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7 Things -Traders Must Accept

  
  Education
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  1. You will have to accept that over the long term at best only 60% of your trades will be winners. It will be much less with some strategies.
  2. Accept that the key to being a successful trader is having big wins and small losses, not big bets paying off. Big bets can lead quickly to you being out of the game after a string of losses.
  3. Accept that the best traders are also the best risk managers, even the best traders do not have crystal balls so they ALWAYS manage their capital at risk on EVERY trade.
  4. If you want to be a better trader then you need to accept that trading smaller and risking less is a key to your success. Risking 1% to 2% of your capital on any single trade is the first step to winning at trading. Use stops and position sizing to limit your losses and get out when your losses grow to these levels.
  5. You must accept that you will have 10 trading losses in a row a few times each year. The question is what your account will look like when they happen.
  6. You have to accept that you will be wrong, a lot.  The sooner you accept you are wrong and change your mind the better off you will be.
  7. If you really want to be a trader then you are going to have to accept the fact that trading is not easy money. It is a profession like any other and requires much work and effort and even years to become proficient. Expect to work for free and pay tuition to the markets through losses until you learn to trade consistently and profitably.

Trading is about math, ego control, risk management, psychology, focus, perseverance, passion, and dedication. If you are missing one, you may not make it. Trade wisely my friends.

10 WAYS TO BE A TRADER NOT A GAMBLER

  
  Education
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  1. Trade based on the probabilities NOT the potential profits.
  2. Trade small position sizes based on your account NEVER put your whole account at risk of ruin.
  3. Trade a plan NOT emotions.
  4. Always enter a trade with an edge that can be defined DO NOT trade with entries that are only opinions.
  5. Trade based on quantifiable facts NOT opinions.
  6. Trade after extensive research on what works and what does not. Don’t trade in ignorance.
  7. Trade with the correct position sizing since risk management is your number one priority and profits are secondary concern.
  8. Trade in a way that eliminates any chance of financial ruin NOT to get rich quick.
  9. Trade with discipline and focus DO NOT change the way you trade suddenly due to winning or losing streaks.
  10. Trade in the present moment and DO NOT get biased due to old wins or losses.

9 Rules For Risk Management

  
  Education
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Rule No. 1- Do not venture in markets and products you do not understand. You will be a sitting duck.

Rule No. 2- The large hit you will take next will not resemble the one you took last. Do not listen to the consensus as to where the risks are (that is, risks shown by VAR). What will hurt you is what you expect the least.

Rule No. 3- Believe half of what you read, none of what you hear. Never study a theory before doing your own observation and thinking. Read every piece of theoretical research you can-but stay a trader. An unguarded study of lower quantitative methods will rob you of your insight.

Rule No. 4- Beware of the nonmarket-making traders who make a steady income-they tend to blow up. Traders with frequent losses might hurt you, but they are not likely to blow you up. Long volatility traders lose money most days of the week.

Rule No. 5- The markets will follow the path to hurt the highest number of hedgers. The best hedges are those you alone put on. (more…)

10 Characteristics Among Successful Traders

  
  Education
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1) The amount of time spent on their trading outside of trading hours (preparation, reading, etc.);

2) Dedicated periods to reviewing trading performance and making adjustments to shifting market conditions;

3) The ability to stop trading when not trading well to institute reviews and when conviction is lacking;

4) The ability to become more aggressive and risk taking when trading well and with conviction;

5) A keen awareness of risk management in the sizing of positions and in daily, weekly, and monthly loss limits, as well as loss limits per position;

6) Ongoing ability to learn new skills, markets, and strategies;

7) Distinctive ways of viewing and following markets that leverage their skills;

8) Persistence and emotional resilience: the ability to keep going in the face of setback;

9) Competitiveness: a relentless drive for self-improvement;

10) Balance: sources of well-being outside of trading that help sustain energy and focus.

World’s 10 Worst Economies

  
Analysis, Economy, Education
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It takes a lot to kick a dying ailing man in the guts as he is already agonizing on the floor, but nobody wants to do it to poor old Uncle Sam, do they? And that’s despite the fact that the government in the US is inefficient and that economic development leaves a lot to be desired, these days. Even the World Economic Forum increased the ranking for the USA from 5th in 2013 in the world to 3rd position in 2014. Either the USA is giving some back-handed greenbacks to the committee or they really are not looking into things as well as they should be. What’s the US got to sing praises for these days in terms of economic ranking? We can only imagine that they will increase yet again in this year’s rankings once they get released if it is only for the greatest pleasure and most-intellectual masturbation of the elitist decision-makers in the country. The USA is at the top of the roost, isn’t it?

The World Economic Forum judges each country in the world according to a set of criteria that determine the productivity of a country and its ability to be competitive. Of course, the whole concept of competitiveness is a western-world set of values, isn’t it? Just like democracy, which has to be exported to all and sundry, whether they want or need it in their states, the liberal concept of economic activity has to be exported to the rest of the world. If you don’t, then you are going to be downgraded and dumped into the abysses of the rankings in the world. Who wants to come out last or get given the wooden spoon in the race towards that big dollar sign in the sky? Nobody. Not even those that don’t want liberal economies.

World Economic Forum and Competitiveness

Either you are an efficiency-driven economy according to the World Economic Forum that highlights the basic need of improving economic output and heightening efficiency of production (which basically means getting people to work more for less and at the same time produce more for the customer just as long as the latter agree to pay exorbitant sums of money); or you are a factor-driven economy, which is bad because they are the least developed and they can only afford to pay cheap labor a pittance and they sell of their natural resources (in abundance to the efficiency-driven economies). Whoever said economics was hard to understand? The third category of the World Economic Forum is those countries that are called innovation-driven economies. Those are the western-world nations that have managed to invent and innovate new ways of exploiting the previous two categories at will and in depth. Apparently, any country that is not in one of these three categories does not, will not and cannot exist according to the World Economic Forum. In its own words theWEF is “committed to improving the state of the word through public-private cooperation”.

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30 One Liner For Traders -Must Read

  
  Education
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1. Buying a weak stock is like betting on a slow horse. It is retarded.

2. Stocks are only cheap if they are going higher after you buy them

 3. Never trust a person more than the market. People lie, the market does not.

4. Controlling losers is a must; let your winners run out of control.

5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.

6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.

7. Emotional traders want to give the disciplined their money.

8. Trends have counter trends to shake the weak hands out of the market

. 9. The market is usually efficient and can not be beat. Exploit inefficiencies.

10. To beat the market, you must have an edge. (more…)

Apprasing Your Trading Relationship To Pride- 10 points

  
  Education
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1.Does your self-esteem rise and fall with your latest trading ?
2.Have you ever taken a trade just to prove your ability as a trader ?
3.Do you brag about your winning trades to others ?
4.Do you try to hide your losing trades from others ?
5.Do you ever make up false stories about your trading to impress others ?
6.Do you worry about what other people  think of your as trader ?
7.Make an honest self-assessment of your trading.
8.Complement yourself and give yourself credit when you do something right.
9.When you make a mistake or do something that doesn’t serve your trading ,plan how you will correct this tomorrow or in the future.Say to yourself ,”That’s not like me.I can do better.”
10.Notice your improvement and commit to doing better each day ,week ,month ,and year

2 Different Types of Entry Signals

  
  Education
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Momentum Signals:

  1. This is buying into price strength.
  2. You buy high trying to sell higher or sell short low trying to cover even lower.
  3. You are buying a breakout of a range with the possibility that the break out level you bought becomes the new support.
  4. You are trading a trend of higher highs or lower lows.
  5. You are trading an asset under accumulation and the price is rising higher and higher as a trend continues.

Buying Support:

  1. You are buying weakness on the possibility that the low is in.
  2. You are buying oversold levels and believe that a snap back is imminent.
  3. You are buying pullbacks to key support levels in an uptrend.
  4. You are buying fear looking to sell it higher when an asset reverts to the mean.
  5. You are buying at technical levels that history shows presents a great risk/reward ratio and limited downside.

Money can be made buying dips and buying break outs. The keys to profitability lie in the winning percentage and the risk/reward ratio.

Know yourself.

  
  Education
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 Easier said than done, but it’s worth spending time understanding who you are in relation to risk, money, hard work, uncertainty, and a number of other things you will face as a trader. While you’re at it, also consider what skills you need to develop: a better understanding of probability? Deeper knowledge of financial markets? Any specific analytical techniques?

There are many ways to work toward the goal of knowing yourself, and it’s probably the process that matters more than anything. Some people will talk to a therapist, some will go on long walkabouts, some will journal and reflect, and some may work on the answers in the quiet moments each day. There’s no wrong way to do this, but the market is going to make you face the best and worst in yourself.

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