Archives of “conviction” tag

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8 Trading Psychology Quotes

  
  Education
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Your biggest enemy, when trading, is within yourself. Success will only come when you learn to control your emotions. Edwin Lefevre’s Reminiscences of a Stock Operator (1923) offers advice that still applies today.

  1. CautionExcitement (and fear of missing an opportunity) often persuade us to enter the market before it is safe to do so. After a down-trend a number of rallies may fail before one eventually carries through. Likewise, the emotional high of a profitable trade may blind us to signs that the trend is reversing.
  2. PatienceWait for the right market conditions before trading. There are times when it is wise to stay out of the market and observe from the sidelines.
  3. ConvictionHave the courage of your convictions: Take steps to protect your profits when you see that a trend is weakening, but sit tight and don’t let fear of losing part of your profit cloud your judgment. There is a good chance that the trend will resume its upward climb. (more…)

Trading commandments

  
  Education
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ten_commandments1.) Respect the price action but never defer to it.

Our eyes are valuable tools when trading, but if we deferred to the flickering ticks, stocks would be “better” up and “worse” down. That’s backward logic.

2.) Discipline trumps conviction.

No matter how strongly you feel on a given position, you must defer to the principles of discipline when trading. Always try to define your risk and never believe you’re smarter than the market.

3.) Opportunities are made up easier than losses.

It’s not necessary to play every day; it’s only necessary to have a high winning percentage on the trades you choose to make. Sometimes the ability not to trade is as important as trading ability.

4.) Emotion is the enemy when trading.

Emotional decisions have a way of coming back to haunt you. If you’re personally attached to a position, your decision-making process will be flawed. Take a deep breath before risking your hard-earned coin. See related link.

5.) Zig when others zag.

Sell hope, buy despair and take the other side of emotional disconnects. If you can’t find the sheep in the herd, chances are you’re it. (more…)

Control Your Emotions

  
  Education
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1. Caution.

Excitement (and fear of missing an opportunity) often persuade us to enter the market before it is safe to do so. After a down-trend a number of rallies may fail before one eventually carries through. Likewise, the emotional high of a profitable trade may blind us to signs that the trend is reversing.

2. Patience.

Wait for the right market conditions before trading. There are times when it is wise to stay out of the market and observe from the sidelines.

3. Conviction.

Have the courage of your convictions: Take steps to protect your profits when you see that a trend is weakening, but sit tight and don’t let fear of losing part of your profit cloud your judgment. There is a good chance that the trend will resume its upward climb.

4. Detachment.

Concentrate on the technical aspects rather than on the money. If your trades are technically correct, the profits will follow.

Stay emotionally detached from the market. Avoid getting caught up in the short-term excitement. Screen-watching is a tell-tale sign: if you continually check prices or stare at charts for hours it is a sign that you are unsure of your strategy and are likely to suffer losses.

5. Focus

Focus on the longer time frames and do not try to catch every short-term fluctuation. The most profitable trades are in catching the large trends. (more…)

Beliefs of Winning Traders

  
  Education
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Winners share certain behaviors and beliefs.  Check to see if you possess the traits and beliefs of winning traders

1. My trading objectives are perfectly clear, and I truly believe I will achieve these goals. If you have the belief that you will win, you increase your chances of trading to win.  In order to have this level of conviction, you must have a thoroughly-tested plan.  You also must have a clear vision of how you will proceed with your plan to reach your goal.  The more detailed you can visualize your goals being achieved, the more you will strengthen your internal belief and confidence that you will reach your goals.

2. I have created a plan to achieve my trading goals. I’m sure you’ve heard the saying “I didn’t plan to fail; I failed to plan.”  Without a plan, your results will tend to be mixed and uninspiring.  Commit to writing down your trading plan, and make sure you can answer the questions found in a recent TrendWatch on creating your trading plan.

3. I prepare my plan before the trading day starts. If you don’t have a plan of action once the trading bell rings, you are moving from the proactive mentality into a reactive approach.  I contend that the more reactive you become, the more you will get in late to market moves and dramatically diminish your reward-to-risk ratio. I prepare after the close for the next day’s trading, seeking to stay proactive and a step ahead of the rest of the crowd.

4. I regularly monitor my trading results to measure my progress toward my goals. Trading results tend to follow a zig-zag approach similar to how a plane is guided to its destination.  At periodic steps along the way, if a pilot is off course, they will set a new course towards the target.  This is called course correction.   Once you have defined your trading target, your periodic evaluation should lead you to assess what is taking you off course and encourage you to make the necessary corrections to get you back on target. (more…)

Dhirubhai Ambani's W-I-L-L

  
Education, Humour
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mu-cash-anil
quotes
“I am deaf to the word “no”.”
“Think big, think fast, think ahead. Ideas are no one’s monopoly”
“You do not require an invitation to make profits.”
“If you work with determination and with perfection, success will follow.”
“Pursue your goals even in the face of difficulties, and convert adversities into opportunities.”
“We bet on people.”
“Meeting the deadlines is not good enough, beating the deadlines is my expectation.”
“Don’t give up, courage is my conviction.”
“We cannot change our Rulers, but we can change the way they Rule Us.”
My Hot Favourite quotes are :Number 1 ,6 and last.
Just comment if possible.
Updated at 28th August/Baroda

The 15 Truths about Great Trading

  
  Education
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 1) 45-55% (Average winning % of any given trader)

 2) Traders do not mind losing money, they mind losing money doing stupid things

 3) You can lose money on a Great trade  

4) Focus on the Trade, Not the Money  

5) Trading is a game of Probabilities, not Perfection  

6) Trade to make money, not to be right  

7) Nicht Spielen Zum Spass (if it doesn’t make sense, don’t do it)  

The market does not know how much you are up or down, so don’t trade that way (Think: “If I had no trade on right now, what would I do”)  

9) Learn to endure the pain of your gains  

10) There is no ideal trader personality type  

11) Fear and Fear drive the markets, not fear and greed  

12) Keep it simple: Up-Down-Sideways  

13) Make sure the size of your bet matches the level conviction you have in it (No Edge, No Trade; Small Edge, Small Trade; Big Edge, Big Trade)  

14) Making money is easy, keeping it is hard  

15) H + W + P = E

 a. (Hoping + Wishing + Praying = Exit the Trade!) 

15 Truths about Trading

  
  Education
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1) 45-55% (Average winning % of any given trader)

 2) Traders do not mind losing money, they mind losing money doing stupid things

 3) You can lose money on a Great trade

 4) Focus on the Trade, Not the Money

 5) Trading is a game of Probabilities, not Perfection

 6) Trade to make money, not to be right

 7) Nicht Spielen Zum Spass (if it doesn’t make sense, don’t do it)

 The market does not know how much you are up or down, so don’t trade that way (Think: “If I had no trade on right now, what would I do”)

 9) Learn to endure the pain of your gains

 10) There is no ideal trader personality type

 11) Fear and Fear drive the markets, not fear and greed

 12) Keep it simple: Up-Down-Sideways

 13) Make sure the size of your bet matches the level conviction you have in it (No Edge, No Trade; Small Edge, Small Trade; Big Edge, Big Trade)

 14) Making money is easy, keeping it is hard

 15) H + W + P = E

a. (Hoping + Wishing + Praying = Exit the Trade!)

6 Trading Rules for Traders

  
  Education
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  • Devise a trading plan and follow it. I believe the best trading strategy is the one you’ve been able to review, back test and fits your trading style and risk tolerance. It is important that you know all vitals of the trade (the entries, possible exit targets, and where your stops may be prior to placing your trade orders.) By having a concrete plan, you assist in removing the emotion out of the equation.
  • Stick with the trend!There’s a reason why the cliché “The trend is your friend” exists. It’s because it’s true! Successful traders will always tend to follow the trend when trading. Remember, if you trade with the trend, you have the majority of the market on your side.
  • Control your emotions.This by far is the hardest thing for any trader to do. After all, it has been said that emotional control is 90‐95% of trading and the rest is your strategy. Therefore, I can’t say it enough times… Figure out a way to trade without emotions. To help with this matter, I believe it’s vital that you trade only with capital you can afford to lose. If you are using money that you need to pay your bills, you will almost certainly get emotional about every trade you make. In addition, I found that the more confident you are about your trading strategy, the better the chances are that you can trade with little emotional stress.
  • Record your trades in a trade journal.When I first started trading, I was a bit lax about this concept. But once I started doing recording my actions, I found that I was able to identify my strengths and weaknesses. I take about 30‐45 minutes each day after I’m finished trading for the day to review my trades and to analyze any disconnect from my original plan. This helps me strengthen my conviction of my plan.
  • Never trade unless the signal is clear.There are times when the market can confuse you. For me, confusion is a clear cut signal to keep out of the market. I always want my trades to be high probability signals. My signal has generated a winning percentage of more than 70%. So if I’m uncertain about a signal why would I want to take it, knowing that the chance of it winning is more like a coin toss or less? To me, that is gambling… and I do not consider myself a gambler.
  • Never make trades because you are bored. Sitting on the sidelines waiting for your next trade signal to line up can be very unsettling. Many traders have learned that trading out of boredom can blow out your account in a hurry. For me, trading out of boredom while failing to follow your trading signal is gambling.
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