Archives of “courage” tag

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Traders Daily Lessons

  
  Education
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Have the courage to say no.
Have the courage to face the truth.
Have the courage to do the right thing because it is right.
– W. Clement Stone

An inner dialogue typically reinforces the way you think. So the goal is to consciously expose yourself to thoughts that ultimately will positively impact your trading. Through the use of repetition you can considerably strengthen a positive attitude and sound trading behavior. The beauty of it is the simplicity of the method. It’s entirely up to you which trading mantras you want to adhere to. Here are a few that I strongly believe in and that characterize my thinking as a trader:

  • Kill your greed
  • Isolate yourself from the opinions of others
  • Never chase stocks
  • Always strive for emotional detachment
  • Focus on proper execution
  • There is never a shortage of opportunities
  • Never make excuses
  • Stay in control
  • Don’t compare yourself to others
  • Always use stop losses
  • Standing aside is a position
  • Money comes in bunches
  • Never add to a losing position
  • Stay calm and focused
  • Don’t believe the hype
  • Cultivate independent thinking
  • Be ready for worst case scenarios
  • Nosce te ipsum – Know thyself

Lessons From John Templeton

  
  Education
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1. “I never ask if the market is going to go up or down, because I don’t know, and besides it doesn’t matter. I search nation after nation for stocks, asking: Where is the one that is lowest priced in relation to what I believe its worth?” Like every other great investor in this series of blog posts John did do not make bets based on macroeconomic predictions. What some talking head may say about markets as a whole going up or down was simply not relevant in his investing.  John focused on companies and not macro markets. He was a staunch value investor who once said: “The best book ever written [was Security Analysis by Benjamin Graham].

 2. “If you want to have a better performance than the crowd, you must do things differently from the crowd.  I’ve found my results for investment clients were far better here [in the Bahamas] than when I had my office in 30 Rockefeller Plaza.  When you’re in Manhattan, it’s much more difficult to go opposite the crowd.”  The mathematics of investing dictate that investing with the crowd means you will earn zero alpha, because the crowd is the market.  You must sometimes be willing to take a position that is different from the crowd and be right about that position, to earn alpha. John put it this way: “If you buy the same securities everyone else is buying, you will have the same results as everyone else.” 

 3. “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.  Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria.  People are always asking me: where is the outlook good, but that’s the wrong question…. The right question is: Where is the outlook the most miserable? For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity.”   To be able to sell when people are most pessimistic requires courage.  Being courageous is easier if you are making bets with “house money.” Making bets with the rent money is always unwise.  Templeton believed problems create opportunity. For example, it was on the day that Germany invaded Poland that he saw one of his best buying opportunities since prices were so low and values so high.  Simply telling his broker that day to buy every stock selling under $1 yielded a 4X return for John.  (more…)

Essential Qualities of the Speculator

  
  Education
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1. Self-Reliance. A man must think for himself,
must follow his own convictions. George
MacDonald says: “A man cannot have another
man’s ideas any more than he can another
man’s soul or another man’s body.” Self-trust
is the foundation of successful effort.

2. Judgment. That equipoise, that nice
adjustment of the faculties one to the other,
which is called good judgment, is an essential
to the speculator.

3. Courage. That is, confidence to act on the
decisions of the mind. In speculation there is
value in Mirabeau’s dictum: “Be bold, still be
bold; always be bold.” (more…)

4 Reasons why 90% Traders lose Money

  
  Education
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1)Those who are almost certain to fail in trading do not have the will ,desire or ability to truly be honest with themselves.

2)Most traders who have been unsuccessful do not have the courage to ask for help.

3)Traders who cannot stay humble eventually go down in flames.

4)Traders who cannot forgive themselves eventaully take massive losses ,while never being able to let a winning trade run.

Courage and Trading

  
  Education
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According to Plutarch, “Courage stands halfway between cowardice and rashness…” Clearly, we don’t want to be reckless; and clearly, we don’t want to be hesitant and timid. What we need is a balance. As we go about our trading moderating our greed and our fear to a combination of healthy desire and clear minded caution, we use courage to go forward.

Courage doesn’t mean closing your eyes, holding your nose, and jumping into the deep end. It does mean moving forward with clean and clear perception as well as steadfastness of purpose.

You don’t need courage if you’re totally confident and unafraid. Courage, according to John Wayne, is being scared to death and saddling up anyway. Because people tend to fear the unknown, and the unknown is all that is certain about any given trade, we need to employ courage. Since trading is always new, since anything can happen and it often does, since the wildness lies in wait, we need to overcome uncertainty and fear so that we can appropriately enter, exit, and remain in trades. (more…)

Trading Wisdom

  
  Education
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“You are the sum total of ALL your experiences in life.

And if you discount ANY of them ~ you negate and discount your very ability to be a consistent and successful trader.

So ~ what IS your definition of CONFIDENT?

If we look up the definition of the word “confident” in Roget’s Thesaurus as you know I like to do, we can find the following:

“…believing, undoubting, unhesitating, without a doubt, convinced, satisfied, assured, unafraid, courageous, unscarred, undaunted, daring, venturesome…”

Is that you?  Is that your definition?  Or, is this your definition:

“…hopeful, expecting, try to reassure, hold out hope, make promise to…”

Or do you know?  Right now, if someone were to ask you what your definition of confidence is ~ what would you say?  Right off the top of your head? (more…)

Winston Churchill for Traders and Analysts

  
  Education
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Twenty five quotes from Winston Churchill for traders and financial analysts:

1. I love this war. I know it’s smashing and shattering the lives of thousands every moment — and yet — I can’t help it — I enjoy every second of it. (A letter to a friend, 1916)

2. I pass with relief from the tossing sea of Cause and Theory to the firm ground of Result and Fact. (The Story of the Malakand Field Force, 1898)

3. True genius resides in the capacity for evaluation of uncertain, hazardous, and conflicting information.

4. The truth is incontrovertible. Panic may resent it, ignorance may deride it, malice may distort it, but there it is. (Speech in the House of Commons, May 17, 1916)

5. Success is not final, failure is not fatal: it is the courage to continue that counts. (The Prodigal Project : Book I)

6. It is a mistake to look too far ahead. Only one link in the chain of destiny can be handled at a time. (Speech in the House of Commons, February 27, 1945) (more…)

Truth and Trading

  
  Education
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Recently I’ve been listening to The Teaching Company CD’s while I work out. I was particularly intrigued by a discussion of Meditations by Marcus Aurelius, a Roman Emperor who had always wanted instead to be a philosopher. His philosophy could be summarized in this way: Get out of bed, do your duty, and appreciate things along the way. Not bad.

He believed in certain absolute values for living, and chose the values of Socrates which are truth, justice, courage, moderation, and wisdom.

Asking myself how these values impact trading I came up with some new insights. But first let’s look at how Marcus Aurelius defined these values. Professor J Rufus Fears, who teaches the course on “Books That Have Made History: Books That Can Change Your Life” explained it the following way:

1. Truth: Truth is an absolute value. Some things are true in all places and times. Resisting evil, for example, is always right.

2. Justice: Justice consists of treating others as one would wish to be treated. “Do unto others as you would have them do unto you” summarizes this concept of justice.

3. Courage: Courage means standing up for justice.

4. Moderation: Nothing should be carried to excess.

5. Wisdom: Wisdom enables a person to know what justice is, to recognize when courage is required, and to do what is right.

So how do these values play out in our trading? In this column, let’s explore truth as it applies to your trading. (more…)

Bill Lipschutz-Trading Quotes

  
  Education
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Missing an opportunity is as bad as being on the wrong side of a trade. Some people say (after they have the opportunity to realize a profit) “I was only playing with the market’s money.” That’s the most ridiculous thing I ever heard.

When you’re in a losing streak, your ability to properly assimilate and analyze information starts to become distorted because of the impairment of the confidence factor, which is a by-product of a losing streak. You have to work very hard to restore that confidence, and cutting back trading size helps achieve that goal.

I don’t have a problem letting my profits run, which many traders do. You have to be able to let your profits run. I don’t think you can consistently be a winner trading if you’re banking on being right more than 50 percent of the time. You have to figure out how to make money by being right only 20 to 30 percent of the time.

Successful traders constantly ask themselves: What am I doing right? What am I doing wrong? How can I do what I am doing better? How can I get more information? Courage is a quality important to excel as a trader. It’s not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and stay with it.

It’s very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you’re doing if you’re a successful trader.

So many people want the positive rewards of being a successful trader without being willing to go through the commitment and pain. And there’s a lot of pain.

Avoid the temptation of wanting to be completely right.

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