Archives of “Emergency management” tag

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World Health Organization: Declares coronvirus a public health emergency

  
  Analysis
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WHO declares coronvirus a public health emergency

World Health Organization
  • Declares coronvirus a public health emergency
  • This is not a vote of no-confidence in China
  • does not recommend limiting trade and movement to to China virus outbreak
  • our greatest concern is the potential for the virus to spread to countries with weaker health systems
  • panel almost unanimously concluded that coronavirus is a global emergency
  • China has done tremendous things to limit the spread of the virus to other countries
  • never seen this type of mobilization in my life that that was being executed in China
  • Believes that the measures that China is taking will ‘reverse the tide’
  • On China WHO says ‘I have seen the capacity and I believe they will control this outbreak assumes possible’
Although the declaration of the coronavirus as a public health emergency, the officials from the World Health Organization are gushing about the China response to the virus, it’s containment and seem not to be concerned about the spread in China or in countries that are acting responsibly. Once again the biggest concern is countries with weaker health systems.

The price of of equities spike higher before the announcement then fell back down. We are currently trading near mid range of that volatile range.

Gold is moving off high levels as well currently trades at $1580.37. It is still up $3.70 on the day
In the forex market, the USDJPY has moved above back above its 100 day moving average as the up and downs continue in the pair off of news headlines.

True Nature Of Predicting

  
  Education
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Here’s how it works.

If I make an outrageous prediction or label a prediction outrageous and I am wrong, I respond to criticism like this:

“Well, I said it was an outrageous prediction.”

This discounts my responsibility for being wrong to some degree. But if I am right, I will say,

“look how brilliant I am. I made an outrageous prediction and it was dead on.”

Outrageous predictions are used to manage impressions. One defers responsibility if wrong and gloats incessantly if right.

It is a manipulative gambit.

People, who make outrageous predictions know exactly what they are doing. Their potential reward is much bigger than the risk they are taking of being publicly laughed at. Many people have made a career by being right once about a major event that nobody expected (usually a big market correction).

Predicting and speculating have a lot in common, but they are also very different. By definition, predictions are about dealing with factors, you have no control over. When you speculate in the stock market, you also don’t have control over which one of your trades will be profitable and for the most part how profitable it will be. You could improve the odds, but you can’t impact the outcome of each individual trade. When you speculate, you put your own money at risk. You could be right for the wrong reasons and make money (lucky). You could also be wrong despite having an edge and still lose money (no approach has 100% success rate). Since you have very little control on some of the variables that impact your results, it doesn’t really make sense to speculate about only one outcome, because in this case you are getting prepared for only one outcome. The solution – You develop several different scenarios and you prepare for each of them.

A) You could be wrong

  • where is your stop loss?
  • How much of your capital are you going to risk?

B) You could be right (more…)

Thought on Risk

  
  Education
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Risk ManagementRisk is a very negative word for many, but as a trader you have to face financial risk (even ruin for some kamikaze traders) every day. But to make a living trading stocks you have to face risk in a bold way. IMO, the greatest opportunity for success goes to those who are not afraid of taking risks and at the same time managing risk in a proper way (and knowing excessive risk may lead to total ruin). By that you have to analyze risk in accordance to potential reward and to feel a little bit of fear. Success may come to those without fear, but many of the fearless have fallen by the wayside (and we never hear about them).

Actually, the biggest risk is not taking any risk! If you want to make money trading, you have to take risk. There is no way you will make money by being risk-averse.

That also means not afraid of looking stupid. Remember that learning is inhibited by caution and experimentation. Children who are afraid will never learn. Children with totally risk-averse parents will struggle in an uncertain world.  Children are in general not afraid of looking stupid and they are therefore much more adaptive than adults. Just look at how easy they learn a new language. (more…)

Techniques to Control risk and Increase Safety

  
  Education
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  • Before taking a position, know the amount you are willing to lose. -Marty Schwartz
  • If a stock drops 7% below my purchase price, I will automatically sell at the market–no second guessing, no hesitation.  -William O’Neil
  • You should always have a worst case point.  The only choice should be to get out quicker. -Richard Dennis
  • I have a mental stop.  If it hits that number, I am out no matter what. -Paul Tudor Jones
  • Combine that long-term objective with a protective stop that you move as the position goes your way. -Gary Bielfeldt
  • I set protective stops at the same time I enter a trade.  I normally move these stops to lock in a profit as the trend continues.  -Ed Seykota
  • Risk management is the most important thing to be well understood.  Under-trade, under-trade, under-trade is my second piece of advice.  Whatever you think your position ought to be, cut it at least in half.  My experience with novice traders is that they trade three to five times too big. -Bruce Kovner
  • Why risk everything on one trade?  why not make your life a pursuit of happiness rather than a pursuit of pain? -Paul Tudor Jones
  • Never risk more than 1% of your total equity on any one trade.  By risking 1% I am indifferent to any individual trade.  Keeping your risk small and constant is absolutely critical. -Larry Hite
  • The key is to lose the least amount of money when you are wrong. -William O’Neil
  • You have to minimize your losses and try to preserve capital for those few instances where you can make a lot in a very short period of time.  What you can’t afford to do is throw away your capital on suboptimal trades. -Richard Dennis
  • Most traders have a tendency to take risks that are too large at the beginning.  They tend not to be selective enough when they take risks. – Gary Bielfeldt
  • The object is always to minimize your risk. -Tom Baldwin
  • No matter what happens, I know my worst case.  My loss is always limited. -Tony Saliba
  • You might have a low-risk trade, but if you are afraid, you probably will not take it.

 

One Liners For Traders

  
  Education
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  • Let winners run. While momentum is in phase, the market can run much further than might be expected.
  • Corollary to that rule: Do not exit winners without reason!
  • Be quick to admit when wrong and get flat.
  • Sometimes a time stop is the right solution. If a position is entered, but the anticipated scenario does not develop then get out.
  • Remember: if one thing isn’t happening the other thing probably is. Historically, this has never been good for me…
  • Be careful of correlations. Several positions can often equal one large position bearing unacceptable risk. Please think.
  • I am responsible for risk management, money management, trade management, doing the analytical work and putting on every trade that comes.
  • I am not responsible for the outcome of any one trade. Markets are highly random. I do not have a crystal ball. I am not as smart as I think I am.
  • Risk management is the first and last responsibility. I can make almost any mistake and be ok as long as I do not violate my risk management parameters.
  • Opportunity comes every day. Do not neglect the work. Must do analysis every day.
  • Opportunity comes every day. Get out of poor positions. Move on.
  • I am a better countertrend trader than a trend trader. Sometimes the crowd is right, and they will run me over at those times if I’m not quick to admit I’m wrong.
  • If you’re going to do something stupid, at least do it on smaller size.

How did we end up with two, different definitions of risk?

  
  Education
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When I say “risk” and you say “risk,” chances are high we don’t mean the same thing.

The finance industry defines risk as something measurable. It is variability within a set of known limits. You may have heard it referred to as standard deviation or even volatility. Ultimately, it represents how much an investment wiggles over time.

I’m an adviser who talks to humans. I also happen to be human. From my experience, I know humans outside the financial world define risk differently. In everyday life, we tend to think of risk as uncertainty, or what is left over after we have thought of everything else.

With uncertainty comes variability within a set of unknown limits. It’s the stuff that comes out of left field, like Nassim Nicholas Taleb’s black swan events. Because we can’t measure uncertainty with any sort of accuracy, we think of risk as something outside our control. We often connect it to things like running out of money in retirement or ending up in a car crash.

But how did we end up with two such completely different definitions of the same thing? My research points to an economist named Frank Knight and his book “Risk, Uncertainty and Profit.”

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THE TWELVE HABITUDES

  
  Education
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A successful trader:

  1. Has a commitment to trading and comes prepared to trade.
  2. Is detached from the results. He thinks in terms of process and believes in the validity of the process.
  3. Is willing to accept loss.
  4. Is at ease with controlled risk.
  5. Thinks in terms of probabilities.
  6. Is comfortable with uncertainty.
  7. Takes the long term view.
  8. Has an attitude of abundance.
  9. Is optimistic.
  10. Has an attitude of open-mindedness and clarity of thought and perception.
  11. Has an attitude of courage. She is willing to act in the face of uncertainty and possible loss.
  12. Is disciplined. Discipline is putting into action those behaviors which need to be done to get you to your goals.

Habitude 1: Preparedness

  • A successful trader trains his mind for high power trading. If he needs a coach or mentor, he gets one. He takes the time for meditation, self-suggestion and positive visualization. He learns helpful questions to ask himself. He does whatever it takes to prepare himself mentally to trade.
  • Set goals
    • Put your goal into words. Form a sentence that is specific, simple, short, positive, in the present tense, and achievable.
    • Make a mental movie of yourself with the goal achieved.
    • Step into the movie and live it and feel it as if it is already true.
    • Design the steps necessary to take to get to the goal.
    • Commit yourself to doing the steps and make a timetable to do them. (more…)

Ten Tasks of Top Traders

  
  Education
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  1. Daily self analysis:   Successful trading is 40% risk control and 60% self-control.
  2. Daily mental rehearsal:   Practice being disciplined in your mind before you trade daily.
  3. Developing a low risk idea:   Trade with the odds on your side with a defined risk.
  4. Stalking:   Wait for the entry. Utilize patience and don’t pull the trigger to soon.
  5. Action:   Take the entry when the signal is hit. Do not freeze up. Be definitive.
  6. Monitoring:   Keep an eye on what is happening with your position.
  7. Abort:  Be ready to cut your losses, when you are wrong and hit your stop loss.
  8. Take profits:  Use trailing stop or profit target when one is hit. Allow the market to take you out.
  9. Daily briefing:   Think through your trading & what you did right/wrong based on your trading plan.
  10. Periodic review:   Is your trading working? Do adjustments need to be made?

The Three pillars of trading

  
  Education
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Money Management: You must make your trades as fixed as possible. Trade with the same risk, capital, units, percentage, and in the same type markets to manage risk most effectively.

Methodology: Choose a method that works for you and your personality. (Dow Theory, technical indicators, patterns, price and volume, etc) Once you have a methodology to your trading, test it in the real world, in real time, either with micro trades or paper trade. You need a sample size to judge its efficacy.

Trader Psychology: Manage your hope, greed, fear, and pain to stay in the game.

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