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The Tulipomania

Quis furor, ô cives!—Lucan.

The tulip,—so named, it is said, from a Turkish word, signifying a turban,—was introduced into western Europe about the middle of the sixteenth century. Conrad Gesner, who claims the merit of having brought it into repute,—little dreaming of the commotion it was shortly afterwards to make in the world,—says that he first saw it in the year 1559, in a garden at Augsburg, belonging to the learned Counsellor Herwart, a man very famous in his day for his collection of rare exotics. The bulbs were sent to this gentleman by a friend at Constantinople, where the flower had long been a favourite. In the course of ten or eleven years after this period, tulips were much sought after by the wealthy, especially in Holland and Germany. Rich people at Amsterdam sent for the bulbs direct to Constantinople, and paid the most extravagant prices for them. The first roots planted in England were brought from Vienna in 1600. Until the year 1634 the tulip annually increased in reputation, until it was deemed a proof of bad taste in any man of fortune to be without a collection of them. Many learned men, including Pompeius de Angelis and the celebrated Lipsius of Leyden, the author of the treatise “De Constantia,” were passionately fond of tulips. The rage for possessing them soon caught the middle classes of society, and merchants and shopkeepers, even of moderate means, began to vie with each other in the rarity of these flowers and the preposterous prices they paid for them. A trader at Harlaem was known to pay one-half of his fortune for a single root, not with the design of selling it again at a profit, but to keep in his own conservatory for the admiration of his acquaintance.

One would suppose that there must have been some great virtue in this flower to have made it so valuable in the eyes of so prudent a people as the Dutch; but it has neither the beauty nor the perfume of the rose—hardly the beauty of the “sweet, sweet-pea;” neither is it as enduring as either. Cowley, it is true, is loud in its praise. He says—

“The tulip next appeared, all over gay,
But wanton, full of pride, and full of play;
The world can’t shew a dye but here has place;
Nay, by new mixtures, she can change her face;
Purple and gold are both beneath her care,
The richest needlework she loves to wear;
Her only study is to please the eye,
And to outshine the rest in finery.”

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Risk management is the #1 priority, making money is #2. — #AnirudhSethi

The eagerness of new traders to earn money comes at the expense of proper risk management, if it is even considered at all. 
trader must to begin with appropriate position sizing, the positioning of their stop loss, and their win-rate assumptions. 
More than winning streaks or making fantastic judgments, the management of losing streaks and drawdowns will decide whether or not business will be profitable. 
Few people understand this, which is one reason why so few people are successful traders.
Risk management is the most important aspect of successful trading; without it, nothing else matters since, over the long run, the first losing streak wipes away any profits made in the past. 
Any trader who doesn’t appreciate the dangers in the markets is doomed to fail if they don’t implement risk management strategies. The alternative is disaster.

Stay disciplined with system execution long-term – #AnirudhSethi

Discipline in trading is sticking to your own trading plan. 
trader who exercises self-discipline is able to trade system with the appropriate position sizing, stop-loss levels, and trailing stops over time, just as they had originally intended.
trader may have feelings of dissociation at times. 
If they spend the time the market is closed researching trading, building system, and outlining the method they will use to enter and exit trades and how large they will size their positions, they may feel calm and sensible about the process. 
Then, when the market is active and prices are changing and they are winning or losing money, their emotions and ego might flare up and make it more difficult to think rationally and execute their set strategy. 
The mark of really professional trader is the capacity to act morally even when doing so goes against your gut.
Here are five situations in which trader may be tempted to let their emotions, wants, or ego get the best of them instead of sticking to their trading plan, and the best way to avoid giving in to those urges.
The consequences of failing to act on trading signal as soon as it appears can be severe. 
The fear of rejection might prevent you from entering the contest. 
You could not have conviction in your signals because you haven’t backtested them enough, you don’t grasp the edge, or you’re trading too aggressively. 
If you want to trade, you must embrace the possibility of losing money. 
If you’re nervous about entering trade because of anxiety you may want to reduce the amount of your stake.
“In my opinion, failing to make crucial deal is far more detrimental to your financial well-being than making poor trade,” he said. 
“- William Eckhardt
trader’s lack of self-discipline might lead them to enter transaction too late, when the odds of success are lower. 
Having the knowledge that any one transaction won’t have much of an impact on the following hundred deals will help you resist the need to chase. 
There will be more opportunities to trade in the future.
In trading, lack of patience can be shown by jumping into position too soon. 
Trying to beat the market by purchasing ahead of signal is risky since you are making irrational purchases. 
trading signal is filter that helps you make profitable trades more reliably. 
One cannot have any advantage over other traders if they lack the self-control to wait for their signal.
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