Archives of “accountability” tag

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On the horizon next week – vote in US Congress to sanction China officials over human rights abuse

  
  Analysis
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The US House (lower house of the Congress) plans to vote next week on moves to impose sanctions on Chinese officials over human rights abuses against Muslim minorities

  • the bill was approved by the Senate on May 14
This is in relation to the internment of more than 1 million Uighurs and members of other Muslim minority groups in the Xinjiang region of China
This is another indication of rising US/China strains. As these increase they tend to be a negative input for financial market risk assets (and FX) and supportive of safe haven alternatives. Add it the growing list, recent examples:
  • China will not back down from “US quickening technology war mongering” – warn of “ample countermeasures”
  • US to add 33 Chinese firms, institutions to an economic blacklist – accusation of helping China spy, links to WMDs
  • US accuses China government of blocking US airlines flying to China
  • US administration is suspicious of China nuclear weapon tests – may do so too

And, of course:

  • coronavirus origin and spread
  • trade
  • tension over new rules from Beijing to be imposed on Hong Kong
  • Taiwan

You are Accountable

  
  Education
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Traders like to think that they only need to be accountable to themselves in order to get the best out of their trading. But it has been my experience that most traders fail miserably at this task.  So why are traders not able to do this?

They do not want to:

  • Be wrong
  • Admit that they are changing their rules
  • Face up to the fact that they do not have good rules
  • Realize that they need psychological help
  • Realize that they do not have what it takes

If you are committed to doing whatever it takes to follow your rules to reach a higher level of profit, you should consider asking someone to help you with this task if you are not doing a good job of it yourself.

Who could take on the role of a trader’s accountability?

  • A significant other
  • A friend
  • A trading buddy
  • A teacher
  • A coach

What would a person need to help you be more accountable?

  • A clearly defined set of rules from you
  • Your commitment to telling the truth to them
  • An accounting of the trades you took
  • Why you think the trades you took were good opportunities
  • The risk/reward ratios before the trade
  • The money management procedure you followed
  • Whether or not you followed your rules
  • The lessons you learned
  • And at the four month periodical review, the changes you would make and why

Reward or punishment

There should be a clearly defined predetermined punishment or reward that both of you agree upon for not following your rules.  Here are some examples of punishments or rewards to consider.

Punishment

  • No trading the rest of the day
  • Walk around the block before taking the next trade
  • Twenty push ups
  • Limit the size of your trades for the rest of the week

Rewards (more…)

Trading with No Regrets

  
  Education
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Trading is really not as much of a numbers game as it is a mind game. Winning or losing in the long term will come down to whether you quit or keep going on your trading journey. Trading is not for everyone, there is no easy money in the markets. You will fight for your dollars, you will make money by doing the uncomfortable you will lose money when you think you are in a trade that just can’t lose. The emotional and mental pain will be unbearable if you do not believe in yourself and your method. If you are trading with no plan, no rules, and no system or method you will tend to be very hard on yourself for every losing trade. It was your decision that made you lose money, you will beat yourself up, and feel stupid. You will have 100% accountability for your mistake.This will not work.

What you must do is transition the accountability from yourself to your system or method. You must trade a proven methodology that will win based on the market action not your personal actions. You can not control odd out of left field events.  You can not help it if you trade a trend or a pattern and suddenly it loses. All you can do is take trades with great probabilities that match your beliefs about the market and if they are losers then you can’t blame yourself you can only cut your losses and look for the next trade that meets your parameters.

When you can shrug off a loss with no emotional or mental pain and move on to the next one you are at the next level. All you can control is your entry parameters, risk management, position size, exit, and mind set, the market determines whether you win or lose, not you.  You must have self confidence and faith in a proven method, take your trades let the market separate the winners from the losers.

Three most important elements that all great traders share

  
  Education
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  1. Self Awareness:  They know their personality and how they are hardwired as a person. They then develop a trading style that is in-line with their personality.

  2. Know your edge:  They know what their ideal set-up looks like. They trade only when they have an edge and they vary the size of their trades based on how much edge they have: Big Edge = Big Trade; Small Edge= Small Trade; No Edge = No Trade.

  3. Accountability:  They keep a daily trading journal so they can review what they are doing well/poorly, game plans, trade sizes, etc.

 

8 Words For Traders

  
  Education
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1. CONFIDENCE: absolutely essential in an environment that feeds on emotional    instability.
2. TRUST: if you cannot trust yourself who can you trust? Trust your rules, trust your edge, trust that you will do the right thing-no matter what!
3. FOCUS: you will never learn all there is to learn about the market.  Push your ego aside and focus on one market and one edge.
4.  ACCEPTANCE:  you have to accept what the market is willing to give or you will give the market what it wants to take.
5.  RESPONSIBILITY: you and you alone are responsible for the money you lose and the money you make.  Take the credit for both.  Either way you deserve it.
6.  PATIENCE:  The market is not the place to learn patience, it is the place to practice it.
7.  RULES:  the market has no rules and no one else will do it for you. Develop rules for entering AND exiting trades before trades are made.
8.  RESPECT:  you have to respect the market for what it is not for what you want it to be.  The market has a logic all its own.  You may not like it but you have to accept it.

Overcome Indecisive Trading- Take 5 Steps

  
  Education
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Admit it. Face up to what it is. Call it a slump, call it shattered confidence, call it a big scary market monster. Whatever “it” is, you have to get it on the table so you can deal with it.

Seek help. Maybe you shouldn’t go it alone. Without some accountability, it’s easy to relapse. Find a mentor or some coaching to get you back on track, and add some skills to your repertoire. The fact of the matter is that left to your own abilities as they currently stand, you may very well be facing a similar situation again.

Take inventory. Take an inventory of what’s left of your capital, both in terms of cash and confidence. It may be that you simply don’t have enough left to consider a comeback right away, so perhaps you incubate for a while and prepare in other ways for your eventual return. Or perhaps you assess your situation and realize you have more than enough to start the process.

Get uncomfortably familiar with the cause. What was it that put you in need of recovery to begin with? Overconfidence? Lack of respect for the market? A series of small mistakes which compounded your problems? Understanding the root cause of your wounds, even if painful, will help you prevent it from happening again in the future. After all, you’ve already paid the tuition, you might as well get the lesson.

Get back in the saddle. The last step in the sequence is to return to trading and begin rebuilding. Start thinking about what that’s going to look like for you and how you’ll avoid the same pitfalls which got you this time around. Visualize yourself back in the routine again, making plays, staying disciplined, and having success.

9 Trading Rules

  
  Education
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1. Move: Always be flexible.  The beauty of the stock market is polygamy is perfectly acceptable.  Never get married to a particular position or a particular strategy.   The market is complex, dynamic and always changing.  Learn to change with it if necessary.

2.  Plan de Vida: Always invest with a plan.  Have strict rules and a machine-like approach.

3.  Downshift: Pulling yourself out of the game when you’re not certain will help you from making debilitating mistakes.  When in doubt get out.

4. 80% Rule: Never let more than 20% of your portfolio put 80% of your portfolio at risk.  Position sizing is key to risk management.

5. Hope is a 4 letter word: Holding and hoping is not a strategy.  Cut your losses, learn from it and never look back.   Never ever get into something you can’t get out of.

6. Understand your risks: You can’t avoid black swans, but they don’t have to rip your face off.  Understand your risks and your rewards.

7. Goals and accountability: Set goals and keep track of your performance.  You are responsible for your own decisions.  Own your mistakes.

8. Psychology: Learn to control your emotions and understand the emotions of those around you.  Always remember what General Patton said: “if everyone is thinking the same then someone isn’t thinking”.   Also the famous Buffett quote: “Be fearful when others are greedy and greedy when others are fearful.”

9. Your Tribe: Always remember that there is more to life than investing.  Don’t live to invest.  Invest to live.  Being the richest man/woman in the graveyard is worthless if there isn’t anyone to bury you there

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