A graph here via this link, shows the rapid escalation:
Check out the link for a little more detail …
- The upcoming tariff changes are large and swift.
US-China trade war is getting much worse. How much worse? Check out this pic.
Archives of “conflict” tag
rss42 Ways To Trade Like A Market Wizard
What if you could read the principles for success for some of the world’s greatest traders? Well you can, here is how author Jack Schwager summed up the the similarities of the ‘Market Wizards’ he spent years interviewing in his second book.
The following is a summarized excerpt from Jack D Schwager’s book, The New Market Wizards. I highly recommend this book for all active traders.
- First Things First
You sure you really want to trade ? It is common for people who think they want to trade to discover that they really don’t. - Examine Your Motives
Why do you really want to trade ? Did you say excitement ? Then don’t waste your money in market, you might be better off riding a roller coaster or taking up hand gliding.
The market is a stern master. You need to do almost everything right to win. If parts of you are pulling in opposite directions, the game is lost before you start. - Match The Trading Method To Your Personality
It is critical to choose a method that is consistent with your your own personality and conflict level. - It Is Absolutely Necessary To Have An Edge
You cant win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one. - Derive A Method
To have an edge, you must have a method. The type of method is not important, but having one is critical-and, of course, the method must have an edge. - Developing A Method Is Hard Work (more…)
Five Market Scenarios
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Shut Up and Listen
Being reactive to actual price action instead of predictive of what price action will be is a winning principle I have seen in many rich traders. Letting price action give you signals is trading reality, trading your beliefs about what price ‘should be’ is wishful thinking.
Great traders are bullish in bull markets and bearish in bear markets, until the end when the trend bends.
These two rules or habits simply aren’t being utilised, either because people don’t know them, or think they’re better than them.
Let me tell you this – no-one is better than the rules. And the traders that have been ignoring them are feeling this right now where it hurts.
I know of professionals who are quitting over what the market has been doing recently. I know of professionals who are at breaking point – literally a nervous wreck because they cannot fathom that the market will go higher….and yet it does.
If you don’t follow these two rules, you will never flow with the market. You will constantly be in conflict; constantly fighting and stubbornly protecting your ‘rightness’, and you will never be in tune with what the market is saying.
These two rules can be neatly summed up in one sentence.
Shut Up and Listen.
Stop talking. Stop thinking. Just listen to what the market is telling you.
11 Biases That Affect Traders
Overconfidence
As the name suggested, it is the irrational faith in one’s skills, methodology or beliefs. For example, you see a certain chart pattern and make a maximum leveraged trade, even though you understand that any chart pattern cannot predict market with certainty. Trading excessively after a winning streak also shows overconfidence.
Cognitive Dissonance
It means finding excuses for something which makes you ‘uncomfortable’. For example, jumping from one indicator to another when you face losing trades; or continuing to trade in stock even your trading methodology does not gives you a positive expectancy.
Availability Bias
It means being biased to information which is readily and easily available. For example, people begin to trade using RSI without understanding the internal relative strength; that is, RSI is most talked about on forums so start using them without rationally researching it. Being affected from attractive advertisement or intelligent sounding articles (including this one!) without due diligence also signifies availability bias.
Self-Attribution Bias
It means giving yourself unwarranted praise for outcomes which may just be an outcome of chance. For example, people make money in a bull market through buy and hold and start begin to believe on their trading acumen rather than the market regime which favors their trading style. (more…)
Confidence, Discipline and Consistency
While day-trading is a great way to make a living when you are consistently profitable, it can also be the worse career choice if you consistently lose. Continue forward with system development, or working towards effective risk management, money management, or mastery of your trading psychology. Trading psychology means the big 3: discipline, confidence and consistency.The trading psychology takes precedence because it is needed to make sure that the other two are followed.
It takes a skilled trader to understand execute all of the things that are needed to be successful and earn a significant amount of profit doing this alone. Money Management is essential to preserve your trading capital and is simply a set of rules that governs how much money you have at risk. Take control of your trading Psychology and adhere to strict discipline in trading your developed and refined Trading System.
Building confidence on the system is extremely important as that is the only reason why you stick to the system during bad times. Day trading requires focus and discipline on the part of the trader with a high degree of risk tolerance since losing trades are numerous. (more…)
The importance of emotion in trading.
Anxious: Am I prepared? Can I afford to lose what I am risking? Am I breaking my rules? Did I drink too much caffeine?
Anger: Have I not moved from the last trade? Am I tired? Is there conflict in my personal life?
Happiness: Are psychological gains more important than monetary gain? Am I overconfident?
Indifference: Do I care? Is something more important?
It is natural to feel emotion but in an appropriate and proportional way.
Anxious:
To this day, the first trade always produces a little anxiety. That little tingle in your stomach and shallow breathing. The same is true when I a trade I have been waiting for sets up. Above that, I know there is something wrong.
Anger and Happiness:
I am angry after a negative outcome and happy after a positive outcome but in order to adapt more quickly I have to remove emotion from the outcome as soon as possible. It is more important to focus on what happened and less how I feel about it. Prolonged feelings of anger or happiness causes risk blindness and impedes my learning. Misjudging risk will prevent me from taking a trade or taking too much risk. (more…)
Five market scenarios that place you at the most risk.
- 1.Bad Markets – A good pattern won’t bail you out of a bad market, so move to the sidelines when conflict and indecision take hold of the tape. Your long-term survival depends on effective trade management. The bottom line: don’t trade when you can’t measure your risk, and stand aside when you can’t find your edge.
- Bad Timing – It’s easy to be right but still lose money. Financial instruments are forced to negotiate a minefield of conflicting trends, each dependent on different time frames. Your positions need to align with the majority of these cycles in order to capture the profits visualized in your trade analysis.
- Bad Trades – There are a lot of stinkers out there, vying for your attention, so look for perfect convergence before risking capital on a questionable play, and then get out at the first sign of danger. It’s easy to go brain dead and step into a weak-handed position that makes absolutely no sense, whether it moves in your favor or not. The bottom line: it’s never too late to get out of a stupid trade.
- Bad Stops – Poor stops will shake you out of good positions. Stops do their best work when placed outside the market noise, while keeping risk to a minimum. Many traders believe professionals hit their stops because they have inside knowledge, but the truth is less mysterious. Most of us stick them in the same old places.
- Bad Action – Modern markets try to burn everyone before they launch definable trends. These shakeouts occur because most traders play popular strategies that have been deconstructed by market professionals. In a sense, the buy and sell signals found in TA books are turned against the naïve folks using them.
Wisdom from Market Wizards
Tony Saliba
“How do you lose money? It is either bad day trading or a losing position. If it’s a bad position that is the problem, then you should just get out of it.”
“Clear thinking, ability to stay focused, and extreme discipline. Discipline is number one: Take a theory and stick with it. But you also have to be open-minded enough to switch tracks if you feel that your theory has been proven wrong. You have to be able to say, “My method worked for this type of market, but we are not in that type of market anymore.”
“Until recently, I set goals on a monetary level. First, I wanted to become a millionaire before I was thirty. I did it before I was twenty-five. Then I decided I wanted to make so much a year, and I did that. Originally, the goals were all numbers, but the numbers are’t so important anymore. Now, I want to do some things that are not only profitable, but will also be fun.”
Dr Van K. Tharp
“The composite profile of a losing trader would be someone who is highly stressed and has little protection from stress, has a negative outlook on life and expects the worst, has a lot of conflict in his/her personality, and blames others when things go wrong. Such a person would not have a set of rules to guide their behaviour and would be more likely to be a crowd follower. In addition, losing traders tend to be disorganized and impatient. Thet want action now. Most losing traders are not as bad as the composite profile suggest. They just have part of the losing profile.” (more…)
Mental Toughness
The mental part of the game. Its an aspect of trading that can easily be ignored, we all choose how we approach this game. Some see failures as opportunities to learn and progress, while others see them as outright failures and road blocks which should be avoided at all costs. Its all about attitude.
I feel that trading should be ‘easy’ It should be effortless and without conflict. If we are going to be in this game for 20+ years. I feel its important to make the experience as easy as we can. We shouldn’t be ‘fighting’ with the market, in the boxing ring, hoping, fearing and stressing.
There is RISK management, but SELF management is equally as important. When we are actively trading the market, we are free to make buy and sell decisions whenever we want. The tough part is consistently making the correct buy/sell decisions. These decisions come with conflict!
Taking Profits
So this is the hardest part of trading. It can be made simple if we accept a few hard facts.
1. You will never sell at the top.
2. Your going to be wrong when you sell.
This is fact. As soon as you sell, the stock will probably keep going up. You may look at it 5 months later and its up 100% since you sold it. Point is, when you sell, your probably going to be wrong. This creates a conflict.
As humans, we do not want to be wrong. We seek perfection, we want to nail the top! It can help explain why people run up stocks 20% to watch them come all the way back down to break even. The reason why they did not sell is because they are afraid to be wrong. By selling you are forced to draw a line under your mistake. But being wrong in the stock market is inevitable. (more…)