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Trading Loss

  
  Education
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Trading-Loss-1Losses are part of any type trading. Some are bigger and some are smaller. Every loss hurts, it does not matter whether it is big or small. Learn to respect them and try to minimize them.

A Planned ‘Entry’ leads to a Planned ‘Exit.’ Before you enter into a trade, you have plenty of time to think about Entries/Exits. Once you are in a trade, you have limited focus and may not make rational decisions for the exits (loss/profit).

If you have planned your trade ‘Entry’ with multiple entries/lots at multiple levels, then ‘ADDING’ or ‘Scaling Up’ is part of the plan. Adding is part your strategy. You must know ‘ADDING’ levels and size BEFORE you place your first order. You must also know how you plan to EXIT this trade.

If you are adding more shares/contracts because of a losing position and DID NOT PLAN then averaging down becomes gambling. Most traders blow out their capital by Forced-Adding process. This obviously leads to many psychological issues (Poor discipline, Gun-Shy:Afraid to pull-trigger, Overtrading, Premature Entries/Exits etc.) If you see a Loss at your ‘STOP LEVEL’, get out of the trade than ADD. Never HOPE that this trade will turn-around. 7 out of 10 times, it will NOT turn-around and will end up in a bigger loss. If you have planned ‘STOP’ ahead of your trade, you will feel confident during the trade and may come back to trading with cooler head at a later time/day, in case of a loss.

Principles to being "Super Rich "

  
Education, Life
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#1: Give Your Talents Until They Can’t Live Without It: “Wake up in the morning and find out what you want to give as opposed to what you want to get. Through this practice of becoming a good giver you become a good getter.”

#2: Relentlessly Pursue Your Goals Without Appearing Needy.

#3: If You Don’t Love it, Leave it Alone: “I want to stress is that making money just for the sake of getting paid is a pedestrian activity that you can rise above.” If you don’t love it, don’t do it.

#4: Let Go of the Results: “You really have no control over the results, you have control over the action.”

#5: Get Open: “You want to always be open, creative and fluid as possible, and never become rigid, old or tight.”

How George Soros Knows What He Knows

  
  Education
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georgesoros

I wonder if George Soros can really attribute his financial success to his theoretical framework that he calls the “Theory of Refexivity.” Or perhaps he just simply listens to the clues that his bodily instincts provide him with before making important trading decisions. Hmmm . . . Here’s what his son Robert has to say:
“My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, Jesus Christ, at least half of this is bullshit. I mean, you know the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it’s this early warning sign.”

Words of Wisdom from Colm O’Shea

  
  Education
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In “Hedge Fund Market Wizards”, Jack Schwager interviews Colm O’Shea of Comac Capital. There are some great quotes in the interview and here are some of my favourites:

 You need to implement a trade in a way that limits your losses when you are wrong, and you also need to be able to recognize when a trade is wrong.

 … what strikes me about really good managers (is that) they don’t get attached to their ideas.

 You need a method that suits your personality.

 People who like trading because they like gambling are always going to be terrible at it. For these people, the trading books could be greatly shortened to the message: “Don’t trade. You are really bad at this. So just don’t do it.”

 Traders who are successful over the long run adapt. If they do use rules, and you meet them 10 years later, they will have broken those rules. Why? Because the world has changed. (more…)

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