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50 Rules for Traders ,Yes Don't Worry about New High in Sensex ,Nifty

  
  Education
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I’m sure most everybody knows these truisms in their hearts, but this list is nicely edited and makes a good read.

  1. Plan your trades. Trade your plan.
  2. Keep records of your trading results.
  3. Keep a positive attitude, no matter how much you lose.
  4. Don’t take the market home.
  5. Continually set higher trading goals.
  6. Successful traders buy into bad news and sell into good news.
  7. Successful traders are not afraid to buy high and sell low.
  8. Successful traders have a well-scheduled planned time for studying the markets.
  9. Successful traders isolate themselves from the opinions of others.
  10. Continually strive for patience, perseverance, determination, and rational action.
  11. Limit your losses – use stops!
  12. Never cancel a stop loss order after you have placed it!
  13. Place the stop at the time you make your trade.
  14. Never get into the market because you are anxious because of waiting.
  15. Avoid getting in or out of the market too often.
  16. Losses make the trader studious – not profits. Take advantage of every loss to improve your knowledge of market action.
  17. The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.
  18. Always discipline yourself by following a pre-determined set of rules.
  19. Remember that a bear market will give back in one month what a bull market has taken three months to build.
  20. Don’t ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point.
  21. You must have a program, you must know your program, and you must follow your program.
  22. Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.
  23. Split your profits right down the middle and never risk more than 50% of them again in the market.
  24. The key to successful trading is knowing yourself and your stress point.
  25. The difference between winners and losers isn’t so much native ability as it is discipline exercised in avoiding mistakes.
  26. In trading as in fencing there are the quick and the dead.
  27. Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.
  28. Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long.
  29. Accept failure as a step towards victory. (more…)

How Mohnish Pabrai Crushed The Market By 1100% Since 2000

  
Analysis, Education
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Mohnish Pabrai’s long-only equity fund has returned a cumulative 517% net to investors vs. 43% for the S&P 500 Index since inception in 2000.  That’s outperformance of 474 percentage points or 1103 percent. [Disclosure: I and/or some of my clients are long Pabrai’s fund or specific holdings within his fund.]

To anticipate your next question: Yes, his fund is closed to new investors.  But there is still hope.  Read on — sadist that I am, I put the answer at the end

Pabrai is a classic value investor in the tradition of Warren Buffett, Charlie Munger, Seth Klarman and Joel Greenblat. I recently had an opportunity to hear him talk and thought I’d pass along some of my bright yellow highlighting.

How to start investing (more…)

Get Comfortable With Being Uncomfortable

  
  Education
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In the trading world, you will either make money or lose money on any given trade. All that matters in the end is making more money when you’re right than you lose when you’re wrong.  Knowing this, traders have learned to accept failure as part of the game, but they also use the information they acquire from their mistakes as a learning tool.  Frequently, what they learn from losing money is more valuable than what they learn when they make money”  

Abe Cofnas, Trading Binary Options, 2d ed. -Book Review

  
Analysis, Education

Binary options are simple trading instruments that are designed to offer an attractive alternative for the directional trader with a small account. As Abe Cofnas explains in the second edition of Trading Binary Options: Strategies and Tactics (Bloomberg/ Wiley, 2016), the trader makes a straightforward bet: that the settled price of an underlying market will be at, above, or below a target strike barrier by a defined future time. If he’s right, he gets $100; if he’s wrong, he gets nothing. At least that’s the way it works on Nadex (North American Derivatives Exchange).
Traders who have shied away from options because they seem overly complicated may be relieved to learn that understanding the Greeks is not essential in the world of binary options. Yes, market makers use them to price the binaries and Cofnas even introduces the reader to volatility smiles, but the trader’s major decisions are whether to buy or sell binary options, at what strike price, and for what duration. How much does he think the market will move in a given length of time and in what direction?
Of course, getting the direction, magnitude, and timing of a short-term trade (weekly, daily, and a selection of intraday expiries) right is a daunting task. Cofnas therefore devotes four chapters to tools the binary options trader can use to improve his skills: sentiment analysis, tracking fundamental forces that impact markets, technical analysis, and volatility tools.

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The questions you need answers for

  
  Education

What is my reason for entering this trade?
* What is my objective in entering this trade?
* What is my maximum profit potential and what is the probability of achieving it?
* What is my maximum risk and what is the probability of achieving that?
* Will I need to adjust this position?
* If so, at what point do I need to adjust and what type of adjustment will likely be required?

Am I going to be able to keep track of this trade closely enough to avoid any potential disasters?

If you don’t have answers for these questions before entering a particular trade, this should be your warning not to take the trade in the first place.

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