Trading can be an expression of self esteem; it cannot substitute for a self. To change yourself is noble, but only shattered dreams come from efforts to change your self. You will succeed by becoming more of the person you are at your best, not by overreaching in vain hopes of transformation.
Archives of “dreams” tag
rssKeep perspective
IF you can keep your head when all about you
Are losing theirs and blaming it on you
If you can trust yourself when all men doubt you
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools: (more…)
Winning Traders -Never Quit
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1. They accept losing trades quickly but it does not define them, they learn and try again. This trade more wise than the last one. 2. They compartmentalize emotions by not blaming themselves but understanding the historical expectancy of their systems returns. 3. They have a bias toward action by constantly doing things that move them closer to their goal of being a rich trader. (Homework, chart study, reading, being mentored, back testing) 4. They change their minds sometimes, they know when to stop doing something that does not work and move in the direction of trading success through new lessons. 5. They prepare for things to go wrong through risk management an position sizing instead of just going naively toward their goals they are ready to make adjustments as needed. 6. They’re comfortable with discomfort, they will accept losses and draw downs in their method, they are willing to pay tuition to the markets to get to where they want to be. 7. They’re willing to wait, they patiently improve each day setting themselves up for those winning trades that will be very profitable in the future. 8. They have trading heroes that inspire them to be better than they are now and give them the hope of achieving their dreams. 9. They have more than passion they are on a mission, their desire for success gives them the drive to not quit until they win. 10. They know only time separates them from their goals of wealth. |
Justin Mamis – When To Sell
How Professionals Minimize Losses page 73-75:
Blaming ‚them’ is a psychologically and socially acceptable way to avoid blaming oneself. Yet professionals can, and do, make mistakes. When they buy a stock and it doesn’t go up (even if it doesn’t go down) that’s wrong enough for them, simply because it did not perform as expected. The pro reasons that the stock went against his judgement, so he sells it. And he doesn’t expect to be perfect, any more than a professional baseball player expects to bat 1.000. Knowing that losses are inevitable, he seeks to minimize them at all times. To be sure, his ability to take a small loss is enhanced by the benefit of not having to reckon with commission costs, but even so, if he were relatively incompetent he wouldn’t last long in the business; the loss might be less, or slower to pile up, but the return on invested capital would be dismal enough eventually to send him to another field.
Rule One of the professional trader is: When a stock doesn’t do what you expect it to do, sell it. (more…)
The C=L U=M Principle
Most people like to stay within a range of relative comfort; a range that is self imposed. This is known as your comfort zone. For most of us, the grand majority of our experiences and daily life’s routines are within the limits of what we already know; the boundaries that we set, the fence that we build around us to feel safe.
We tend to ignore the outer limits of this circle of comfort almost all of the time. The unknown is a scary proposition for most. The CLUM principle simply states that COMFORTABLE = LESS OPPORTUNITY ANDUNCOMFORTABLE = MORE OPPORTUNITY; C=L U=M
The simple fact is: opportunity is in the areas that few are willing to venture. In the circle of humanity, you’re part of the circle. And, in order for you to take advantage of inefficiencies in the so-called system, you must go outside the system. You must, at some point, be a lone wolf. This requires you to be a little different than the “norm.” (more…)
Dream world of the compulsive gambler
This is a question that is standard in all the Gamblers Anonymous websites around the world. Reading this can be a shocking reminder of how close to the edge trading can be to gambling. We really need to know what the difference is. Are you a trader or a gambler? Notice once again it is pychology that means the difference, and not just following a system. Many gamblers have a system. Read on:
What is the dream world of the compulsive gambler?
This is another common characteristic of compulsive gamblers. A lot of time is spent creating images of the great and wonderful things they are going to do as soon as they make the big win. They often see themselves as quite philanthropic and charming people. They may dream of providing families and friends with new cars, mink coats and other luxuries. Compulsive gamblers picture themselves leading a pleasant and gracious life, made possible by the huge sums of money they will accrue from their “system”. Servants, penthouses, nice clothes, charming friends, yachts and world tours are a few of the wonderful things that are just around the corner after a big win is finally made. Pathetically, however, there never seems to be a win big enough to make even the smallest dream come true. When compulsive gamblers succeed, they gamble to dream still greater dreams. When failing, they gamble in reckless desperation and the depths of their misery are fathomless as their dream world comes crashing down. Sadly, they will struggle back, dream more dreams and of course suffer more misery. No one can convince them that their great schemes will not someday come true. They believe they will. For without this dream world, life for them would not be tolerable.
Trading Wisdom – Trend Following
For most people, trend following is extremely counter-intuitive. Why? Because it’s human nature to look for bargains before buying. People tend to buy when it’s low and sell when it’s high. But, how many are bold enough to do the opposite by buying high and selling even higher? My guess is; not many. And what about risk management? Yeah, what about it? Remember the dot com bubble era? Out of all the people that got caught up in that frenzy, how many do you think even had a risk management plan in place? Hmmm…
Back in those days, I’ve never even heard of a stop loss. We all just jumped in blindly with dreams of making it big. And a lot of us got burned. Really bad. All the warning signs where there and yet we chose to ignore it. We foolishly rode our stocks all the way down and in the process, destroying every little glimmer of hope that we had for a turn-around. A lot of us lost 80-90% of our so-called “long term investment.” It’s tragic. But we can all learn from this valuable lesson.
Trend following is a life philosophy. It works in trading and it also works in daily life. It’s simply a matter of sticking with what works and getting rid of what’s not. That’s it! It’s a deceptively simple little system that can be applied into all aspects of your life. And if you follow this line of thought, I guarantee that you will see dramatic improvements. You just can’t help but to get better because ultimately, what are you left with in the end? That’s right, WINNERS!
HOW TO LOSE MONEY IN THE STOCK MARKET
According to Mark Douglas…
In any particular trade you never really know how far prices will travel from any given point. If you never really know where the market may stop, it is very easy to believe there are no limits to how much you can make on any given trade. From a psychological perspective this characteristic will allow you to indulge yourself in the illusion that each trade has the potential of fulfilling your wildest dream of financial independence. Based on the consistency of market participants and their potential to act as a force great enough to move prices in your direction, the possibility of having your dreams fulfilled may not even remotely exist. However, if you believe it does, then you will have the tendency to gather only the kind of market information that will confirm and reinforce your belief, all the while denying vital information that may be telling you the best opportunity may be in the opposite direction.
There are several psychological factors that go into being able to assess accurately the market’s potential for movement in any given direction. One of them is releasing yourself from the notion that each trade has the potential to fulfill all your dreams. At the very least this illusion will be a major obstacle keeping you from learning how to perceive market action from an objective perspective. Otherwise, if you continually filter market information in such a way as to confirm this belief, learning to be objective won’t be a concern because you probably won’t have any money left to trade with (italics mine).
8 Ways to be great
First Principle: Find Your “Why?”
“The reason most people go through life with big dreams but fail to achieve them is because they ask themselves “how” before they know their “why”(9).
Second Principle: Get To Know Yourself
“The perfect trader-if such a person exists-is methodical and careful about making decisions, extremely disciplined, resilient to setbacks, with a high degree of internal confidence. He holds strong opinions but is also able to admit quickly when he is wrong, not take it personally, and view it as a learning opportunity rather than a failure. He understands the value of leaving his ego at the door. He’s willing and able to trust his gut and place big bets when the opportunity presents itself. In fact, that pretty well describes the ideal blend of characteristics of any successful person, no matter what he is doing professionally or personally” (18-19).
Third Principle: Learn To Love The Process
“The best traders don’t think about how many millions they need to make each year. They focus on making the best trading decision they can with each trade they make. And if there isn’t a good trading opportunity right now, they have the discipline to do nothing and just wait. Concentrating on one trade at a time is their process” (38).
Fourth Principle: Sharpen Your Edge
“Gaining a competitive advantage is like having a two-edged sword, and you need to keep both of them sharp. On edge is internal-knowing what unique skills you bring to the table. The other is external and comes from gathering knowledge that makes it more likely you’ll succeed” (45). (more…)
Illusion
Trading can be an expression of self esteem; it cannot substitute for a self. To change yourself is noble, but only shattered dreams come from efforts to change your self. You will succeed by becoming more of the person you are at your best, not by overreaching in vain hopes of transformation.