Can you teach yourself to trade? Do you realize how important learning on your own is if you really want to be a successful trader? Everything about Kevin Bruce’s trading is self-taught. He started in the basement of the University of Georgia library: The school had old editions of the Wall Street Journal on microfilm. In the basement dungeon, he would compile his own record of the open, high, low, and closing prices for all markets. At the time, Bruce was actually working at a gas station at night, and between cleaning bugs off windshields and pumping gas, he had time to think and research–which is where he would analyze that price data. Bruce had a Texas Instruments handheld calculator that helped him sort through price data collected from the library. He figured out how to mathematically define a trend (in order to profit from its movement). It was a basic trend trading system. It was the same system he had used for the trading game in school with slight tweaks. Ultimately, it was the same one he would use with real money in the decades to follow.
Archives of “calculator” tag
rss9 things know yourself in order to obtain success in trading
- An aspiring trader has to understand what her/his hook is and construct her/his style of negotiation around this hook. Ask yourself some questions and determine what about the markets attracts you to it.
- Do you like the adrenaline and the emotion of the competition? Or do you prefer a more controlled form of making decisions?
- Are you more academic and inclined to perform investigations of the market? Or do you feel more comfortable trusting your instincts and intuition?
- Are you set by defined rules and prefer to use a calculator? Or are you more qualitative in making your decisions?
- Are you interested in international matters?
- Are you interested in the ins and outs of individual companies? Or are you interested in economic theory?
- What is it that you want from trading, to be the next George Soros? Do you want the liberty of working from home? Do want an additional source of income and profit?
- Responding to these questions will help you easily in defining what type of trader you will become.
- To determine what motivates you in the markets. But this is just the beginning. Once you know what motivates you, you can begin to determine the type of markets in which you should operate, the trading profile that you should adopt, and the additional preparation so that your trading will go further than just the basics. This is the best way to become a successful trader, the comprehension of the markets, the strategy, and the profile that best adjusts for you, by this manner you will maximize your profitability.
The market is the calculator
If you are attempting to reach 10 via the calculator, there are many and various ways of getting there: 5+5, 2+8, 15-5, 25 –15, or even 2 + 2 –1 –1 –2 –2 +3 +3 +3 + 3. When it comes to making money in the market our calculator may want to make it to 10 much quicker than the market does and we may want to add 5 + 5 to get there but be prepared for the market to take its own sweet time adding things up. If all that matters is getting to 10, then make sure the road you take is paved with minuses along with pluses along the way or all your money will be going to the 5508 (punch this number into your calculator and turn it upside down to see what it spells), which will make the employee a very unhappy and broke individual.
Larry Hite Insights and Wisdom
Larry Hite, who was profiled in Jack Schwager’s Market Wizards’ series, spoke recently to a group of students. An excerpt:
I believe I had to get into this business because it was simple. There are just a few questions you got to ask yourself. It’s like a checklist that you have to go through. I’m going to go through those questions, discuss them with you, and they can save you a lot of grief. I don’t know that they will make you a lot of money, but mostly they do. I mean, making money in the markets is more simple than it’s not. The trouble is that sometimes you get in the way, or if you’re working for a firm, they get in the way, because there are a lot of social implications. First I’m going to tell you a little about math. I have a guy that works for me, [who] graduated from Wharton, magna cum laude, and we were sitting around one day and we were, I don’t remember what we were doing but we had to figure out the compounded rates of return, and instead of using a calculator we were just looking at the numbers and doing it in our heads. He was young and just out of college, and he kind of felt puffed up about it. You know, it made us feel smart, which is a rare feeling for me. Then I said to him, “You know Michael, the problem with this is anybody can do this with six dollar calculator. You don’t have to be a phi beta kappa. Anybody can do this.”
Larry Hite
Later he continued:
One of the great things about the market is, the markets don’t care about you. The market doesn’t care what color you are. The markets don’t care if you are short or tall. They don’t care about anything. They don’t care whether you leave or stay…I met the guy who wrote this best seller now called, Bringing Down the House, it’s about these MIT guys who beat the blackjack tables. And part of the problem, if you’re going to be a blackjack counter is that the casinos don’t like you. They actively don’t like you. And they come and tell you in rather strong things to take your business away. Well, the beautiful thing about the markets, they don’t like you, they don’t dislike you, they just don’t care. They are there everyday. You want to play, you can play. You don’t want to play, don’t play. And you can choose. You sit, there is no penalty. You know, when you stand you know…I don’t know how many of you play baseball…when your at bat if something comes through the strike[zone], if you don’t swing you still get a strike against you. But the markets are a no penalty game. You can stand there and wait. You can go home and wait. It doesn’t matter. And that’s really a terrific thing.
Larry Hite
Many people lose sight of the main goal of trading the markets. Instead of worrying about making money, they worry about how much they are trading. Keep Hite’s words close, and don’t forget the main goal.
The market is the calculator
If you are attempting to reach 10 via the calculator, there are many and various ways of getting there: 5+5, 2+8, 15-5, 25 –15, or even 2 + 2 –1 –1 –2 –2 +3 +3 +3 + 3. When it comes to making money in the market our calculator may want to make it to 10 much quicker than the market does and we may want to add 5 + 5 to get there but be prepared for the market to take its own sweet time adding things up. If all that matters is getting to 10, then make sure the road you take is paved with minuses along with pluses along the way or all your money will be going to the 5508 (punch this number into your calculator and turn it upside down to see what it spells), which will make the employee a very unhappy and broke individual.
Stock trading is easy as long as we understand how to do the math.
TRADING WISDOM
1. The market expects you to accept losses. If you want to play in the market you better be prepared to play by the market’s rules. Accept the losses, make them small based on proper risk parameters, and the market will consider it a tithe. Just set it aside and help pay for a pew, not the entire church.
2. The market wants you to admit when you are wrong. Commit to admit. If the market is always right, and it is, then go ahead and let the market know NOW that you understand and accept its omnipotence. Broadcast it to the heavens and to depths of the earth; broadcast it to your friends and family; broadcast it to your neighbors; broadcast it in every chat room you use to brag in. Let everyone know you will be wrong more often than right and that you are OK with that. If the market knows you do not mind being wrong the market will leave you alone.
3. The market will reward your discipline. Let’s face it, the market is one disciplined son of a gun. When it says it is going to crush the bears with their death cross and the bulls with their golden cross it does. When the market says a bearish economic report does not matter I am going higher anyway it will. When the market says that cute little support line you drew is nothing but “a lead pencil and I am an eraser”, then erasing it will go. Stick to a discipline of listening to what the market is saying and the market will whisper its direction instead of shouting its lies.
4. The market is the calculator. If you are attempting to reach 10 via the calculator, there are many and various ways of getting there: 5+5, 2+8, 15-5, 25 –15, or even 2 + 2 –1 –1 –2 –2 +3 +3 +3 + 3. When it comes to making money in the market our calculator may want to make it to 10 much quicker than the market does and we may want to add 5 + 5 to get there but be prepared for the market to take its own sweet time adding things up. If all that matters is getting to 10, then make sure the road you take is paved with minuses along with pluses along the way or all your money will be going to the 5508 (punch this number into your calculator and turn it upside down to see what it spells), which will make the employee a very unhappy and broke individual.
The market is the calculator
If you are attempting to reach 10 via the calculator, there are many and various ways of getting there: 5+5, 2+8, 15-5, 25 –15, or even 2 + 2 –1 –1 –2 –2 +3 +3 +3 + 3. When it comes to making money in the market our calculator may want to make it to 10 much quicker than the market does and we may want to add 5 + 5 to get there but be prepared for the market to take its own sweet time adding things up. If all that matters is getting to 10, then make sure the road you take is paved with minuses along with pluses along the way or all your money will be going to the 5508 (punch this number into your calculator and turn it upside down to see what it spells), which will make the employee a very unhappy and broke individual.
Stock trading is easy as long as we understand how to do the math.