Latest Posts

rss

Basic principles

  
  Education
#  #  #  #  #  #  #  #

Risk management- Plan your loss before planning your profit.

Diversification- Be bullish, be bearish, be involved in various groups/markets.

Proper Position Sizing- Trade small, trade safe.

Effective Trading Plan- Make sure your plan works, and/or makes money.

Cutting Losses Short- Enter a trade that offers a small loss.

Letting Winners Run- Don’t kill your winners.

Curbing Your Emotion- This is a bi product of trading small.

Long: My rules

Short: My emotion

Update: If you took any part of this post personal, don’t. You know I am not in the business of attacking, just trying to get a message across. If I were mad, I wouldn’t have addressed it at all.. When all else fails, “Fresh Tactics.”

25-One Liners for Traders (Read and Understand ) -Anirudh Sethi

  
Analysis, Education
#  #  #  #  #  #  #  #  #  #
  1.  If you need to spend your money in a relatively short period of time it doesn’t belong in the stock market.
  2.  If you want to earn higher returns you’re going to have to take more risk.
  3.  If you want more stability you’re going to have to accept lower returns.
  4.  The stock market goes up and down.
  5.  If you want to hedge against stock market risk the easiest thing to do is hold more cash.
  6.  Risk can change shape or form but it never really goes away.
  7.  No Trader is right all the time.
  8.  No  Trading strategy can outperform at all times.
  9.  Almost any Trader can outperform for a short period of time.
  10.  Size is the enemy of outperformance.
  11.  Brilliance doesn’t always translate into better Trading results.
  12.  “I don’t know” is almost always the correct answer when someone asks you what’s going to happen in the markets.
  13.  Watching your friends get rich makes it difficult to stick with a sound Trading plan.
  14.  Day trading is hard.
  15.  Outperforming the market is hard (but that doesn’t mean it’s impossible).
  16.  There is no signal known to man that can consistently get you out right before the market falls and get you back in right before it rises again.
  17.  Most backtests work better on a spreadsheet than in the real world because of competition, taxes, transaction costs and the fact that you can’t backtest your emotions.
  18.  It’s almost impossible to tell if you’re being disciplined or irrational by holding on when your investment strategy is underperforming.
  19.  Reasonable investment advice doesn’t really change all that much but most of the time people don’t want to hear reasonable investment advice.
  20.  Successful  Trading is more about behavior and temperament than IQ or education.
  21.  Don’t be surprised when we have bear markets or recessions. Everything is cyclical.
  22.  You are not George Soros or Jesse Livermore
  23.  The market doesn’t care how you feel about a stock or what price you paid for it.
  24.  The market doesn’t owe you high returns just because you need them.
  25.  Predicting the future is hard.

Stress management

  
  Education
#  #  #  #  #  #  #  #  #

A lecturer, when explaining stress management to an audience, raised a glass of water and asked,

“How heavy is this glass of water?” Answers called out ranged from 20g to 500g. The lecturer replied,

“The absolute weight doesn’t matter. It depends on how long you try to hold it. If I hold it for a minute, that’s not a problem. If I hold it for an hour, I’ll have an ache in my right arm. If I hold it for a day, you’ll have to call an ambulance.”

“In each case, it’s the same weight, but the longer I hold it, the heavier it becomes.” He continued,

“And that’s the way it is with stress management. If we carry our burdens all the time, sooner or later, as the burden becomes increasingly heavy, we won’t be able to carry on.”

“As with the glass of water, you have to put it down for a while and rest before holding it again. When we’re refreshed, we can carry on with the burden.”

“So, before you return home tonight, put the burden of work down. Don’t carry it home. You can pick it up tomorrow.”

“Whatever burdens you’re carrying now, let them down for a moment if you can. Relax; pick them up later after you’ve rested.”

10 COMMANDMENTS FOR MAKING MONEY

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #

1.  BELIEVE IN THE DIGNITY AND MORALITY OF BUSINESS:  Making money is much harder if, deep down, you suspect it to be a morally reprehensible activity. 

2.  EXTEND THE NETWORK OF YOUR CONNECTEDNESS TO MANY PEOPLE:  Befriend many people who are a rung or two above and below your financial level, then find ways to help them achieve their desires.  You will have discovered the secret of Partnership Power. 

3.  GET TO KNOW YOURSELF:  To change the way others see you, first you have to learn to see yourself as others see you. 

4.  DO NOT PURSUE PERFECTION:  Neither neglect the imperfect nor expend yourself on futile pursuit of perfection, while failing to make the most of less perfect circumstnaces. 

5.  LEAD CONSISTENTLY AND CONSTANTLY:  Learning to lead is important, but it may not be what you think it is.  Leadership is not a noun; it is a verb.  It is not an identity; it is an action.  Don’t try to become a leader, just do it. Just lead.

6.  CONSTANTLY CHANGE THE CHANGEABLE WHILE STEADFASTLY CLINGING TO THE UNCHANGEABLE:  Convert change from enemy to ally by understanding when to enjoy the exhilaration of change and and when to fight it and steadfastly defend the unchangeable. 

7.  LEARN TO FORETELL THE FUTURE:  Who is wise? One who can tell what will be hatched from an egg that has been laid. Not he who can see the future-that is a prophet.  Wisdom is seeing tomorrow’s consequences of today’s events. 

8.  KNOW YOUR MONEY:  Your money is a quantifiable analog for your life force-the aggregate of your time, skills, experience, persistance, and relationships.

9.  ACT RICH: GIVE AWAY 10 PERCENT OF YOUR AFTER TAX INCOME:  Through the mystical alchemy of money, giving charity jump-starts wealth creation. 

10.  NEVER RETIRE:  Integrate your vocation and your identity by thinking of life as a journey rather than a destination. 

If you have not figured it out yet you soon will: learning to trade inside the charts finds its firm foundation outside the charts.  It is all in the way you think and in what you believe about money and wealth creation. 

Go to top