  #  #  #  #

Most new traders overtrade.

Overtrading is when you (hoping to receive the maximum possible profit) opens a huge position consisting of multiple lots.

Considering the typical market activity, it’s easy to lose half or even all your trading capital.

This problem is sometimes directly connected to insufficient trading capital.

But it’s more likely due to the trader lacking knowledge of money management principles, which means lack of competence to control their trading capital properly.

Your trading capital is used to earn money. You should treat each rupee is like a newborn baby.

Your first and foremost responsibility is to protect it. If you lose it, you have less to help you earn money.

40 Gems for Traders and Investors

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #
  1. There are only three kinds of investors – those who think they are geniuses, those who think they are idiots, and those who aren’t sure.
  2. One of the clearest signals that you are wrong about an investment is having the hunch that you are right about it.
  3. Investors who focus on price levels earn between five and ten times higher profits than those who pay attention to price changes.
  4. The only way to be more certain it’s true is to search harder for proof that it is false.
  5. Business value changes over time, not all the time. Stocks are like weather, altering almost continually and without warning; businesses are like the climate, changing much more gradually and predictably.
  6. When rewards are near, the brain hates to wait.
  7. The market isn’t always right, but it’s right more often than it is wrong.
  8. Often, when we are asked to judge how likely things are, we instead judge how alike they are.
  9. Most of what seem to be patterns in stock prices are just random variations.
  10. In a rising market, enough of your bad ideas will pay off so that you’ll never learn that you should have fewer ideas. (more…)

COMMANDMENTS For Traders

  
  Education
#  #  #  #  #  #  #  #

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? (more…)

Self-Knowledge Keys

  
Analysis, Education

1. Know what you want. Know who you are, not who you think you should be. Self-awareness gives you the power to pursue what really feeds your soul and the belief that you deserve it.
2. Know the cost of getting what you want. Realize the trade-offs of every choice. People often think if they are clever they can make choices without experiencing any downside. Any road you choose means there is a road you won’t experience.
3. Be willing to pay the cost. People often try to negotiate to win a choice without cost. Every choice involves a price; we get to decide what cost we want to pay.

Warren Buffett – The World's Greatest Money Maker-Video

  
Education, Video
#  #  #  #  #  #

If you invest in the stock market you’re almost 100% certain to have heard of Warren Buffett. Indeed, you’ve probably read books about him, or you might have read his annual shareholder letter, or even been to the spectacle that is the Berkshire Hathaway annual shareholders meeting.

Now’s your chance to watch an interesting documentary that offers an intimate look at the life of Warren Buffett. The documentary offers an eye opening view of how he runs the company (complete with a tour of his office), the annual shareholders meeting of Berkshire Hathaway, and a peak at his many eccentricities.

Of course the film also reviews how he made his money, how he operates, how he came to operate in the way he does, and how he thinks about his wealth which is in the tens of billions of dollars.

Go to top