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18 -Wisdom One Liners for Traders

  
  Education
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1. You will be tested mentally and emotionally this is not for the weak minded.

 2. Master Traders are detached emotionally from profit or loss. 

3. Boredom is the enemy of the master opportunist.

4. Haste is the enemy of great entry points.

5. Doubt is often followed by a lost opportunity.

6. The Trend will give you direction on your path.

 7. Having an exit strategy prevents unnecessary pain.

8. The laws of probability give strength to your fingers.

 9. Going against momentum brings forth the fools reward. 

10. Better the bad trade that is unrewarding. 

11. Habit is built on the principles of probability.


12. Know your exit point in the worst case scenario first.
13. The master trader is an escape artist.
14. When one knows the present they master the futures.

15. Set realistic goals and let the good times role.


16. A loss can be turned into a win when one is swift.
17. A master in day trading trades in an egoless state.

 18. Times of great probability are like diamonds falling from the sky.

Mastering Reward/Risk

  
  Education
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riskrewardMost traders ignore reward/risk ratios, hoping that luck will save them when things start to go bad. 

 This is probably the main reason so many of them are destined to fail. It’s really dumb when you think about it, because reward/risk is the easiest way to  get a definable edge on the market house. 

 The reward/risk equation builds a safety net around your open positions. It’s designed to tell you how much can be won, or lost, on each trade you  take. The secondary purpose is to remove emotion so you can focus squarely on the cold, hard numbers. 

 Let’s look at 15 ways that reward/risk will improve your trading performance. 

 1. Every setup carries a directional probability that reflects a specific pattern. Always execute positions in the highest-odds direction. Exit your trades  when a price fails to respond according to your expectations. 

 2. Every setup has a price level that violates the pattern. Only take trades where price needs to move a short distance to hit this “risk target.” Look the  other way and find the “reward target” at the next support or resistance level. Trade positions with the highest reward target to risk target ratios.  (more…)

Life and Markets

  
  Education
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LIFEANDMARKETRespect is the first casualty in lost love.

Four industries dominate the economy: hope, escape, protection, and convenience.

Success is the point at which talent and skill meet opportunity.

The aim of all trading education: to encourage trading.

The printing press democratized the acquisition of knowledge; the computer has democratized its dissemination.

Date markets before deciding to marry them.

Anatomy of a bad trade: Hope, then despair.

Love, once present, never dies. It must be killed. (more…)

Real Times News Will Not Increase Your Bankroll

  
  Education
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Another explanation as to why real time news is useless:

Mike Bloomberg became the richest man in New York by selling traders just fifteen seconds head start on the data they needed. Fifteen seconds costs thousands of dollars a month per trader. But in most cases, what we get online is not actually in real-time and it’s not news, either.

Getting ever closer to the first moment is expensive in other ways. It might cost you in boredom, because watching an entire event just to see the good parts takes time, particularly if there’s no guarantee that there will even be good parts.

It might cost you in filtering, because the less you’re willing to wait, the more likely it is that you’ll see news that’s incorrect, out of context or not nearly as valuable as it appears.

When journalists, analysts and pundits are all racing to bring you the ‘news’ first, you get less actual news and more reflexive noise. Go watch an hour of cable news from a year ago… what were they yelling about that we actually care about today? (more…)

How can you tell when a trader is passionate about trading vs. addicted to it?

  
  Education
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The first step in dealing with any addictive pattern is identifying it–and identifying it as a problem. Here are a few questions that you might ask yourself:
* Have there been times when I told myself to stop trading, but still found myself placing trades any way?
* Do I find myself overtrading by putting on positions with too large size or by trading during periods when nothing is happening?
* Have my trading losses created problems for me in my relationship(s), or have they caused financial problems for me?
* Have people close to me told me that I need to stop trading?
* Is the pain from losing more extreme than the satisfaction from winning?
* Do I find my moods fluctuating with my P/L?
* Do I trade simply out of boredom sometimes?
* Do I find myself preoccupied with trading outside of market hours at the cost of other work and relationships?
Notice that, for many of these questions, you could substitute the word “drinking” or “gambling” for “trading”. The dynamics of addictions are the same across the board. If you answered yes to three or more of these questions, I would suggest that trading has become a problem for you.
How does one deal with addictive trading? The first step is to identify it, but the second–and harder–step is to acknowledge that you need help for it. It’s pride that tells us we can handle it on our own through will power, but addictions wouldn’t occur in the first place if will power were sufficient to prevent consequences. (more…)

Top Ten Reasons Traders Lose Their Discipline

  
  Education
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Losing discipline is not a trading problem; it is the common result of a number of trading-related problems. Here are the most common sources of loss of discipline, culled from my work with traders:

10) Environmental distractions and boredom cause a lack of focus;

9) Fatigue and mental overload create a loss of concentration;

8) Overconfidence follows a string of successes;

7) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red;

6) Loss of confidence in one’s trading plan/strategy because it has not been adequately tested and battle-tested;

5) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations;

4) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades);

3) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions;

2) Not having a clearly defined trading plan/strategy in the first place;

1) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality.

1+14 Mental Behavior of Traders

  
  Education
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  1. Boredom: The trader wants some “action” so they put on a trade. Trades are for when entry signals are hit not to alleviate boredom.

  2. Pessimism: The trader starts to have a negative attitude about losing money. Be positive if you are learning form losses becasue you are paying tuition for this education.
  3. Frustration: Frustration comes from expectations not being met. Don’t focus on your P& L, focus on executing your trading plan.
  4. Overwhelm: Focus and simplicity are the keys to profits, complexity and lots of information are the road to be overwhelmed and unprofitable.
  5. Disappointment: Disappointment should not come from losing trades, disappointment should only come because of a lack of discipline in trading your plan.
  6. Doubt:Only trade a system AFTER you have thoroughly researched, back tested, or studied it in real time. Trade only with proven faith in a system, naive hope quickly leads to doubt and failure. (more…)

18 Trading Wisdom for Traders

  
  Education
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1. You will be tested mentally and emotionally this is not for the weak minded.

 2. Master Traders are detached emotionally from profit or loss.

3. Boredom is the enemy of the master opportunist.

 4. Haste is the enemy of great entry points.

5. Doubt is often followed by a lost opportunity.

6. The Trend will give you direction on your path.

 7. Having an exit strategy prevents unnecessary pain.

8. The laws of probability give strength to your fingers.

 9. Going against momentum brings forth the fools reward.

 10. Better the bad trade that is unrewarding.

 11. Habit is built on the principles of probability.

12. Know your exit point in the worst case scenario first.

13. The master trader is an escape artist.

14. When one knows the present they master the futures.

 15. Set realistic goals and let the good times role.

16. A loss can be turned into a win when one is swift.

17. A master in day trading trades in an egoless state.

 18. Times of great probability are like diamonds falling from the sky.

“Top 15 Reasons Traders Lose Their Discipline”

  
  Education
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Losing discipline is not a trading problem; it is the common result of a number of trading-related problems. Here are the most common sources of loss of discipline, culled from my work with traders:

15)Lack of discipline includes several lesser items.’ i.e., impatience, need for action, etc. Also, many traders are unable to take a loss and to take that loss quickly.

14)Emotion makes many traders hold a loser too long. Many traders don’t discipline themselves to take small losses and big gains.

13)Often traders have bad timing, and not enough capital to survive the shake out.

12) Many traders can’t (or don’t) take the small losses. They often stick with a loser until it really hurts, then take the larger loss. This is an undisciplined approach. A trader needs to develop and stick to a system.

11)Lack of experience in the market causes many traders to become emotionally and/or financially committed to one trade, and unwilling or unable to take a loss. They may be unable to admit they have made a mistake, or they look at the market on too short a time frame.

10) Environmental distractions and boredom cause a lack of focus;

9) Fatigue and mental overload create a loss of concentration;

8) Overconfidence follows a string of successes;

7) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red;

6) Loss of confidence in one’s trading plan/strategy because it has not been adequately tested and battle-tested;

5) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations;

4) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades);

3) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions;

2) Not having a clearly defined trading plan/strategy in the first place;

1) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality.

18 Trading Wisdom Thoughts for Traders

  
  Education
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1. You will be tested mentally and emotionally this is not for the weak minded.

 2. Master Traders are detached emotionally from profit or loss. 
3. Boredom is the enemy of the master opportunist.

 4. Haste is the enemy of great entry points.

5. Doubt is often followed by a lost opportunity.

6. The Trend will give you direction on your path.

 7. Having an exit strategy prevents unnecessary pain.
8. The laws of probability give strength to your fingers.

 9. Going against momentum brings forth the fools reward.

 10. Better the bad trade that is unrewarding.

 11. Habit is built on the principles of probability.

12. Know your exit point in the worst case scenario first.
13. The master trader is an escape artist.
14. When one knows the present they master the futures.

 15. Set realistic goals and let the good times role.
16. A loss can be turned into a win when one is swift.
17. A master in day trading trades in an egoless state.

 18. Times of great probability are like diamonds falling from the sky.

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