1) Forget about performance and results numbers (i.e. P/L, Wins vs. Losses). These numbers only blur the plan and increase the anxiety on not losing on next trade. This aggravates the proper mindset to prepare to trade properly. Perfectionists will not execute well and will try to focus on buying low (bargain hunting to win) when the entry is not right.
2) Create the trading plan and write it into details to avoid ambiguity. This helps prevent loosely interpreted actions and end with too much leeway and perfect execution won’t be successful.
3) Focus on the charts and work toward identifying and preparing the entry and exits. Having these numbers in mind will keep the focus on the executing at the right prices.
4) Focus on the Risk:Reward ratio in mind. Having this ratio will keep the execution precise because any miscue will change the ratio in negative way. If the ratio is set, chances of the making the perfect entry and exits are higher. (more…)
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rssA couple of the suggestions
– Understand that each and every equity analyst has an axe to grind, you can listen to an analyst on Blue Channels or read their reports but one must understand where they are coming from and how they are biased.
– Mute financial television 99.9% of the time and don’t get fooled by the over-utilized enticing ‘Breaking News’ banners.
-Just watch Beautiful babes (Anchors )….Nothing else.
-Everything else from Source base to Breaking NEWS is Manipulative only
Techncially Yours/ASR TEAM/BARODA
Patience
Curiosity may have killed the cat but impatience has been the slow death of many a trader. The market has a way of rewarding those rare individuals who respect the market’s fickle temperament. The market does what it wants to do when and how it wants to do it regardless of our need to be right, right now, about our trade. We can either accept this fact and trade accordingly or we can challenge the market’s authority and risk not only our pride but our money to boot. Pride may be good for the ego but will get us nowhere when our brokerage account is depleted. Patience eliminates acts of desperation when we do things we would not ordinarily do, such as jump into trades when there are none, add to losers, and double up to make up for a recent loser. |
How to Succeed at Investing -How Investing is TAUGHT !
5 Disciplines Every Trader Must Have
1. Have a process w unbreakable discipline. Great trades sometimes come with small losses. Keeping losses in check is key… there is always another day and capital is a traders lifeblood.
2. It’s a marathon and amazing opportunities come to those with patience, available capital, and a thoughtful plan. Timeframes are key and patience can mean waiting an additional 15 mins, an hour, a day, or a week, or legging into weakness or out of strength similarly. Exiting profitable “long” trades in fractions (while raising stop-loss levels) allows you to let them run and maximizes profits.
3. The trend is your friend but don’t marry it. Letting emotion get the best of you often leads to lost profits. Become balanced and make sure that you can make money bull or bear. Get to know yourself. Do an honest assessment and work within skills & psychology. Stretch yourself but don’t try to be someone you’re not. And that goes for life as well.
4. Don’t second-guess yourself due to “the crowd.” Let your plan (and your stops) do the second guessing.
5. Respect others like you respect your money. Work hard, give freely. Make money.
FEDERAL RESERVE CRISIS SOLUTION CHART
What is the Purpose of Trading?
It seems clear, doesn’t it? The purpose of trading is to make money. The trade is planned, entered, and exited with the goal of increasing the size of one’s trading account. What other purpose would there be?
The dictionary says this about purpose:
“something set up as an object or end to be attained : intention b: resolution, determination”
What about:
The purpose of trading is to not lose money.
The purpose of trading is to practice discipline.
The purpose of trading is to use my talents.
The purpose of trading is to grow.
Or how about:
The purpose of trading is to express my true nature. I was meant to be a trader.
Maybe the purpose of trading is simply to trade. Because that is what you have been called to do, or what you are meant to do, or it’s the highest expression of your nature as a producer rather than a consumer. When you trade successfully, you are disciplined, you are growing, you are using and developing your talents, you are making money, and you are creating wealth from scratch. But most of all, you are trading because it’s the right thing to do for you.
Billion euro project to recreate the human brain gets underway-Video
Your Mails -My Answers
Q: Can you discuss the concept of drawdowns a bit? Novice traders seem to think experienced traders become proficient to the point that they are right much more than not and thus experience very small drawdowns. But talking to experienced traders this does not seem to be the case.
A: In my view, the biggest difference between a successful trader and one who is not is how they manage their mistakes. Note, I am of the opinion that those who trade well don’t make fewer mistakes but they simply have learned how to handle them when they occur. This opinion is based on years of experience but also more recently working closely one-on-one with other traders. The fastest way I’ve learned to be of help to others is to show them how to recognize, quickly admit, and then take aggressive action when a mistake has been made. Losers tend to make bigger mistakes out of small ones. They let their egos get in the way and double-down in losing trades and make matters worse when a mistake is made.
Ultimately, the best you can do in this business is try to be “more right than wrong,” especially at key turning points and be quick to repair and take remedial action when you are wrong as well as managing your risk through proper trading size, stop losses, and simple diversification.
Q: I know that Alexander Elder recommends trading less often for better results. And after reading your blog for the last couple of years I know that you follow this strategy for the most part as well. What do you do in a range bound time such as what we are experiencing, have you been doing more day trading?
A: I’ve been very inactive recently. In fact, when you see more posts at the website (especially those link posts that take so much time and energy to do), you pretty much can count on that I’m doing a lot of sideline sitting. In many ways, this blog helps me stay patient as it keeps me busy and focused without feeling the necessity to make trades that don’t offer exactly what I’m looking for. All good traders seem to have different ways to cope when the environment is not receptive and I recommend you find ways to cope as well. As for day trading, that is fine if you love doing that, but that’s never been my desire. Day trading for pennies a trade seems too much like work and I don’t need that kind of stress. I can afford to be patient and pick my spots.
To send in your question(s) for next mailbag, please send me e-mail at [email protected] Although I may not directly answer your question in these posts, it is extremely helpful to know what topics are of interest to you so that I can find links and look for opportunities to discuss and cover your interests in the future. Thank you!
Forecasts Predictions And Prophets
Here’s what Max Gunther, author of ‘The Zurich Axioms’ has to say:
The Zurich Axioms: ‘On Forecasts’, page 62:
Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly.
‘Speculative Strategy’:
The Fourth Axiom tells you not to build your speculative program on a basis of forecasts, because it won’t work. Disregard all prognostications. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word. Nobody.
Of course, we all wonder what will happen, and we all worry about it. But to seek escape from that worry by leaning on predictions is a formula for poverty. The successful speculator bases no moves on what supposedly will happen but reacts instead to what does happen.
Design your speculative program on the basis of quick reactions to events that you can actually see developing in the present. Naturally, in selecting an investment and committing money to it, you harbor the hope that its future will be bright. The hope is presumably based on careful study and hard thinking. Your act of committing dollars to the venture is itself a prediction of sorts. You are saying, “I have reason to hope this will succeed.” But don’t let that harden into an oracular pronouncement: “It is bound to succeed because interest rates will come down.” Never, never lose sight of the possibility that you have made a bad bet.
If the speculation does succeed and you find yourself climbing toward a planned ending position, fine, stay with it. If it turns sour despite what all the prophets have promised, remember the Third Axiom. Get out.