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Trading Nuggets

  
  Education
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Price — The Truth, The Light, The Way

  • Work to understand price
  • Price does not move in a straight line
  • Big moves take time
  • Volatility is your friend and helps to compress time
  • Although volatility is your pal, it can cut both ways
  • If a stock moves 30% a day, then you can’t trade with a 5% stop
  • Don’t expect a volatile stock to stop behaving as it has been and only move in your favor just because you’re now in it. Unless you’re Bill Clinton, what is, IS.

Random Thoughts:

  • Observe but be slow to shift gears — we are trend followers, not predictors
  • It’s the market’s “job” to shake you outErr on the side of the longer-term trend
    • The market will do what it has to do to create the most pain (for the most people)
    • The market will often do the obvious in the most un-obvious manner
  • DO wait for entries
  • DO use protective stops
  • DO trail and scale as offered

Quote from Victor Sperandeo

  
  Education
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Trader Vic- Methods of a Wall Street Master

In his book Trader Vic: Methods of a Wall Street Master, Victor Sperandeo mentioned:

As an aside, I want to point out that although this period of intensive study helped me immeasurably in my ability to call the markets, it cost me substantially in my personal life. My daughter, Jennifer, was at a crucial formative age (3 to 5), and I spent almost no time with her. I would get home from the office, eat, and go straight back to work in my study. When she came into my office, I would shoo her away impatiently, totally ignoring the fact that she needed her father’s attention and love. It was a bad mistake that both of us are paying for today. If I had to do again, I would draw out the study period and give Jennifer more time.

After reading this paragraph, I have been doing a lot of thinking. I’m not sure if this is a common mistake among traders, I, sometimes, make the similar mistake. We know this business requires a lot of time, effort, attention, but our loved ones require more.

Just being a little bit emotional. Anyway, this book is really a good read. If you haven’t done so, go and get one.

Understanding Yourself

  
  Education
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  • Understanding yourself is as important as understanding the markets.

  • Stick with what you know and are good at and leave the rest.

  • There are many ways to trade, find what works for you.

  • I am not smarter than the market.

  • To succeed, you must be mentally strong.

  • Learning to letting profits run is has proven far more difficult than I realize.

  • The emotional part of trading can be a deal breaker.

  • To be honest, I am a terrible trader. But that’s is because I don’t work hard enough.

  • Patience is a virtue in lazy portfolio investing.

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