| Harvard Business School Mark Sellers, founder of Chicago-based hedge fund Sellers Capital, argues that great traders are born and not bred. He believes that there are seven “structural assets” that cannot be taught, adding, ” They have to do with psychology. You can’t do much about that.”The traits: 1) The ability to buy when others are panicking, and vice versa 2) An obsession with the trading game 3) A willingness to learn from past mistakes 4) An inherent sense of risk based on common sense 5) A confidence in your convictions and a willingness to stick with them 6) An ability to have “both sides of your brain working” (i.e. to go beyond the math) 7) The ability to live through volatility without changing your investment thought process I think that some of the concepts discussed here are spot on (and I spend a great deal of time hammering home the importance of #7) , but I disagree with the overall idea that great traders are born, not made. I believe success in trading is not about a specific style, but rather about understanding your personality traits and then developing a trading style (and which product – i.e. stocks, commodities, fx) that fits you best. |
Latest Posts
rssThe best pieces of trading advice
Here is some great trading advice I have gathered around the web. These were either answers from real traders to the question “What is the best trading advice you ever received?” Or it was advice given be successful traders when asked “What one piece of advice would you give to traders?” There are some gems in here.
Don’t treat trades like their actual cash, separate the thought of money lost and focus on the next gain.
Always use stop losses.
Don’t trade with funds you can’t afford to lose.
Don’t be obsessed by indicators .
Always, always, put in a trailing stop and take your profit.
Decide what kind of trader you wish to be. Do you want to be a day-trader, a short term trader, or a longer term trader?
The Holy Grail of investing/trading is risk management. If you don’t have an exit strategy or proper position sizing, you are gambling. I recommend all traders spend 90% of their time perfecting risk management, and success will come with time. -Damien Hoffman
Cut losses, cut losses, cut losses. If I followed my own advice, my email would be unlisted or a Hawaii address. -Howard Lindzon (more…)
The Dimensions of Life
As humans, we are all going to die one day. Death is inevitable, but death in itself is not what measures the person that you are. It is not the amount of time you spend on this earth that will be judged, but the impact that you had on others.
Life is short, so do everything you can to better the quality of your life, for that is what will have more of a lasting impression than a longer life. Here is a quote from Shira Tehrani:
“You can’t do anything about the length of your life, but you can do something about its width and depth.”
Rogoff Sees Sovereign Defaults
Feb. 24 (Bloomberg) — Ballooning debt is likely to force several countries to default and the U.S. to cut spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks.
Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years,” Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo yesterday. “I predict we will again.”
The U.S. is likely to tighten monetary policy before cutting government spending, sending “shockwaves” through financial markets, Rogoff said in an interview after the speech. Fiscal policy won’t be curbed until soaring bond yields trigger “very painful” tax increases and spending cuts, he said.
Global scrutiny of sovereign debt has risen after budget shortfalls of countries including Greece swelled in the wake of the worst global financial meltdown since the 1930s. The U.S. is facing an unprecedented $1.6 trillion budget deficit in the year ending Sept. 30, the government has forecast.
“Most countries have reached a point where it would be much wiser to phase out fiscal stimulus,” said Rogoff, who co- wrote a history of financial crises published in 2009. It would be better “to keep monetary policy soft and start gradually tightening fiscal policy even if it meant some inflation.”
A Hacker Says He Can Recreate Fingerprints Just From A Person's Photographs
A speaker at a yearly hacking conference in Germany has claimed the ability to recreate someone’s fingerprints using just photographs of their fingers, as reported by the BBC.
This capability would highlight the compromised nature of replacing passwords with fingerprints, which is already seen by experts as far from fully secure.
In his talk at the Chaos Computer Club – Europe’s largest hacker organization – Jan Krissler said he used a high-profile target for his attempt: German defense minister Ursula von der Leyen.
Krissler, also known by the pseudonym “Starbug,” used several close-range photos from a “standard photo camera” of von der Leyen’s hand from a few angles before creating an image of her thumbprint via VeriFinger, a software program used to read fingerprints. (more…)
10 Things I’ve Learned About Markets
1. “There is no such thing as easy money”
2. Events that you think are affected by cardinal announcements like the employment numbers at 8:30 am on Friday are often known to many participants before the announcement
3. Markets that have little liquidity are almost impossible to profit from.
4. When the stock market is way down, policy makers take notice and do what they can to remedy the situation.
5. The market puts infinitely more emphasis on ephemeral announcements that it should.
6. It is good to go against the trend followers after they have become committed.
7. The one constant, is that the less you pay in commissions, and bid asked spread, the more money you’ll end up with at end of day. Too often, a trader makes a fortune on the prices showing when he makes a trade, and ends up losing everything in the rake and grind above.
8. It is good to take out the canes and hobble down to wall street at the close of days when there is a panic.
9. A meme about the relation between today’s events and those of x years ago is totally random but it is best not to stand in the way of it until it is realized by the majorit of susceptibles
10. All higher forms of math and statistics are useless in uncovering regularities.
The Game Bear Play
Value of something-Naked Truth
True riches
Protrusion
