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Is Trading All About Luck? – #AnirudhSethi

  
Analysis, Education
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Luck of the Draw? There's a Lot More to Trading and I... - Ticker TapeOne of the biggest misconceptions about trading is that it is all just luck. Is trading really just a game of chance? Is there any way to improve your odds? The answer is no, and yes. Trading isn’t all about luck because you can make intelligent decisions on what trades to take, but at the same time not every trade will be successful. You have to accept failure in order to succeed.

##The idea of luck is a misconception:

The idea of luck is a misconception. It’s not about who has the most money, or even who knows what they are doing…it’s all about how your brain handles risk and reward in our complex world.

Do you know that research shows we make more impulsive decisions when stressed out? Stress may be one cause for some people to have an increased vulnerability to gambling addiction. This doesn’t sound like much fun! Some other factors which can increase susceptibility to gambling addiction include poverty, social isolation, prior mental illness, access to addictive substances such as alcohol or drugs, and family history of addictions (including “dipsomania”).

A study published in the Journal of Gambling Studies found that gamblers with a family history of addiction were more likely to have worsened gambling symptoms than those without such a history.

People who are addicted might not be able to control their behaviors and they may experience cravings for the activity – even if it’s harmful or dangerous. This is where trading all about luck comes in! If you can take your emotions out, then this will give you an edge over other traders on Wall Street. Is Trading All About Luck?

It’s possible some people just aren’t wired right when it comes to making decisions under duress which would explain why these people seem “luckier” at times – but luckily doesn’t mean there isn’t skill involved as well!

##Trading is about managing risk and being disciplined: (more…)

The Richest Man in Babylon Rules

  
Analysis, Education
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the richest man in babylonThe Richest Man in Babylon is a great little personal finance book set as an ancient fictional tale that explains the ‘The Seven Cures to a Lean Purse’ and ‘The Five Rules of Gold’.

The Seven Cures to a Lean Purse:

  1. Start thy purse to fattening. Pay yourself first. Save money before you pay any bills.
  2. Control thy expenditures. Don’t spend every penny you make or you will be broke no matter how high your income becomes.
  3. Make thy gold multiply. Invest capital in assets that go up in value.
  4. Guard thy treasures from loss. Your number one priority is to keep your investment capital safe from loss.
  5. Make of thy dwelling a profitable investment. Buy a home in the right location as a hedge against inflation and to create equity and ownership over the long term.
  6. Insure a future income. Convert your earned income into assets that can create future case flow.
  7. Increase thy ability to earn. Grow your earning power through education, building skills, gaining experience in a field, or promotions to higher levels of responsibility.

The Five Laws of Gold:

  1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family. Save 10% of your income each time you are paid and convert it to investment capital.
  2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. Invest your capital for growth and compounding.
  3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling. Find a successful model or system to copy for investing your money.
  4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep. Never put money in something you don’t fully understand.
  5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. This fastest way to go broke is to try to get rich quick.

Extension & Retracement patterns

  
  Education
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  • Extension patterns are Bullish Butterfly, Bearish Butterfly, Bullish Crab and Bearish Crab.
  • Retracement patterns are Bullish Gartley, Bearish Gartley, Bullish Bat and Bearish Bat.

These are the patterns that I used, and the list is not exhaustive. The “hardcore” harmonic traders might look at more patterns such as 5-0, Shark etc and in more time frames.

So here are the key factors I am looking at when using harmonic patterns

  • Identify key market levels, in other words, key support resistance levels. This one of the MOST important step.
  • Identify established price channel. A channel also represent the current trend, applying the appropriate patterns to follow the trend.

EXTENSION PATTERNS
 

RETRACEMENT PATTERSNS

Technically Yours/ASR TEAM/BARODA

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