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rssSimple, bedrock rules for managing your personal finances
Simple, bedrock rules for managing your personal finances: http://t.co/9wOp69ycyu pic.twitter.com/xQSSE5dq0Q
— Wall Street Journal (@WSJ) February 15, 2015
Control & Focus
Know what you can control and what you can’t. You can’t control the market, but you can control how you react to the market. Before you can become a consistent trader, you must first control how you respond to the market and your actions. We can always be in control of ourselves and how we act. Being able to regulate our actions has a lot to do with how we see ourselves as a trader, our vision for ourselves, and our confidence.Better to start and continue on your journey slowly, than to never start at all.
Risk is the Possibility of Loss
“Risk is the possibility of loss. That is, if we own some stock, and there is a possibility of a price decline, we are at risk. The stock is not the risk, nor is the loss the risk. The possibility of loss is the risk. As long as we own the stock, we are at risk. The only way to control the risk is to buy or sell stock. In the matter of owning stocks, and aiming for profit, risk is fundamentally unavoidable and the best we can do is to manage the risk. To manage is to direct and control. Risk management is to direct and control the possibility of loss. The activities of a risk manager are to measure risk and to increase and decrease risk by buying and selling stock.”
“Risk is the possibility of loss. That is, if we own some stock, and there is a possibility of a price decline, we are at risk. The stock is not the risk, nor is the loss the risk. The possibility of loss is the risk. As long as we own the stock, we are at risk. The only way to control the risk is to buy or sell stock. In the matter of owning stocks, and aiming for profit, risk is fundamentally unavoidable and the best we can do is to manage the risk. To manage is to direct and control. Risk management is to direct and control the possibility of loss. The activities of a risk manager are to measure risk and to increase and decrease risk by buying and selling stock.”Simple?
17 equations that changed the world
6+1 Habits of Highly Successful Traders
Traders must have the perseverance to stick to trading until they break through to success. Many of the best traders are just the ones that had the strength to go through the pain, learn, and keep at it until they learned to be a success.
- Great traders cut losing trades short. The ability to accept that you are wrong when a price goes to a place that you were not expecting is the skill to push the ego aside and admit you are wrong.
- Letting a winning trade run as far as it can go in your time frame is crucial to having big enough winners to pay for all your small losing trades.
- Avoiding the risk of ruin by risking only a small portion of your capital on each trade is a skill to not get arrogant and trade too big, if you risk it all enough times you will lose it all eventually. (more…)
Stanley Druckenmiller on the most important lessons he learned from Soros
The Purpose of Living Life Purposefully
Here are some good self-assessment questions:
* How purposeful are you in getting the sleep you need to function at your best?
* How purposeful are you in getting the exercise you need to function with maximum energy?
* How purposeful are you in eating the right foods to sustain your health and well-being?
* How purposeful are you in organizing your time so that you’re spending your highest quality time on your most important priorities?
* How purposeful are you in cultivating the quality of time with the people who matter most in your life?
* How purposeful are you in ensuring that, each day, you are accomplishing something meaningful in your life?
Can we really expect to achieve our life’s purposes if we are not living our days purposefully?
Can we trade with intention and discipline if we don’t live the rest of our lives intentionally?
Everything in life can be approached with intention and purpose or it can be approached mindlessly and routinely. In carrying out daily activities with self-direction, we strengthen our ability to stay mindful and purposeful for life’s greater goals.
Life is one great gymnasium, but we only develop if we recognize the equipment and conduct our workouts.
COMPREHENSION
This is the trader’s ability to attend to the smallest details of his or her trading plan. I believe a trader must have rules for entering and exiting a trade before the trade is made. In the beginning these rules can be in the form of a checklist wherein before each trade all the details of your rules are checked and verified. With time, the rules become such as a part of your psyche that the checklist is in your head and can be confirmed with quick precision. The key is to never change the rules. When the rules stay the same your mind will not be able to play tricks on you. |