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Mind over the Market Video Interview with Mark Douglas

  
Education, Video
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What is the most important part of your trading? The chart? Managing the risk? Finding the Holy Grail of trading that can’t lose? (I have bad news for you about the Holy Grail).

I am convinced how a trader emotionally reacts to the markets while trading will determine their success more than anything else.

Mark Douglas is a trader and author of Trading in the Zone and The Disciplined Trader two great trading books for traders at all levels that deal primarily with how to develop the correct mindset to be a successful trader.

My favorite Mark Douglas quotes.

Trader Psychology: (more…)

DAY TRADING LESSONS

  
  Education
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daytradinglessons-update

  • Trading is a continuous learning process

  • Don’t trade without a plan. Be as prepared as possible. Don’t try to be right
  • Emotion is a much bigger influence in stock prices than any other factor
  • The market reacts more to sentiment than facts. Herd mentality rules
  • Sell into strength and buy into weakness
  • Market always rewards minority, not the crowd. The trick to figure out if the mass perception is wrong and WHEN it will be proved to be wrong.
  • Technical setups and money management are more important than fundamental catalysts when trading
  • Always ask: What beliefs are you acting upon? What is the basis for those beliefs? Why do you have those beliefs now? Would those beliefs be different if your recent gain/loss record had been reversed? Can you clearly enumerate what could happen that would cause you to change your mind?”
  • Extreme emotions cause extreme pain. I’ve learned how not to get overly bullish or bearish
  • Be mindful of higher trading volume on down days prior to a future catalyst as bad news can and often does leaks out
  • Take responsibility for your own trading
  • Cut your losses, let your winners run, and this is more easily said than done
  • If you can’t focus, you can’t trade. Be in the zone or stay sidelined
  • Buy below value and well below value if possible
  • Being flexible can be fruitful
  • Let the market come to me and don’t force trades
  • It is never “different” this time
  • Just more……….very soon ,Till then just read these and learn something new.
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    • Important Trading Lessons

      
      Education
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    These are some of those fundamental and undeniable truths, as I have come to understand them over the course of my trading career:

    • Most of the time, markets are very close to efficient (in the academic sense of the word.) This means that most of the time, price movement is random and we have no reason, from a technical perspective, to be involved in those markets.
    • There are, however, repeatable patterns in prices. This is the good news; it means we can make money using technical tools to trade.
    • The biases and statistical edges provided by these patterns are very, very small. This is the bad news; it means that it is exceedingly difficult to make money trading. We must be able to identify those points where markets are something a little “less than random” and where there might be a statistical edge present, and then put on trades in very competitive markets.
    • Technical trading is nothing more than a statistical game. The parallels to gambling and other games of chance are very, very close. A technical trader simply identifies the patterns where an edge might be present, takes the correct position at the correct time, and manages the risk in the trade. This is, of course, a very simplified summary of the trading process, but it is useful to see things from this perspective. This is the essence of trading: find the pattern, put on the trade, manage the risk, and take profits. (more…)

    Trading Rules – For A Survival Of The Trader

      
      Education
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    1. Plan your trade. Trade under the plan.

    2. Write down your results.

    3. Keep positive mood irrespective of your losses.

    4. Do not bring the market from work to home.

    5. Constantly raise level of your purposes.

    6. Buy during bad news and sell during good.

    7. Do not be afraid to buy at high position and to sell at low.

    8. Always have well planned time for market studying.

    9. Isolate yourself from opinions of others.

    10. Always be quiet, persevering and consecutive; operate rationally.

    11. Never enter into the market because you are bored to be out of the market. To be out of a position is also a position.

    12. It is not necessary to enter and leave from the market too frequent.

    13. Traders usually study not at profits, but at losses. Study every loss for improvement of the knowledge about the market.

    14. Successful trading is combined and often accompanied by negative emotions. The most important element of successful trade is you are.

    15. Always discipline yourself to follow certain rules in advance.

    16. Do not allow big profits to turn in big losses

    17. You should have the plan, you should know the plan – and you should follow it.

    18. Perceive losses with advantage.

    19. Halve your profit and never risk more than 50 % of profit operating against the market.

    20. A key to successful trade – self-studying.

    21. There is no so much distinction between getting in the market and losing there in natural abilities, that in ability to study the errors correctly. (more…)

    15 Points for Trading System & Money Management

      
      Education
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    1. Capital comes in two varieties: Mental and that which is in your pocket or account.
    Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

    2. “Markets can remain illogical longer than you or I can remain solvent”, according to our good friend, Dr. A. Gary Shilling.
    Illogic often reigns and markets are enormously inefficient despite what the academics believe.

    3. An understanding of mass psychology is often more important than an understanding of economics.
    Markets are driven by human beings making human errors and also making super-human insights.

    4. The market is the sum total of the wisdom … and the ignorance…of all of those who deal in it; and we dare not argue with the market’s wisdom.
    If we learn nothing more than this we’ve learned much indeed.

    5. The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t.
    Do the trade that is hard to do and that which the crowd finds objectionable.
    Peter Steidelmeyer taught us this twenty five years ago and it holds truer now than then.

    6. There is never one cockroach: Bad news begets bad news, which begets even worse news. (more…)

    Linda Bradford Raschke – 50 Time Tested Classic Stock Trading Rules

      
      Education
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    50

    1. Plan your trades. Trade your plan.
    2. Keep records of your trading results.
    3. Keep a positive attitude, no matter how much you lose.
    4. Don’t take the market home.
    5. Continually set higher trading goals.
    6. Successful traders buy into bad news and sell into good news.
    7. Successful traders are not afraid to buy high and sell low.
    8. Successful traders have a well-scheduled planned time for studying the markets.
    9. Successful traders isolate themselves from the opinions of others.
    10. Continually strive for patience, perseverance, determination, and rational action.
    11. Limit your losses – use stops!
    12. Never cancel a stop loss order after you have placed it!
    13. Place the stop at the time you make your trade. (more…)

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