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Know Yourself & Educate Yourself

  
  Education
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Know yourself– Understand what style fits your personality.  Can you hold a position for a few days or only a few hours?  Are you okay with larger draw downs or can you only take small ones? Are you more comfortable trading pullbacks or breakouts? Most importantly, don’t try to use a style that doesn’t “fit” your personality.

Educate yourself – But don’t over educate yourself or fall into the trap of reading to many biographical trading books.  They may be entertaining, but you will learn little about the current state of trading.  Stick to my  ”Holy Trinity” of books “How To Make Money In Stocks” by O’Neil, “The Disciplined Trader” by Mark Douglas, and “The StockTwits Edge” by Howard Lindzon.  The rest you can learn from online trading communities and blogs.

Quotes by Paul Tudor Jones II

  
  Education
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Paul Tudor Jones II is one of the most successful hedge fund managers. He has never suffered a losing year. His fund has returned 23% annualized gain since its inception in 1986. Paul Tudor is a momentum trader, who believes that price move and trend unfold only because of investors’ behavior.

Markets have consistently experienced “100-year events” every five years. While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it.

I see the younger generation hampered by the need to understand and rationalize why something should go up or down. Usually, by the time that becomes self-evident, the move is already over.

There is no training — classroom or otherwise — that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market. There’s typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. The only way to learn how to trade during that last, exquisite third of a move is to do it, or, more precisely, live it.

Fundamentals might be good for the first third or first 50 or 60 percent of a move, but the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic.

12 Trading Rules

  
  Education
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121. Loss of opportunity is preferable to loss of capital

2. Picking safe, readable, and ultimately high probability trades is the way to go

3. Use logical profit objectives for all positions. Know your exits and stick to them

4. Markets are squirrelly animals – make your trading plans ahead of the market

5. Don’t buy new highs or sell new lows – wait for the market to come to you. Buy retracements. If you miss the train, don’t beat yourself up – another one will come by shortly

6. Above all, follow your own trading plan and no one else’s

7. Trade quietly – with the exception of a mentor, tell no one about your positions, profits, or losses. This is especially true for those who are close to you, like your wife, husband, or friends. This self-gratification process or sharing process will put you under psychological pressure to win on every trade and can be a primary reason for failure to follow your plan

8. Don’t carry a sizeable position when traveling. The market will always catch you off guard at the most inopportune time

9. You are only one trade from humility. A swelled head does not belong on a trader’s shoulders

10. Add to your knowledge before attempting to add to your wallet. Newbie traders think they can become pros with little more than a computer and hope. In this business, hope is a four letter word. Show me a humble trader, and I’ll show you someone ready to learn

11. Develop your sense of humor – you’ll definitely need it

12. Help other traders whenever you can. This is more practical than philosophical – giving keeps the ego in line and when you need help, and you will, you’ll find it.

Life Lesson

  
  Education
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icecreamboy“Fund Managers ,Future Traders and Day Traders should learn something from this kid!:

A young boy enters a barber shop and the barber whispers to his customer, “This is the dumbest kid in the world. Watch while I prove it to you.” The barber puts a dollar bill in one hand and two quarters in the other, then calls the boy over and asks, “Which do you want, son?” The boy takes the quarters and leaves the dollar. “What did I tell you?” said the barber. “That kid never learns!” Later, when the customer leaves, he sees the same young boy coming out of the ice cream store & says “Hey, son! May I ask you a question? Why did you take the quarters instead of the dollar bill?” The boy licked his cone and replied, “Because the day I take the dollar, the game’s over!”

John Taylor Of The World's Largest Currency Hedge Fund Sees Euro Dropping To $1.20 By August

  
Analysis, Economy, Education, Forex
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John Taylor, chairman and chief executive officer of FX Concepts LLC, the world’s largest currency hedge fund, sees the euro dropping to $1.20 by August, and believes parity is possible. Be very careful, because as of today Goldman is now accumulating euros (as per its just released Sell recommendation). More from Taylor: “It’s going to be quick because things are really falling apart…. Some of these [countries] have to be thrown out [of the EMU]. If you look at a country like Latvia, which has been effectively in the Euro, has been saved by the European Commission and the IMF much like they are suggesting Greece will be, their retail sales were down 30% last year, the GDP was down 18%, it is expected to drop another 8% this year. Latvians are starving, the place is a disaster area: that’s what you have to go through to be a part of the Euro.” On whether his firm has felt any political pressure on putting on bearish euro bets: “None at all. We are SEC regulated and the information is there, but nobody seems to be caring.” Lastly, Taylor ridicules the WSJ story about the restaurant-based collusion: “Yes, they had a meeting and talked about how bad the euro was. But that they in fact had some impact: their assets are 1% of the daily volume. Somebody like us, we have a bigger position against the euro than those people put on.” Taylor says in the next three to six months, the dollar will be strongest against the euro, and Eastern European currencies. In a longer horizon, he says to be long Asia and short the euro. Bottom line: sell Europe, buy everyone else. And join the bandwagon… Just as Bernanke prepares the dollar’s next suicide move with inflation obviously not working.

20 Poker Quotes -Traders Must Read

  
  Education
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Poker is one of the very few casino games that’s like trading. Unlike other games where the casino keeps the odds in their favor, in poker there are many ways to get an edge over other players at the poker table. The way you play the odds can give you an edge, folding on bad hands quickly and playing the best hands only give you an advantage. Managing risk per hand can keep you in the game while others blow out. Sticking with the odds instead of letting emotions take over is another big advantage over other players. I have a buddy that plays well in poker tournaments and it is odd how we can talk about the same elements of strategy that matches both endeavors. Both poker and most financial markets are zero sum games where money flows from those who do not know how the game works to those who do.

  •  “Living in the past is a Jethro Tull album, not a smart poker strategy.” -Richard Roeper
  • “The beautiful thing about poker is that everybody thinks they can play.” -Chris MoneyMaker
  • “If there weren’t luck involved, I would win every time.” — Phil Hellmuth
  • “If you can’t spot the sucker in the first half hour at the table, then you are the sucker.” — Matt Damon in Rounders
  • “The cardinal sin in poker, worse than playing did cards, worse even than figuring your odds correctly, is becoming emotionally involved.” -Katy Lederer
  • “You cannot survive without that intangible quality we call heart. The mark of a top player is not how much he wins when he is winning but how he handles his losses. If you win for thirty days in a row, that makes no difference if on the thirty-first you have a bad night, go crazy, and throw it all away.” -Bobby Baldwin
  • “When we play, we must realize, before anything else, that we are out to make money.” -David Sklansky
  • “Poker may be a branch of psychological warfare, an art form or indeed a way of life – but it is also merely a game, in which money is simply the means of keeping score.” -Anthony Holden
  • “The real things to know is that folks will stand to lose more than they will to win. That’s the most important percentage there is. I mean, if they lose, they’re willing to lose everything. If they win, they’re usually satisfied to win enough to pay for dinner and a show. The best gamblers know that.” -Pug Pearson
  • “Poker reveals to the frank observer something else of import—it will teach him about his own nature. Many bad players do not improve because the cannot bear self-knowledge.” -David Mamet

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