1. You Must Have a Game Plan
2. You Should Follow the Game Plan
3. Always Trade With a Stop Loss
4. Diversify Your Trades
5. Trade the Big Moves While Filtering Out the Small
6. Trade With the Overall Trend
7. Do Not Listen to the News; Only the Market
8. Don’t Listen to Your Broker.
9. Have Money Management Rules
10. Most Important: Have the Discipline to Follow the Rules
Archives of “Education” category
rssTen factors for developing proper trading awareness
1. FEAR
2. LISTEN TO THE MARKET
3. ACCEPT RESPONSIBILITY
4. GREED
5. FRUSTRATION
6. REGRET
7. CONFIDENCE
8. PROSPERITY CONSCIOUSNESS
9. SECURITY ILLUSION
10. WRITE IT DOWN
24x7x366 Days :Alway Keep it OPEN
Parabolic Moves Up:
These are stocks that jump 100%, 200% or more in a span of several days. The top of the pattern is marked by buying exhaustion and the best way to determine the exact top is to look out for the following candlestick patterns: doji, gravestone doji, long-legged doji, shooting stars, dark could covers, and bearish engulfings. All patterns are typically accompanied by the highest volume bar on the entire chart. Entering on the topping day may provide more profit, but it is riskier. The next day is considered the confirmation day in which the stock breaks down. The 2nd option for entry (less risk) is to enter at the very beginning of the breakdown.
Do You Need Trading Plan ?
Broker ad from Moody's Magazine, 1909: "Specialists in Standard Oil Stock".
6 Key Ideas For Traders
1). The typical trader who is struggling will look for outside information that completes the puzzle or “holy grail” of trading. Go and look at yourself in the mirror. This is the missing piece in the trading puzzle.
2). Mental rehearsal (of both positive and negative scenarios), positive imagery, inducing a relaxed state of mind, and developing daily rituals can help put you in the flow state of mind for trading.
3). The most important question a trader can ask: “Am I acting in my own best interest right now?”. Menaker explains why this question will help you define your risk and maximize your opportunities and trading results.
4). The very largest traders are focused primarily on risk management. Accepting and managing risk is a big part of trading. Some traders have difficulty following rules in this area. We should spend time learning about the mental biases humans have against suffering losses (see: Prospect Theory) and become aware of these showing up in our trading. Keep a trading journal to highlight awareness of these events.
5). “If I was forced to rank the importance of [various aspects] of trading, setups would be at the bottom of the list. Position sizing, risk management, and psychology are really what’s going to keep you out of trouble and ahead of the game. The best traders understand this and have internalized it.”.
6). You need to learn to do more of what works and less of what doesn’t. While it sounds obvious, many traders have difficulty with this as their unmanaged emotions are interfering with their perceptions and trading process.
THE STOCK TRADER’S TWO DEEP SEATED INSTINCTS
One of the stock market classics that should be on every speculator’s bookshelf is Edwin Lefevre’s Reminiscences of a Stock Operator. Written in 1923, you may assume its contents have scant application to the more sophisticated traders of today. That assumption could not be farther from the truth, for while technology may change and access to information may level the playing field in many respects, human nature hasn’t changed, especially when it comes to managing risk and the uncertainty associated with it.
While I could list many pertinent Lefevre quotes here, one that affects all of us in one way or another is the following.
We rarely talk about underfitting
ED Thorp on meeting Buffett in 1968: "I thought he would be the richest person in the US someday"
