Learn how We Trade These Patterns
Latest Posts
rssHow Big are Social Networks ?
Smartest Traders with ASR Wins !
Art Huprich’s Market Truisms and Axioms
Raymond James’ P. Arthur Huprich published a terrific list of rules at year’s end. Other than commandment #1, they are in no particular order:
• Commandment #1: “Thou Shall Not Trade Against the Trend.”
• Portfolios heavy with underperforming stocks rarely outperform the stock market!
• There is nothing new on Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again, mostly due to human nature.
• Sell when you can, not when you have to.
• Bulls make money, bears make money, and “pigs” get slaughtered.
• We can’t control the stock market. The very best we can do is to try to understand what the stock market is trying to tell us.
• Understanding mass psychology is just as important as understanding fundamentals and economics.
• Learn to take losses quickly, don’t expect to be right all the time, and learn from your mistakes.
• Don’t think you can consistently buy at the bottom or sell at the top. This can rarely be consistently done.
• When trading, remain objective. Don’t have a preconceived idea or prejudice. Said another way, “the great names in Trading all have the same trait: An ability to shift on a dime when the shifting time comes.”
• Any dead fish can go with the flow. Yet, it takes a strong fish to swim against the flow. In other words, what seems “hard” at the time is usually, over time, right.
• Even the best looking chart can fall apart for no apparent reason. Thus, never fall in love with a position but instead remain vigilant in managing risk and expectations. Use volume as a confirming guidepost.
• When trading, if a stock doesn’t perform as expected within a short time period, either close it out or tighten your stop-loss point.
• As long as a stock is acting right and the market is “in-gear,” don’t be in a hurry to take a profit on the whole positions. Scale out instead.
• Never let a profitable trade turn into a loss, and never let an initial trading position turn into a long-term one because it is at a loss.
• Don’t buy a stock simply because it has had a big decline from its high and is now a “better value;” wait for the market to recognize “value” first.
• Don’t average trading losses, meaning don’t put “good” money after “bad.” Adding to a losing position will lead to ruin. Ask the Nobel Laureates of Long-Term Capital Management.
• Human emotion is a big enemy of the average investor and trader. Be patient and unemotional. There are periods where traders don’t need to trade.
• Wishful thinking can be detrimental to your financial wealth.
• Don’t make investment or trading decisions based on tips. Tips are something you leave for good service.
• Where there is smoke, there is fire, or there is never just one cockroach: In other words, bad news is usually not a one-time event, more usually follows.
• Realize that a loss in the stock market is part of the investment process. The key is not letting it turn into a big one as this could devastate a portfolio.
• Said another way, “It’s not the ones that you sell that keep going up that matter. It’s the one that you don’t sell that keeps going down that does.”
The table below depicts the percentage gain necessary to get back even, after a certain percentage loss.
• Your odds of success improve when you buy stocks when the technical pattern confirms the fundamental opinion.
• As many participants have come to realize from 1999 to 2010, during which the S&P 500 has made no upside progress, you can lose money even in the “best companies” if your timing is wrong. Yet, if the technical pattern dictates, you can make money on a short-term basis even in stocks that have a “mixed” fundamental opinion.
• To the best of your ability, try to keep your priorities in line. Don’t let the “greed factor” that Wall Street can generate outweigh other just as important areas of your life. Balance the physical, mental, spiritual, relational, and financial needs of life.
• Technical analysis is a windsock, not a crystal ball. It is a skill that improves with experience and study. Always be a student, there is always someone smarter than you!
Dealing with Trading Fear
Be In Tune With the Markets
Trade the markets as they are and not as you want them to be.
If we are not in tune with the markets and don’t listen to them, we are going to be in a losing game.
After all, hope is a lousy hedge.
Be In a Supportive Environment
It is important to listen to the people that we respect and are successful.
There are traders whose spouse and/or friends have little or no risk tolerance. As a result, these traders allow the fear of their spouse and/or friends to become the boundaries of their success.
Artificial Intelligence, Chess, and the Stock Market
In 1997 chess grandmaster Gary Kasparov met the Singularity. And the Singularity won.
In 1985 Kasparov easily beat a chess-playing computer, even though he resorted to a trick to out-Kasparov the machine’s Kasparov program. Eleven years later, though, the chess legend struggled with Deep Blue, a computer with even more powerful processing power. But even Kasparov couldn’t compete with Deep Blue once its development team doubled the processing power a few years later.
Kasparov was beat, but he drew new lessons from the run-in that he details in New York Review of Books. These lessons might help you become a smarter–and less anxious–trader.
According to Kasparov, the exponential gain in technology didn’t ruin the game; it actually had some surprising aftershocks.
First, the game became more global. With access to computer programs that could train students available anywhere and everywhere, students far from the chess epicenter of Russia began to crop up.
Kasparov says:
“With the introduction of super-powerful software it became possible for a youngster to have a top- level opponent at home instead of need ing a professional trainer from an early age. Countries with little by way of chess tradition and few available coaches can now produce prodigies.” (more…)
Marc Faber :Chinese economy will crash
“It does not make sense for China to build more empty buildings and add to capacities in industries where you already have overcapacity. I think the Chinese economy will decelerate very substantially in 2010 and could even crash.”
in www.nzherald.co.nz
Perfect Picture of Trader's Family
Yes ,No More Comments……………………!!
9 -Aphorisms for Trading
“We depend on our opponents bad moves to make some wins.”
“Sometimes you have your opponent exactly where he wants you… and then it’s too late.”
“A trade once made can never be unmade.”
“There is a time to attack, and a time to defend–and a time to wait.” (the summer markets favor the latter).
“When your opponent offers you a piece as a gift. It is often better to just say no.”
“Instead of trying to learn all the openings it might be wise to just adopt two of three favorites.”
“Trading is like checkers. A single bad move can create a domino effect– and lead to loss.”
“After 15 years of paying checkers I’ve learned one thing. Those who hesitate are those who win the gold.”
“Cocksureness in checkers, trading or life is the badge of ignorance.”
Dr. Randy Pausch Speech
Here is an inspirational speech from Dr. Randy Pausch, the late college professor. Check out his words of wisdom for us all: