| 1. Never put off till tomorrow what you can do to-day. 2. Never trouble another for what you can do yourself. 3. Never spend your money before you have it. 4. Never buy what you do not want, because it is cheap; it will be dear to you. 5. Pride costs us more than hunger, thirst and cold. 6. We never repent of having eaten too little. 7. Nothing is troublesome that we do willingly. 8. How much pain have cost us the evils which have never happened. 9. Take things always by their smooth handle. 10. When angry, count ten, before you speak; if very angry, an hundred. |
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Don't Let Negative Emotions Control You
Successful traders do not allow negative emotions to affect their decision-making. Trading is a stressful process, and you will experience many setbacks. Expect them, however, and don’t see losses as indications that you will never succeed. Instead, be prepared to identify your negative reactions and act on them in positive ways.
Successful traders turn fear into gain. They realize that losses are a part of their business, and they expect them. But while they know that some trades will cost them money, they let those same trades become a gain in knowledge. Remember that each time you have a loss, this gives you some guidelines on how to alter your strategy. Perhaps your stop loss needs to be set higher, perhaps you need to alter how you identify trends, or perhaps you need to use new indicators.
The key point is to remember to turn fear of loss into anticipation of learning. Otherwise, your fear can cause you to forget to ask why that trade was unsuccessful and, in the worst cases, to unwisely overtrade to try to compensate for your loss.
Along similar lines, successful traders do not blame anyone or anything for their losses. They accept their setbacks and refuse to dwell on them. Instead, they learn from their mistakes and move on with their trading. Focusing on blame can cause you to feel insecure and lead you to make unwise trades to compensate for your losses. Or you may feel a desire for revenge against some non-existent enemy that “caused” your loss. Both of these emotions will distract you from your real goal of understanding how to revise your strategy based on what you learned from this trade.
Money Management
The overwhelming reason that traders win or lose is not because of their entry method, but because of their money management skills.
By “money management” it simply mean keeping losses and drawdowns to an absolute minimum while making the most of opportunities for profit.Good Trader must keep his losses to a minimum to ensure his survival. If you keep your losses to a minimum on every trade, you will have 80 percent of the battle won.
Important‑if the market starts to move parabolically or has a rangeexpansion move, take profits on the entire position. This is very likely climax!
‘When the ducks quack, feed them.” In other words, when everybody wants something, that’s probably the perfect spot to sell it to them. The price has already been bid way up. Emotions drive the markets to extremes, and these extremes are the ideal spot to exit our trades.
How to Spot Bad Statistics
Real Times News Will Not Increase Your Bankroll
Another explanation as to why real time news is useless:
Mike Bloomberg became the richest man in New York by selling traders just fifteen seconds head start on the data they needed. Fifteen seconds costs thousands of dollars a month per trader. But in most cases, what we get online is not actually in real-time and it’s not news, either.
Getting ever closer to the first moment is expensive in other ways. It might cost you in boredom, because watching an entire event just to see the good parts takes time, particularly if there’s no guarantee that there will even be good parts.
It might cost you in filtering, because the less you’re willing to wait, the more likely it is that you’ll see news that’s incorrect, out of context or not nearly as valuable as it appears.
When journalists, analysts and pundits are all racing to bring you the ‘news’ first, you get less actual news and more reflexive noise. Go watch an hour of cable news from a year ago… what were they yelling about that we actually care about today? (more…)
"Successful investors are both aggressive and defensive." – Ray Dalio
There are over $150 trillion in financial assets. Global central banks own well over 10% of them.
How neuroscience can explain your trading risk profile
ISDA, Which Refuses To Declare Greece In Default, Has Given The US A 3 Day Grace Period Before A CDS Trigger
ISDA is rapidly deteriorating to rating agency status when it comes to credibility. After it made it all too clear in the past few weeks that no matter what happens it would never “determine” Greece (or any other European insolvent country) to have breached a CDS trigger (as that would apparently destroy the world), the same trade association (logically enough comprised of the same firms that make up the heart of the status quo) has joined the rating agencies, and as of last night the CME, in making it all too clear that a debt ceiling plan (preferably Reid’s because it achieves absolutely nothing) has to pass, or else, after it earlier announced that the US has precisely 3 days to cure any missed debt payment before US CDS are triggered. Obviously this can not be allowed to happen, so expect this latest development to be used by the president in his nighlty scaremongering session.
From Reuters:
The United States would have at least 3 days to make up for any missed debt payments before it triggered payments on its credit default swaps, according to trade association the International Swaps and Derivatives Association. (more…)