Let winners run. While momentum is in phase, the market can run much further than might be expected. Do not exit winners without reason!
Be quick to admit when wrong and get flat.
Sometimes a time stop is the right solution. If a position is entered, but the anticipated scenario does not develop, then get out.
Remember: if one thing isn’t happening the other thing probably is.
Flat is a legitimate position.
Be careful of correlations. Several positions can often equal one large position bearing unacceptable risk. Respect the potential for correlations to change—you have to deal with today’s correlation, not the correlation that existed when you put on the position.
The crowd is not always wrong.
Most trading problems come from an incorrect perception of risk. If you’re trading with an edge, the “risk” of any trade being a loser is not actually a risk at all.
Intuition is real, but all traders develop it. Intuition, alone, is not an edge.
Intuition must be trained properly. It is very easy to develop incorrect intuition due to cognitive biases and the nature of the market.
Mental capital is just as important as financial capital. Protect both.
Ever wonder what goes on behind the scenes? What kind of thinking and reasoning goes behind creating those sophisticated financial trading forumlas that create billions of dollars every year? Even more, do you wonder what kind of math wizard it takes to create these formulas?
Quants, or quantitative managers, are the math wizards and computer programmers in the engine room of our global financial system who designed the financial products that almost crashed Wall st.
The credit crunch has shown how the global financial system has become increasingly dependent on mathematical models trying to quantify human (economic) behaviour. Now the quants are at the heart of yet another technological revolution in finance: trading at the speed of light.
Below is a pretty interesting video that reveals the type of people and thinking that goes into creating these forumlas.
Making money in the financial markets is not only challenging but just surviving an account blow up is also a win for many new traders. There is one thing that ultimately determines your success in the markets. It is not your stock picking skills, your trend following or even trading a robust method. The dividing line between the winners and the losers in trading and investing is risk management. If you trade all in and risk it all over an over you will eventually blow up your account, and the funny thing is that it will likely be on your ‘can’t miss’ trade that is just way to obvious to everyone and is a crowded trade. Traders that believe have 10 losing trades in a row are impossible will discover it is very possible. Each trade should be large enough to return enough to make it worth your while, but small enough to make it inconsequential to your results in the long term. Trading small not only eliminates the financial risk of account ruin that is ever present in a market environment that is not conducive to your methodology but small risks also keep your logical brain in control of your trading and your emotions on the side lines.Nothing is more painful in my opinion than to build up an account during a great string of wins only to give it back with a string of losses in a different market environment. Small bets and staying out when he market waves get wild is a great formula to avoid big draw downs. You can still win big when you are right by letting a winner run but always lose small when you are wrong. The bet size on each trade will make or break ever trader at some point usually sooner than later.(more…)
A solid result, but note …. the lowest growth since 2009
More:
Manufacturing +6.5% in Q4 (Ministry of Trade and Industry says driven mainly by electronics & biomedical manufacturing clusters. Transport engineering & general manufacturing clusters continued to contract)
Successful trading has absolutely nothing to do with making money and everything to do with trading successfully. Making money will only ever be a by-product of successful trading. Successful trading is not a by-product of making money. When you attach trading to money and money to emotions and emotions to money you’ll have taken your first loss but you won’t know it yet.
Trading has everything to do with personal psychology, rules, systems, discipline, focus and skill. Like anything else that’s skill based, once you start it takes time and practice to become skilful. Ultimately trading is about making decisions between two choices, to buy or sell. As simple as these two choices are the variables that effect the decisions surrounding them can be as complex as the human mind can make them.
Successful trading has absolutely nothing to do with making money and everything to do with trading successfully. Making money will only ever be a by-product of successful trading. Successful trading is not a by-product of making money. When you attach trading to money and money to emotions and emotions to money you’ll have taken your first loss but you won’t know it yet.
Correct knowledge and the ability to change behavior are the most important parts of successful trading. 
