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4 Trading Mistakes

  
  Education
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  • Don’t over-leverage yourself or have all of your money tied into one position. Keeping cash on hand is okay as a trader. These days brokers are offering extremely competitive margin requirements for day trading futures, but low margins can be a wolf in sheep’s clothing.
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  • Don’t trade to trade. Understand that there are 3 positions you can take as a trader: a long position, a short position and a position to NOT be in a position. There will be plenty of trading opportunities that will come along. Don’t give money to the markets simply because you are bored!
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  • Avoid trading a strategy without having a good understanding of how the strategy works. What is the typical winning percentage? What is the largest drawdown? In general, high winning percentage strategies have smaller average profits per trade. Lower winning percentage strategies might not have as many winners, but when you are a winner, you typically win big. If you expect your strategy to bring big profits without losses, you can also expect a check made out to “REALITY” to come your way any day.

  • The market will always go higher and it will always go lower. Don’t try to pick tops and bottoms on a hunch. This is where most new traders get burned.

    • Mystery bidder offers $3,456,789 for lunch with Warren Buffett (Rs 22 crore 81 lakh 48 Thousands )

      
    Analysis, Education
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    The cost of the average restaurant meal has risen 2.7 per cent in the past year, according to the US Bureau of Labor Statistics, but if that looks steep against an economy wide inflation rate of 1.1 per cent, it is nothing compared to the rising cost of lunching with Warren Buffett.

    An anonymous bidder has paid $3,456,789 for a lunch date with the investment guru and founder of Berkshire Hathaway, some 47 per cent more than the winner of the charity auction last year.

    Mr Buffett will meet the winning bidder and up to seven friends for an intimate meal, in what has become an annual tradition that has netted more than $23m in total for the San Francisco charity, Glide.

    Mr Buffett’s late wife Susan used to be a volunteer at Glide, which offers meals, medical testing and other services to homeless and low-income people in the San Francisco’s Tenderloin district. Volunteers and supporters sang and cheered as the five-day auction moved into its final minutes on Friday night, and a late bid swelled the proceeds from $2.8m, where bidding had hovered for most of the day, to a final total that matched the all-time record from 2012. (more…)

    Traders , keep notes on the following

      
      Education
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    *  How you prepared for the day/week:  What was your market preparation?  What research did you conduct or consume?  What did you read?  What conversations did you have, and with whom?  How did you eat?  Sleep?  Exercise?  Prepare yourself mentally?

    *  How you generated your trading ideas:  Where did the ideas come from?  What was the process that led to the ideas?  What made them good ideas?  What gave you “edges” in your trades?
    *  How you expressed your ideas:  What market(s) did you use to express your views?  What instruments?  How did your expressions provide you with superior risk/reward?  If you held multiple positions, how did you size them relative to each other and gauge their correlations?
    *  How you managed your positions:  What kind of trade planning did you do?  How did you size positions and gauge your risk taking?  How did you manage your risk?  What led you to scale into or out of your positions?
    *  How you managed your performance:  How did you review your performance?  What did you learn?  How did you use your learning to improve your future performance?   (more…)

    Learning

      
      Education
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    Learning the technical aspects of trading and the markets takes time and what you think you know after 1,2, 3 years is nothing. Really, nothing. As the years roll by and you accumulate 1000’s of hours of seat time honing your edge and system you get to learn a few things about yourself as well. This is where you become a trader. And if you are humble, the learning never stops. To think otherwise is a recipe for disaster.

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