- NEVER, EVER, EVER ADD TO A LOSING POSITION: EVER!: Adding to a losing position eventually leads to ruin, remembering Enron, Long Term Capital Management, Nick Leeson and myriad others.
- TRADE LIKE A MERCENARY SOLDIER: As traders/investors we are to fight on the winning side of the trade, not on the side of the trade we may believe to be economically correct. We are pragmatists first, foremost and always.
- MENTAL CAPITAL TRUMPS REAL CAPITAL: Capital comes in two forms… mental and real… and defending losing positions diminishes one’s finite and measurable real capital and one’s infinite and immeasurable mental capital accordingly and alway.
- WE ARE NOT IN THE BUSINESS OF BUYING LOW AND SELLING HIGH: We are in the business of buying high and selling higher, or of selling low and buying lower. Strength begets strength; weakness more weakness.
- IN BULL MARKETS ONE MUST TRY ALWAYS TO BE LONG OR NEUTRAL: The corollary, obviously, is that in bear markets one must try always to be short or neutral. There are exceptions, but they are very, very rare.
- “MARKETS CAN REMAIN ILLOGICAL FAR LONGER THAN YOU OR I CAN REMAIN SOLVENT:” So said Lord Keynes many years ago and he was… and is… right, for illogic does often reign, despite what the academics would have us believe.
- BUY THAT WHICH SHOWS THE GREATEST STRENGTH; SELL THAT WHICH SHOWS THE GREATEST WEAKNESS: Metaphorically, the wettest paper sacks break most easily and the strongest winds carry ships the farthest,fastest.
- THINK LIKE A FUNDAMENTALIST; TRADE LIKE A TECHNICIAN:Be bullish… or bearish… only when the technicals and the fundamentals, as you understand them, run in tandem.
- TRADING RUNS IN CYCLES; SOME GOOD, MOST BAD: In the “Good Times” even one’s errors are profitable; in the inevitable “Bad Times” even the most well researched trade shall goes awry. This is the nature of trading; accept it and move on. (more…)
Archives of “February 2019” month
rssYou only get one life…. don't let it pass you by
10 common mistakes most traders make
1. Stubbornly holding onto losses.
2, Buying on the way down in price.
3. wanting to make a quick and easy buck.
4. Buying on tips, rumors, split announcements, and other news events, stories, or opinions you hear from supposed market experts on TV.
5. Selecting second-rate stocks because of dividends or low P/E ratios.
6. Buying because of old names you’re familiar with.
7. Being afraid to buy stocks that are going into new high ground in price.
8. Cashing in small, easy-to-take profits while holding the losers.
9. Not being able to make up your mind when a decision needs to be made.
10. Concentrating your time on what to buy and once the buy decision is made, not understanding when or under what conditions the stock must be sold.
Cycle of Market Emotions
Economic Cycles and Investing
Trend Following Lessons from Jesse Livermore
Remember, you do not have to be in the market all the time.
Profits take care of themselves – losses never do.
The only time I really ever lost money was when I broke my own rules.
Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting. (more…)
Where Exactly We Are ? Optimism -Belief or ?
Documentary FLOORED -Video ( 3 Parts )
Stop being who you are and start being who you should be.
Ten Common Mistakes New Traders Are Making
They jump from trading strategy to trading strategy. New traders must find specific methodologies and systems and focus on trading them with discipline.
Position sizing is too big. New traders tend to trade so big that it engages their emotions to interfere with the trade and creates big losses that destroy their capital.
They don’t use stop losses. New traders tend to focus so much on entries and being right that they fail to have an exit plan if they are wrong and if they do they tend to not take the initial stop loss level and instead hope for a rebound.
- Not researching who they are versus how their system works. A trader can only trade a system that matches their risk tolerance and market beliefs.
- They like following others into trades. A trader can not copy others because they usually don’t know the time frame of the trade, the position size, or the stop loss level.
- They lack risk management. With out risk management new traders just give back all their profits during their next losing streak or blow up their account with a few big bad trades. (more…)