1. Buying a weak stock is like betting on a slow horse. It is retarded. |
Archives of “complexity” tag
rssGood Traders & Bad Traders
Good Traders
- The good traders that I have met are generous with their time and knowledge.
- Good traders are flexible in their trades and opinions they follow where the market takes them.
- The majority of good traders have simple charts that focus on price action. They focus on the simplicity of what works.
- A good trader will admit a loss and share what happened.
- Good traders are first and foremost traders, any service or product they offer is secondary.
- Good traders are humble and respect the market and the reality of trading.
- Good traders at times will call real trades and post entries and exits.
- Good traders are on social media not for show but for teaching and friendships and having fun.
- Good traders go with the current market trend.
- Those who make a comfortable living trading are playful, joking and happy .
Bad Traders
- Many bad traders try to tear down others to make themselves feel superior. Good traders have no need to do this they have highly self esteems already. (more…)
Trading Opportunities Through Analyzing Baseball
If you got Pennington to find any valuable info when you asked him to develop quantitative analogies between forest life cycles and those of corporations to find some profitable trades you could certainly do the same in finding some numerical formula that could identify trade opportunities by analyzing baseball.
Each team– a stock, the aggregate teams– the market, each player– a corporate division, each salary– an investment made in the division and the company, each relevant performance statistic– a relevant performance statistic. Identify the right decision mix that makes teams perform better over time and improve over time and analyze similarities in companies doing the same.
The greatest liability is also the greatest asset– human decision and performance permeate the game of baseball from start to finish and one could question whether it’s possible to find a truly consistent system as a result. I would argue that this complexity makes it a perfect analogy to market/company performance. It moves based on imbedded and sometimes unexplainable intellect and experience of its participants. The chaotic human decision making process is pervasive in both.
Thirty Trading Rules for Traders
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.
11. Being wrong is a necessary part of trading profitably. Admit when you are wrong.
12. If you do what everyone is doing you will be average, so goes the definition.
13. Information is only valuable if no one knows about it.
14. Lower your risk till you sleep like a baby.
15. There is always a reason why stocks go up or down, we usually only learn the reason when it is too late.
16. Trades that make a lot of intellectual sense are likely to be losers.
17. You do not have to be right more than you are wrong to make money in the market.
18. Don’t worry about the trades that you miss, there will always be another.
19. Fear is more powerful than greed and so down trends are sharper than up trends.
20. Analyze the people, not the stock.
21. Trading is a dictators game; you can not trade by committee.
22. The best traders are the ones who do not care about the money.
23. Do not think you are smarter than the market, you are not.
24. For most traders, profits are short term loans from the market.
25. The stock market can not be predicted, we can only play the probabilities.
26. The farther price is from a linear trend, the more likely it is to correct.
27. Learn from your losses, you paid for them.
28. The market is cruel, it gives the test first and the lesson afterward.
29. Trading is simple but it is not easy.
30. The easiest time to make money is when there is a trend.
Money & Ethics
Money is a symbol of energy and sometimes power. As such it has no real intrinsic value. It is neither good nor bad, positive nor negative … (more…)
The Complexity Curve
The more complexity you add to your trading — by looking at more time frames, indicators, currency pairs, systems, at all hours of the day — the more difficult it becomes to actually implement a profitable trading strategy.
Life and Trading Lessons from Hemingway
As I work on brushing up writing skills for a potential book on my journey as a caregiver to my wife for 30+ months, I happened across a collection of advice for writers Hemingway sprinkled through his correspondence with colleagues over the years. Wisdom for the ages?
Life lesson:
“Listen now. When people talk listen completely. Don’t be thinking what you are going to say. Most people never listen. Nor do they observe. You should be able to go in to a room and when you come out know everything that you saw there and not only that. If that room gave you any feeling you should know exactly what it was that gave you that feeling. Try that for practice. When you’re in town stand outside the theatre and see how the people differ in the way they get out of taxis or motor cars. There are a thousand ways to practice. And always think of other people.”
And for traders as well as writers:
“Dostoevsky was made by being sent to Siberia. Writers are forged in injustice as a sword is forged.”
It makes me think of all the injustices bestowed upon newer traders; complexity, bad prices, one’s own emotional state, the non-obvious inner circle game– the list is endless.
Ari Kiev – The 10 Cardinal Rules Of Trading
The Ten Cardinal Rules
1. Learn to function in a tense, unstructured, and unpredictable environment.
2. Be an independent thinker versus a conventional thinker.
3. Work out a way to handle your emotions and maintain objectivity.
4. Don’t rely on hope and fear in the conventional sense.
5. Work continuously to improve yourself, giving importance to self-examination and recognizing that your personality and way of responding to events are a critical part of the game. This requires continuous coaching.
6. Modify your normal responses to certain events. (more…)
Trading To Win – The Psychology of Mastering the Markets
The Ten Cardinal Rules
1. Learn to function in a tense, unstructured, and unpredictable environment.
2. Be an independent thinker versus a conventional thinker.
3. Work out a way to handle your emotions and maintain objectivity.
4. Don’t rely on hope and fear in the conventional sense.
5. Work continuously to improve yourself, giving importance to self-examination and recognizing that your personality and way of responding to events are a critical part of the game. This requires continuous coaching.
6. Modify your normal responses to certain events.
7. Be willing to face problems, understand them, and recognize that they are in some way related to your behavior.
8. Know when problems can be resolved and then apply methods to solve them. That may mean giving up some control in order to gain a different control. It may mean changes in your personality, learning self-reliance, or giving up independence and ego to become part of a trading team.
9. Understand the larger framework in which trading occurs—how the complexity of the marketplace and your personality both must be taken into account in order to develop the mastery of trading.
10. Develop the right mind-set for trading—a willingness to commit to the kinds of changes in personal habits and beliefs that will drastically alter your life. To do this requires a willingness to surrender to the forces of the game. In order to be able to play at a maximum level, you have to let go of your egoand your need to have things your way.
30 Rules for Traders
- Buying a weak stock is like betting on a slow horse. It is retarded.
- Stocks are only cheap if they are going higher after you buy them.
- Never trust a person more than the market. People lie, the market does not.
- Controlling losers is a must; let your winners run out of control.
- Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
- Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
- Emotional traders want to give the disciplined their money.
- Trends have counter trends to shake the weak hands out of the market.
- The market is usually efficient and can not be beat. Exploit inefficiencies.
- To beat the market, you must have an edge. (more…)