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rssAre you losing more or failing more?
Losing and failure are not the same thing. No matter the outcome of the trade, I am guaranteed two things: I am paying commission and assuming my head is not up my ass, I learned something about myself, the market, and the relationship between the two. Fortunately, losing is a part of trading. Yes I said fortunately, if everyone won the best could never be rewarded. Failing on the other hand is not necessary. What is the difference between failing and losing?
Having less capital because of something I know. FAILURE
Having less capital because of something I should know. LOSS that can turn to FAILURE
Have less capital because of something I do not know. LOSS
15 Common Sense Rules For Traders
Common sense can be brutally honest sometimes. As traders we get so focused on the little inconsequential detaisl sometimes that we miss the world around us. I have had this discussion with too many people over the last two months that told me they were bearish on the market and were taking a beating on the “high probability” that the market would reverse. Who sets those odds by the way? Are trends more likely to reverse than persist? If so, why the hell are we studying technical analysis?
Take a look over these trading rules I stumbled across last year and see if there are any realities that surface from them. Each time I look these over it reminds me of the realities of what we do here.
1. No matter what you read about trading, until you use an approach and test it with your money on the line you will never learn how to trade. Paper Trading is NOT Trading!
2. If it were really possible to “Buy Low Sell High” or “Cut your Losses and Let your Winners Run”, then almost everyone would be making money rather than losing it.
3. Remember that there is ALWAYS someone on the other side of your trade who is using a trading technique exactly the opposite of yours who hopes to make money with his system.
4. If 90% of all traders lose money, they must be following generally accepted trading rules. The 10% who win do not!
5. You trade your beliefs and your beliefs about your system. If you have a problem with yourself, fix yourself first.
6. Impatience, Fear and Greed will make you poor. Any need to trade is rooted in greed and impatience.
7. If you really understand the markets then YOU KNOW that there is the same opportunity on every time frame, in every market, every single day.
8. Waiting for the perfect trade is “chickening out”, and caused by your lack of faith in yourself or your system.
9. Any hardwired, automated trading system sold that truly works 70 or 80 or 90 percent of the time in every market would be worth hundreds of millions of dollars and would not be for sale at any price. (more…)
Too hot for Citigroup chick speaks out
Visit msnbc.com for breaking news, world news, and news about the economy
5 Reasons : 95% Traders are Losing Money. (Number 1 & 2 Major Culprits )
There are many more reasons…………….Those who trade looking at Screen (Don’t know Parde ke picha ka scene )
Bernard Baruch on Information Overload and Inside Information
Legendary speculator Bernard Baruch discusses trading on inside information, stock tips, and the problems of information overload back in 1957 (excerpt from Bernard Baruch – My Own Story).
Trading Hints and Tips
1. OPPORTUNITY. There are dozens of these every day, unfortunately you can’t buy them all, so only pick the top 10 and then narrow them down to 2 to 3.
This is done by using your buying criteria which is part of your trading plan which you already have written down. (Hopefully you have one?)
2. BUYING and SELLING. I have a pre planned strategy which I have developed by trial and error; this was achieved by learning by my trading mistakes and the mistakes of others.
3. PATIENCE.This is definitely a virtue worth developing. Sometimes the market is going up in the right direction, but is not going as fast upwards as you would like. Be patient and use a “stop loss” to lock in those profits. However small they may be. Also don’t always be in a hurry to “buy that next share” just because you have that money burning a hole in your pocket. Do your homework and then you have chosen the right share for the right reasons and not just because it looked good
4. STRESS.If it is hurting! Don’t do it, cut your losses or be content with a small profit and get out. (more…)
State of mind
“Many traders start out using a state of mind that focuses on “having.” Rather than focus on how to trade in concert with the markets, they are obsessed with profits, and what they can purchase with those profits.”
“The main goal is to make money, money that can be used to purchase objects of desire, such as a shiny red sports car, a spacious, luxurious home, or a large wardrobe of fine clothes. They believe that great financial success will be the solution to all their problems. Trading isn’t just a job; it’s their salvation. Although many traders are motivated by money, there’s a downside to focusing on what you can have as a result of your profits. When traders focus solely on accumulating wealth, on “having,” they tend to act greedy and may take risks in an effort to win. There is a blind and unrealistic focus on trading at a high level of performance. Unless they trade at a high level of performance, they can’t possibly “have” what they desire. But a novice trader can’t achieve a high level of performance, and so, there is a mismatch between skills and goals. (more…)
The Wall Street Conspiracy – Trailer
Trade with Discipline
1. never EVER add to a losing position. EVER! If it’s not working, why add good money to bad? At this point, you are in damage control mode. It’s another thing if you are trying to pyramid into a position. For example: You go into a trade with 1/3 size, add another 1/3 and add the final 1/3 in an attempt to build a full position in a stock you feel strongly about. I do not mind that. But adding money to a full position which is not working is a BIG NO in my book! You never want any ONE trade to ruin your entire week or month folks. DISCIPLINE!
2. NEVER ever compromise your stop loss. I know a nice ran away bull market makes everyone think that’s okay to remove the stop loss or lower the stop loss to much lower levels because eventually the stock will bottom and rebound. BE EXTREMELY CAREFUL guys! This is absolutely NOT what we are trying to do as traders. This is basically turning your trades into investments just because you cannot handle the pain of a small loss. It is much easier to dig yourself back form a 2-3% loss than a 10-15% loss. Hindsight is always 20-20 and most of you will say “gosh, i shoulda stuck to the original stop”. Trust me, life will be much less stressful taking occasional small stop losses along the way then being stuck in “hold and hope” mode.