One of my all-around favorite quotes on trading is actually about poker.
It comes from cash game pro Tommy Angelo, who says, “The best way to get better at poker is to get better at everything and let poker rise with the tide.”
An intimidating thought for some. To REALLY up your game (be it poker, trading, or something else entirely) you have to improve as a competitor. As a human. As a thinking, acting, decision-making machine.
For others, though, this thought is not intimidating but inspiring. “Raising the game,” i.e. getting better at everything, is part of the attraction in the first place.
To that end, trading is all about making decisions.
And making good decisions is not just an art, but a skill set — an area of focus where you can learn and practice and improve. (more…)
Archives of “blends” tag
rssBarista technique and Trading
I start my day with a cup of coffee, everyday. A cup of freshly ground, and brew Espresso or Long Black is essential. I am not a coffee expert, but I am a coffee lover. I have my grinder and Espresso machine at home. Barista technique breaks down into three time scales and skill levels:
The first is the minute or so spent grinding and making the shot. The key here is acquiring the skills to make shots consistently. One should be able to turn out four or five in a row with virtually the same timing, volume, color, crema and taste. This skill is a physical thing, that is, it’s a matter of training and practice rather than learning.
The second is the time spent carefully tasting an espresso or series of espressos, identifying the flavor balance and defects, and making adjustments to ones pull or machines to correct them. The “dialing-in” process for a new blend usually requires a series of shots to get a satisfactory result, and can proceed over several days to fine tune it. To do this well, one needs to have experience in tasting and analyzing good espresso. One also needs to know how changes in extraction variables and machine settings affect the espresso’s taste.
The third is acquiring experience and informed preferences with a wide range of coffees, blends, espresso equipment, and alternative techniques. If you or someone you’re serving wants an espresso with a specific pallette of flavors; you will know how to provide it. Home roasting and blending helps in this. So does visiting good cafés and roasteries, and talking with the knowledgeable people there.
I see a lot of similarities to trading. What do you think? Start making coffee…
Wisdom from The New Market Wizards
Here are the excerpts from “The New Market Wizards” which are very useful tips from the top traders:
Randy McKay
“One very interesting think I’ve found is that virtually every successful trader I know ultimately ended up with a trading style suited to his personality… My trading style blends both of these opposing personality and put where it belongs: trading. And, I take the conservative part of my personality and put it where it belongs: money management. My money management techniques are extremely conservative. I never risk anything approaching the total amount of money in my account, let alone my total funds.”
William Echkardt
“What really matters is the long-run distribution of outcomes from your trading techniques, systems, and procedures. But, psychologically, what seems of paramount importance is whether the positions that you have right now are going to work. Current positions that you have beyond any statistical justification. It’s quite tempting to bend your rules to make your current trades work, assuming that the favorability of your long-term statistics will take care of future profitability. Two of the cardinal sins of trading – giving too much rope and taking profits prematurely – are both attempts to make current positions more likely to succeed, to the severe detriment of long-term performance.”
“Since most small to moderate profits tend to vanish, the market teaches you to cash them in before they get away. Since the market spends more time in consolidations than in trends, it teaches you to buy dips and sell rallies. Since the market trades through the same prices again and again and seems, if only you wait long enough, to return to prices it has visited before, it teaches you to hold on to bad trades. The market likes to lull you into the false security of high success rate techniques, which often lose disastrously in the long run. The general idea is that what works most of the time is nearly the opposite of what works in the long run.” (more…)