Marcus Aurelius.
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rssRISK MANAGEMENT
1.Never enter a trade before you know where you will exit if proven wrong.
2. First find the right stop loss level that will show you that you’re wrong about a trade then set your positions size based on that price level.
3. Focus like a laser on how much capital can be lost on any trade first before you enter not on how much profit you could make.
4. Structure your trades through position sizing and stop losses so you never lose more than 1% of your trading capital on one losing trade.
5. Never expose your trading account to more than 5% total risk at any one time.
6. Understand the nature of volatility and adjust your position size for the increased risk with volatility spikes.
7. Never, ever, ever, add to a losing trade. Eventually that will destroy your trading account when you eventually fight the wrong trend.
8. All your trades should end in one of four ways: a small win, a big win, a small loss, or break even, but never a big loss. If you can get rid of big losses you have a great chance of eventually trading success.
9. Be incredibly stubborn in your risk management rules don’t give up an inch. Defense wins championships in sports and profits in trading.
10. Most of the time trailing stops are more profitable than profit targets. We need the big wins to pay for the losing trades. Trends tend to go farther than anyone anticipates.
Wanting change isn't enough. We must be the change we want to see in our world.
2 Books all traders should have in their library
Valid in 1912 & Still in 2017 too
Why Traders Fail ?Read These 20 points
1. Lack of motivation. A talent is irrelevant if a person is not motivated to use it. Motivation may be external (for example, social approval) or internal (satisfaction from a job well-done, for instance). External sources tend to be transient, while internal sources tend to produce more consistent performance.
2. Lack of impulse control. Habitual impulsiveness gets in the way of optimal performance. Some people do not bring their full intellectual resources to bear on a problem but go with the first solution that pops into their heads.
3. Lack of perseverance and perseveration. Some people give up too easily, while others are unable to stop even when the quest will clearly be fruitless.
4. Using the wrong abilities. People may not be using the right abilities for the tasks in which they are engaged.
5. Inability to translate thought into action. Some people seem buried in thought. They have good ideas but rarely seem able to do anything about them.
6. Lack of product orientation. Some people seem more concerned about the process than the result of activity.
7. Inability to complete tasks. For some people nothing ever draws to a close. Perhaps it’s fear of what they would do next or fear of becoming hopelessly enmeshed in detail.
8. Failure to initiate. Still others are unwilling or unable to initiate a project. It may be indecision or fear of commitment. (more…)
Floored
A world that’s more riot than profession, the trading floors of Chicago are a place where gambling your family’s mortgage is all in a day’s. At a time when markets are unhinged, FLOORED offers a unique window to this lesser-known world of finance. These men may not have degrees, but they’ve got guts, and penchant for excess that solicits simultaneous feelings of revulsion- and a desire to root them on. But like many aspects of our economy, technology is changing the way these traders do business, and these eccentric pit denizens aren’t the type to take kindly to new tricks. Computerized trading may take the emotion out of the job, but it may also take some of these old-timers out- dinosaurs in a young man’s game.
The most hazardous countries for business
The 26 most significant non-financial risks faced by international business have been analysed and rated to create a ranking of 175 countries by Maplecroft.
The Global Risks Index (GRI) measures a combination of strategic risks that are having an increasing impact on the global operations, supply chains and distribution networks of corporations.
These include: terrorism, conflict, macroeconomic risks, rule of law, resource security, vulnerability to climate change, natural disasters, human rights violations, poverty, and risks from pandemics and infectious diseases.
According to the GRI, 24 countries are at extreme risk, 17 of which are from Africa. Somalia (1), DR Congo (2), Zimbabwe (3) and Sudan (4) top the ranking, whilst Afghanistan (6), Nigeria (10), Iraq (12), Bangladesh (14), Pakistan (15) and Yemen (24) all feature amongst the poorest performing nations and are characterised by weak governance, internal conflicts and regional instability. Several of these countries, including DR Congo, Nigeria, Iraq and Pakistan, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.
High risk countries also critical to corporate supply chains include the Philippines (32), Indonesia (41) and India (42). Each of these countries poses specific challenges to business that require monitoring. India’s rating, for instance, reflects its poor human rights record, an increased risk of terrorism, high vulnerability to climate change impacts, a low capacity to contain disease, plus high levels of poverty, water and food insecurity.
China (79) and Brazil (96) are considered medium risk. They perform better than other emerging nations due to the strength of their economies, but still are associated with considerable risks; China in the areas of human rights, rule of law and water security, and Brazil for vulnerability to pandemics and CO2 emissions.
The GRI forms the centrepiece of Global Risks Atlas 2010, which includes 34 risk indices in all, accompanied by interactive maps for the easy identification of risk worldwide.
7 Trading Rules for Flash Traders
1. Keep adding to losing positions.
What the heck, price bound to turn soon. Martingale method sounds great. Consider adding on double to loosing trades. When price turns I’ll laughing all the way to the bank even I have to close my initial entries at loss.
2. Don’t use any stop-loss
Why bother with stop-loss. It’s for pussies anyways
3. Don’t waste time with money management
Thank you very much but I already know how to manage my own money. Why bother with money management nonsense.
I can use my time doing more trading and making money instead delving into all that mumbo-jumbo technical jargon.
4. Keep trading
I cannot afford to loose any opportunities. I need to be always in markets, day in day out. After all life is to short to waste golden opportunities. I cannot afford them passing by me.
5. I trust my great indicators
Why bother to learn to read charts and all that price action garbage while my sweet indicators are doing it for me. Leave the hard work to those suckers.
6. Buy the bottoms and sell the tops
I cannot understand why those people wasting their time trying to read charts. When price moves up significantly I sell, when price moves down I buy. Simple, buy low sell high as the saying goes.
7. Always check media and internet for good tips.
Let those suckers do the hard work again and I just use their work. After all all those experienced people in media cannot be far of from the truth as they have the insight knowledge.
3 Simple Techniques
Once you sort through all the trading jargon and strategies, making a good stock trade is much easier than people tend to make it. In other words, most people make stock trading harder than it needs to be.
After all, when trading we are generally dealing with thousands of dollars per holding, so it can be easy for traders to continually second guess and put pressure on themselves before finally pulling the trigger.
Below are 3 simple techniques that will having you making good stock trades more often than not.
- Create an entry point – Where is a good spot to buy the stock? Based on your strategy, this could be after a breakout, after a pullback, and so on. Once you choose an entry style stick to it and use it every time.
- Create a failure point – This is also know as creating stop losses. Basically determine the eject button before entering the stock. Based on your analysis, this should be the price where the trade is considered a bust when it falls below that price.
- Create a price target – It is easy to say a stock will go up, but when do you know when to sell? Are you necessarily tying up your capital in a stock that already saw its boost? By creating a price target before entering a stock, you better utilize your capital as you collect gains and move on to the next stock.
That’s it! Yes, it is really that simple, by determining these 3 critical points, the hardest part of stock trading should be deciding how to spend all that money you made.
Continue to tweak and perfect your criteria for determining these critical points, and eventually you’ll master a surefire trading system.