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The Coin Flip Test And Trade Probability -Anirudh Sethi

  
Analysis, Education
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Since we are human merchants and we like what we do, executing the above-portrayed model would require a ton of tolerance and it would likewise be extremely exhausting. we better utilize a computerized forex-system to execute this coin-choice exchanging model. all we would need to do is truly utilize a guarded hazard the board of most extreme 1% per exchange, on the grounds that a half winning-likelihood would not imply that we would not need to confront 10 or 15 failure exchanges a column! recollect that these probabilities become valid in the long run!

since we like to inhale and encounter the business sectors, and we obviously need to exchange physically utilizing specialized examination or key news, we should now have a more critical investigation of the universe of cash the board, stop misfortune, take benefit, and obviously additionally the satisfactory exchange volume. since section 1 of this article arrangement, we realize how a dealer can ensure his record by straightforward RISK MANAGEMENT counts. this is totally vital and its significance can’t be rehashed regularly enough!

Presently, in the comic, sadly, flipism didn’t turn out to be well for Donald. A coin flip for every choice brought about a progression of incidents for poor Donald. Amusingly, however, so as to bargain out some proper recompense, Donald managed to pursue down the con artist Professor Batty by finding the misrepresentation behind the correct entryway dependent on a coin flip, so maybe the way of thinking holds some legitimacy. In spite of the fact that I don’t really advocate carrying on with a real existence dependent on coin flips, incidentally, coin flips and the hidden factual rules that administer coin flips are especially powerful when applied to certain issues normally looked in the information.

without utilizing any investigation technique each time you open exchange, you have a half possibility that the exchange goes toward you! the reality of the situation may prove that in 10 exchanges it goes 8 or multiple times toward you, or against you… be that as it may, in 1.000 exchanges you will have indirect 500 victors and 500 washouts. you can contrast that with tossing a coin. the more regularly you toss a coin the more you can be certain, that the scientific probability will appear and affirm the half possibility for each side of the coin or every bearing of an exchange. knowing this, all you need to do ist to pick an SL/TP-RATIO of 1:2. for instance 20 pips SL and 40 pips TP. in the event that you currently win each second exchange (half), you will naturally make benefits!

(more…)

DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING

  
  Education
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1. Never, Ever, Ever, Under Any Circumstance, Add to
a Losing Position… not ever, not never! Adding to losing positions is
trading’s carcinogen; it is trading’s driving while intoxicated. It will lead to
ruin. Count on it!

2. Trade Like a Wizened Mercenary Soldier: We
must fight on the winning side, not on the side we may believe to be correct
economically.

3. Mental Capital Trumps Real Capital: Capital
comes in two types, mental and real, and the former is far more valuable than
the latter. Holding losing positions costs measurable real capital, but it costs
immeasurable mental capital.

4. This Is Not a Business of Buying Low and Selling
High; it is, however, a business of buying high and selling higher.
Strength tends to beget strength, and weakness, weakness.

5. In Bull Markets One Can Only Be Long or
Neutral, and in bear markets, one can only be short or neutral. This may
seem self-evident; few understand it however, and fewer still embrace it.

6. “Markets Can Remain Illogical Far Longer Than You
or I Can Remain Solvent.” These are Keynes’ words, and illogic does often
reign, despite what the academics would have us believe. (more…)

Dennis Gartman’s Trading Rules List

  
  Education
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Some food for thought for the weekend. Trading rules from great traders are always worth reading. If you spend some time to understand the concept behind each trading rule this will improve your trading skills and take you to the next level. Also check this video where Dennis Gartman talks about the concept of keeping it simple.

1. Never, under any circumstance add to a losing position…. ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!

2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.

3. 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.

4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is “low.” Nor can we know what price is “high.” Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed “cheap” many times along the way.

5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.

6. “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.

7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds… they shall carry us higher than shall lesser ones.

8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect “gaps” in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.

9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In “good times,” even errors are profitable; in “bad times” even the most well researched trades go awry. This is the nature of trading; accept it.

10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market’s technicals. When we do, then, and only then, can we or should we, trade.

11. Respect “outside reversals” after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more “weekly” and “monthly,” reversals.

12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance. (more…)

DENNIS GARTMAN’S -Trading Rules

  
  Education
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1. Never, under any circumstance add to a losing position! Ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!
2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.
3. 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.
4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is too low. Nor can we know what price is too high.  Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed cheap many times along the way.
5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.
6. 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.
7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds as they shall carry us higher than shall lesser ones.
8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect gaps in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.
9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In good times even errors are profitable; in bad times even the most well researched trades go awry. This is the nature of trading; accept it.
10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market’s technicals. When we do, then, and only then, can we or should we, trade. (more…)

22 Trading Rules

  
  Education
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1. Never, under any circumstance add to a losing position…. ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!
2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.
3. 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.
4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is “low.” Nor can we know what price is “high.” Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed “cheap” many times along the way.
5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.
6. “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.
7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds… they shall carry us higher than shall lesser ones.
8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect “gaps” in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.
9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In “good times,” even errors are profitable; in “bad times” even the most well researched trades go awry. This is the nature of trading; accept it.
10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market’s technicals. When we do, then, and only then, can we or should we, trade. (more…)

DENNIS GARTMAN :On Being Wrong

  
  Education
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-Don’t miss to Read…………………..!!

“If I’ve learned one thing in 35 years of doing this. I’ve learned this and I’ve learned it the hardest of all ways. Because I made the decision one time to do the wrong thing. I learned this. Whatever you do don’t ever, ever, ever, not never, not ever, under any circumstance, any time ever. Am I clear? Add to a losing trade. Never, ever, ever. Why would you ever add to a losing trade? The market, which is the sum total of the wisdom, and perhaps the stupidly, but predominately the wisdom the sum total of the wisdom of the market is telling you are wrong. How dare you argue with the market? How dare you stand up? What sense of hubris must that take on your part to tell the rest of the world that you’re wrong and I’m right. Because that’s what you’re doing when you’re adding to a losing position. Don’t do that. I will tell you. I did that one time. I lost my wife [first wife]to a margin call. I did, in fact, that did happen…November 11, 1983.”  Wives get very upset “when you come home and say, ‘Sweetheart, I lost the house today’”.

“I will tell you I am good at trading. I am good at investing. I am good at making decisions. I am good at admitting mistakes and that’s my best trait. I am really, really good at admitting mistakes. And that’s to me the most important attribute that an investor, that a trader, that somebody who’s trying to make a living matching wits in the market can have is the ability to admit that they are wrong. That trumps all other concerns. Education doesn’t seem to have that much viability to me. It’s the ability to say I’m wrong.”

“The great ones, the really great traders, I’m sorry, don’t average down. They average up on winning positions. They average up on winning long side trades. Why? Because the market is telling you that you are right. Why would you not do more of something when the market is telling you that you are right? Why do most of us constantly do the opposite? Why do most of us try to understand some fundamental about some stock that we like, some industry that we like, some corporation that we like and you understand the fundamentals of it and you like the underlying fundamentals of the industry that it’s in. You like the long term fundamentals of the US economy and you buy some of it at 25 and it immediately goes to 20. It’s not a better buy at 20. It’s a worst buy at 20 because somebody knows something that you don’t know. That’s the hardest thing for all of us to learn. I’m good at trading and I’m wrong most of the time.”

“I’m good at trading and I’m wrong alot according to my wife. When we got married, we sat down the first year and she said you know this is really very sad. You had a good year at trading. You made us a very nice living this year but Dennis you were wrong 53% of the time this year. I thought this was terribly harsh. You couldn’t even beat a coin toss. I got out of it by saying, Sweetheart I’m so in love with you that it’s colored my ability to think. She bought it. I got another year. We sat down the second year. She said, my wife the accountant, one plus two equals three. She said this is really very sad. You made more money trading this year then you made the previous year. But this year you were wrong 57% of the time. And people pay you for your ideas. And I’m standing by the notion last year that I told you. You can’t even beat a coin toss. You need to do better. Sweetheart I’m trying.  Third year we sat down. My wife, the accountant, one plus two equals three. She said this is sad. You made more money than you made the previous two years. That’s lovely. I want to stay with you. But Dennis, you were wrong 68% of the time this year. Almost 7 out of 10 of your trades lost money. You have got to do better. I told her Laura I’m trying. I’m gonna try. Fourth year we sat down. My wife, the accountant, one plus two equals three. She said, you know, I get it now. You had the best year you ever had. Made more money this year then you made the previous three years. That’s lovely. This year you were wrong 81% of the time. I think if you can just be wrong 95% of the time. We’re gonna get stinkin’ rich. I think I can do it. I think I have it in my grasp to be wrong.”

“The important notion here being – when you’re wrong, admit it. I try to tell to tell people that in the business of handling money, whether it’s in the business of playing poker, whether it’s in the business of trading, whether it’s in the business of investing, you have two types of capital with which you get to deploy: that which is in your account and mental capital. And I don’t have must mental capital. I’ve lost most of mine. You lose mental capital when you are holding on to losing trades and worst when you’re adding to losing trades. The fact that you are losing money is inconsequential what’s really worst is you are hemorrhaging mental capital. You’re there defending that losing trade. You’re hanging onto that losing position and you’re not going out and deploying what should be excellent mental capital.  You should be using that mental capital to go find other positions. To go put on other trades. To go make other investments. It’s a wonderful experience when you take off that losing trade and get rid of it. It’s liberating. I get liberated 20 times a day. It’s a lovely thing. It’s astonishing how many mistakes I make. So the most important thing I want to get across today, tonight, and for your future and what separates the really great investors from the mediocre and the mediocre from the losers is that the losers always go out in exactly the same way…badly.”

The worst degree a trader can have is in economics and the best one is a liberal arts degree preferably “in psychology” or even religion because  “at any one time, down on the floor the background that seemed to have the most viability was religion. Because there would be 50 people saying ‘Oh good God just let this thing come back and I will never do that again.’ The problem is we are all sinners in the hands of an angry God with a very large margin account and more often than not he’s trying to wreak havoc upon you.”

Gartman’s corollary to “markets can remain irrational longer than you can remain solvent” is “the markets will return to rationality the moment you have been rendered insolvent.”

On Shakespeare:  “You’ll be better trained to deal with the uncertainties that exist in the market and to understand why Hamlet waited so long after finding out that it was his father-in-law that had killed his own father. He had the proof, he knew it was there. And yet the entire play of Hamlet is Hamlet delaying, and delaying and delaying and not acting. That’s what Hamlet is all about. It’s about the inability to make a decision. That’s what trading is all about. It is about the ability to make a decision. Hamlet would have been a terrible trader. Or why did Lear split his kingdom into three parts? What was he thinking? He would have made a terrible trader.”

Here is what the markets are all about:  “The study of human begins dealing with the rational and the irrational. Dealing with rational numbers in an irrational environment. Dealing with irrational numbers in a rational environment. Dealing with irrational numbers in an irrational environment. And trying to make sense out of the chaos. Trying to bring order to the chaos.”

A to Z -Motivational Tips

  
  Education
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■A – Achieve your dreams.

Avoid negative people, things and places. Eleanor Roosevelt once said, “the future belongs to those who believe in the beauty of their dreams.” Consume yourself with the motivation to achieve tremendous results from everything you attempt

■B – Believe in your self, and in what you can do.

Motivation comes from within, if you trust in your abilities you will come out on top.

■C – Consider things on every angle and aspect.

Motivation comes from determination. To be able to understand life, you should feel the sun from both sides. Never say never, there is a way of accomplishing anything if you keep an open mind and never give up.
■D – Don’t give up and don’t give in.
Thomas Edison failed once, twice, more than thrice before he came up with his invention and perfected the incandescent light bulb. Make motivation as your steering wheel. The only way you lose for sure is when you quit.
■E – Enjoy. Work as if you don’t need money.
Dance as if nobody’s watching. Love as if you never cried. Learn as if you’ll live forever. Motivation takes place when people are happy. Maintain a positive attitude under any circumstance. Fill your mind with positive thoughts and the whole world will be your playground.
■F – Family and Friends – are life’s greatest ‘F’ treasures.
Don’t loose sight of them. So often we look past our greatest treasures, remain motivated to always seek the treasures in your family bonds.
■G – Give more than what is enough.

Where does motivation and self improvement take place? At work? At home? At school? When you exert extra effort in doing things. Try to give more than what is asked of you, this shows true self motivation.

■H – Hang on to your dreams.

They may dangle in there for a moment, but these little stars will be your driving force. Dreams keep us motivated to go after the things that excite us in life. Holding onto your dreams shows a strength in your character of positive expectations. (more…)

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