Trading vs gambling

The difference between a trader and a gambler is frequency.  A gambler does it once.  A trader is committed to take the natural fluctuations in their bottom line.  A gambler gives up control and takes little responsibility for the outcome.  A trader sees the outcome as a learning experience.  A chance to take that knowledge and let it pay over time.  A gambler sees a success as a pay day.  A trader see it is an opportunity.  A gambler focuses on luck, a trader focus on repeatable actions.  A traders can tell the difference between an aberration, for a gambler there is no distinction.

The Illusion of Skill

“The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the [financial] industry. Facts that challenge such basic assumptions — and thereby threaten people’s livelihood and self-esteem — are simply not absorbed. The mind does not digest them. This is particularly true of statistical studies of performance, which provide general facts that people will ignore if they conflict with their personal experience.”

I find that, unfortunately, to be terribly true.

For those of you who may be unfamiliar with Kahneman, he is a professor at Princeton and Nobel laureate. He is notable for his work on the psychology of judgment and decision-making, and behavioral economics.

Problems with “risk free” trading

  • It is hard to understand if it is an aberration or the new rule. Many people go down with the ship or by the time they find the advantage it disappears.
  • Risk always catches up with you.  Not realizing risk does not mean the absence of risk.
  • Career traders look for things they can repeatable do.  Learning is where the pressure comes from.  Learning is does not  factor if you are relying on Pavlovian responses.
  • Not every trade is the same.  You can never learn how to trade larger risking the same dollar amount.  The dollar amount you are down is more important of a factor in position size than market conditions.
  • All “risk free” trading is backward looking.  It is relying strictly on what happened in the past and those successes.  If the regulatory bodies got one thing right it is the standard disclaimer that most people ignore, “Past results are no indication of future performance”.

We Dare to Challenge

Always Remember –The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.

Yes.  Its confidence in our work than any aberration.  None else in 100 crore Indians have told u about the bear onslaught, not only on Indian Exchanges but across the Globe. Check our web-site, with normal eyes or with magnifiers too. We are cautioning since Last Week about the emerging Bear-spell.

 Yesterday under the caption “Dil Se” this was our adverbatim:  Time Theory Indicates freefall could start tomorrow and heavy selling across the globe in next 4-5 sessions.  On Rise SELL-SELL-SELL is my Mantra.

You all can Click here & see the Yesterday’s written article 

Do I need to enumerate about todays “Descending Triangle Formation” that would break Nifty Futures by 250 points to 4950 levels !!!!!!

 I don’t know if the readers have at least spent 5-10 minutes to read and act upon.  But all our subscribers have minted money by following shorting-calls.  The newly enrolled members must have earned back their entire fee paid to me in single session. 

 Now u all tell: Is it not an understatement that we are unique, special, perfect, accurate, superb, bewildering, …!!!!!  This is precisely the reason why we have crossed 1 Million clicks in just 9 months.

 Others are singing:   

 But Our Members are Bubbling: 

 Technically Yours

Anirudh Sethi/Baroda

Dealing with entry timing

How do you personally get around from being “too early” or “too late” on an entry?

There are a few things that have helped me get over missing a trade or “being right” and not making money.

  • Opportunity vs profit. I thought the market owed me profits.  Now, I see the bars on the chart not as profit but an opportunity to profit.  The market does not owe me anything.  I owe it to myself to execute my plan to the best of my ability.  Good things happen.
  • Important feedback. If a trade develops in a way that I had not anticipated, it means I did not notice a change.  It is now up to me to understand why or determine it was an aberration.  Either way the market is giving me valuable feedback.
  • Unlimited time horizon. One of the side effects of trading is missing trades.  It is something that you have to get over.  It is a fact of life.  The next trade is always more important than the last one.  You should have more experience and knowledge, right?  Knowledge of yourself, the market, and the interaction between the two.

Said in one sentence.  I get over missing trades because I do not have a sense of entitlement, willing to use the feedback, and know that it is just one trade in 1000′s or hopefully 10,000′s.

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