Four types of trades
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18 Trading Wisdom Thoughts for Traders
1. You will be tested mentally and emotionally this is not for the weak minded. 2. Master Traders are detached emotionally from profit or loss. 4. Haste is the enemy of great entry points. 5. Doubt is often followed by a lost opportunity. 6. The Trend will give you direction on your path. 7. Having an exit strategy prevents unnecessary pain. 9. Going against momentum brings forth the fools reward. 10. Better the bad trade that is unrewarding. 11. Habit is built on the principles of probability. 12. Know your exit point in the worst case scenario first. 15. Set realistic goals and let the good times role. 18. Times of great probability are like diamonds falling from the sky. |
When You Trade -Have Risk Management ,Instead of Sleeping Like BABY
There’s an old joke about the investor who never used any stop losses. His friend knew his big positions were getting crushed.
Out of concern, the friend asked, “How are you sleeping?”
“Like a baby” he answered.
“Really? You aren’t nervous or upset?”
“I sleep like a baby” he repeated.
“That’s amazing. I’d never be able to sleep through the night with those types of losses.”
“Who said anything about sleeping through the night? I said I slept like a baby: I wake up every two hours, wet myself and cry for 30 minutes before falling back to sleep.”
That’s why risk management is so critical: to save you from sleeping like a baby, and in the long run to save you a lot of money.
Just how big is Africa?
Mastering Impulse and Fear
The Trader/Subscriber
1. When what I am trading is not moving, I need to get better at sitting on my hands. Something in me keeps pushing me to pull the trigger — and it often wins.
2. For every trade, I need to place my stop at the “If the price gets here, I was wrong” location and no closer. If the size of that stop is just too scary, I need to pass on the trade. This is the way he sets his stop.
This is our response to this Subscriber
I think trading live for you is important. Though good for learning methodology, learning psychology does not happen when trading simulated. Different worlds. When risk enters the picture, our hidden assumptions about uncertainty comes to light — if you’re looking for them. In your scheme this is how you are discovering your placement of stops from what I can see. They appear to be a mixture of standard textbook knowledge of stop strategy and your emotional reaction to them. (more…)
Knight, High-Probability Trade Setups
Tim Knight, founder of Prophet Financial Systems (now part of the TD Ameritrade stable) and a well-known blogger (Slope of Hope), takes yet another look at pattern trading in High-Probability Trade Setups: A Chartist’s Guide to Real-Time Trading (Wiley, 2011).
The bulk of the book is devoted to nineteen patterns: ascending triangles, ascending wedges, channels, cup with handle, descending triangles, descending wedges, diamonds, Fibonacci fans, Fibonacci retracements, flags, gaps, head and shoulders, inverted head and shoulders, multiple bottoms, multiple tops, pennants, rounded bottoms, rounded tops, and support failure. In each case he defines the pattern, explains the psychology behind it, and provides examples.
The two shorter parts of the book provide an overview (a primer on chart setups and the author’s personal trading journey) and tips on setting stops and being a bear as well as a guide to real-life trading. (more…)
The epigraph from STUMBLING ON HAPPINESS
Selection of too many issues is often a form of hedging against ignorance. – Gerald Loeb
No Comment —More Educated U Are More Mistakes & Blunder U will Do
