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Be Yourself

  
  Education
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Everyone in this business will tell you how to be and what to do, but the bottom line is that you’ve got to always be yourself – flaws, emotions, stupidity, and all.

There’s a saying that the stock market is an expensive place to figure how who you really are but I completely disagree. Through the many years I’ve been trading, I’ve learned much more about myself and the way I am both good and bad than I think I would have any other way. And, for that I’m so very grateful.

It is with little doubt that my experience in the markets have in turn made me into a much better human being. For example, one who thinks before acting, one that appreciates the importance of looking at situations from different points of view, one that knows that you can do everything right but still be wrong, one that understands the influence that emotion has on decision-making, one that remembers that no matter what mistakes you and I make today – tomorrow we will have another opportunity to do better. I’ve learned a great deal more, but I think you get the point.

Speaking of which, a number of people have asked me recently that if train people to “be more like me” in my mentorship group. The truth is that I try my darndest to never do that. My goal with those who I personally mentor is to help them become who they really are and, by extension, to take full advantage of their own personality and skills whatever they may be and at whatever level they currently are. The primary problem, however, is that many of us really believe the key to success is to be more like others whether it be Warren Buffett, David Einhorn, George Soros, Doug Kass, Jim Chanos, Whitney Tilson, Jim Cramer, or whoever you admire and respect. As you know, one of the fastest growing businesses on the Internet right now is to enable you in new and exciting ways to trade and invest just like others, but in my view, that will only take you so far in your personal journey. In the markets, sooner or later, you have to find your own path!

Each of us have our own skills, strengths, weaknesses and personalities and matching those with a strategy you can use and develop over time is the closest key to your future success that I can help you with.

Bottom line – don’t be like me or anyone else for that matter, but instead just be yourself. Use this time in your life to find ways to take full advantage of your own God-given talents and skills as you develop them. While it is ok and, in fact recommended, that you try to learn as much as you can from others (I know I have), at the same time you must also understand and appreciate that to true key to success is to find your own path just like every trader and investor who you so admire right now has already done.

100 TRADING TIPS

  
  Education
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experience2

1)Nobody is bigger than the market.

 2)The challenge is not to be the market, but to read the market. Riding the  wave is much more rewarding than being hit by it.
 
 3)Trade with the trends, rather than trying to pick tops and bottoms. 
    
 4)There are at least three types of markets: up trending, range bound, and  down. Have different trading strategies for each.
 
 5)In uptrends, buy the dips ;in downtrends, sell bounces. 
    
 6)In a Bull market, never sell a dull market, in Bear market, never buy a dull  market. 

    7)Up market and down market patterns are ALWAYS present, merely one is  more dominant. In an up market, for example, it is very easy to take sell  signal after sell signal, only to be stopped out time and again. Select trades  with the trend. 
  
 
 8)A buy signal that fails is a sell signal. A sell signal that fails is a buy signal. 
   (more…)

Mastering Reward/Risk

  
  Education
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riskrewardMost traders ignore reward/risk ratios, hoping that luck will save them when things start to go bad. 

 This is probably the main reason so many of them are destined to fail. It’s really dumb when you think about it, because reward/risk is the easiest way to  get a definable edge on the market house. 

 The reward/risk equation builds a safety net around your open positions. It’s designed to tell you how much can be won, or lost, on each trade you  take. The secondary purpose is to remove emotion so you can focus squarely on the cold, hard numbers. 

 Let’s look at 15 ways that reward/risk will improve your trading performance. 

 1. Every setup carries a directional probability that reflects a specific pattern. Always execute positions in the highest-odds direction. Exit your trades  when a price fails to respond according to your expectations. 

 2. Every setup has a price level that violates the pattern. Only take trades where price needs to move a short distance to hit this “risk target.” Look the  other way and find the “reward target” at the next support or resistance level. Trade positions with the highest reward target to risk target ratios.  (more…)

A Trading Psychology- 5 Points

  
  Education
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How do you know if your trading psychology problem is really just about trading or is a sign of larger problems? Here is a quick checklist:
A) Does your problem occur outside of trading? For instance, do you have temper and self-control problems at home or in other areas of life, such as gambling or excessive spending?
B) Has your problem predated your trading? Did you have similar emotional symptoms when you were young or before you began your trading career?
C) Does your problem spill over to other areas of your life? Does it affect your feelings about yourself, your overall motivation and happiness in life, and your effectiveness in your work and social lives?
D) Does your problem affect other people? Do you feel as though others with whom you work or live are impacted adversely by your problem? Have others asked you to get help?
E) Do you have a family history of emotional problems and/or substance use problems? Have others, particularly in your immediate family, had treated or untreated emotional problems?
If you answered “yes” to two or more of the above items, consider that you may not be alone. More than 10% of the population qualifies with a diagnosable problem of anxiety, depression, or substance abuse. Tweaking your trading will be of little help if the problem has a medical or psychological root. A professional consultation if you answered “yes” to two or more checklist items might be your best money management strategy.

4 Main Reasons Why Traders Fail

  
  Education
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# They do not understand that the markets are a mirror of life on a chart. Markets are a living thing and reflect crowd behaviour and your own, view of the world. CAVEAT:  How you see yourself and the world is buried deeply in the subconscious part of your mind.

# Traders do to understand their own authentic personality hence they find it hard to settle on a trading style. Know yourself well, it makes THE difference between long term trading success or  failure.

# Traders fail to notice how they transfer the feelings and emotions of  the collective consciousness to their trading believing that their emotions and feelings are their own. Self awareness brings market knowledge, literally.

# Traders have subconscious mental blocks which they supress with superficial positive thinking and learned discipline. We all have blocks, to think that you are the one who has not is dangerous arrogance. Welcome to the experience of oneness!

Difference between Real Traders and the mass

  
  Education
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REAL TRADER1) Trading – Speculating – Gambling – In the eyes of the vast majority, these things are blurred together, and very many things that the herd get up to in the name of “trading” is really either speculating or gambling. To that end, much of the advice published on the subject of trading can equally be as confused.
 
But not to real traders; real traders know the difference and are very clear that what they are doing is neither speculating or gambling. Just because you can know your risk per trade when speculating or gambling does NOT mean you are trading. Every game at the roulette table you can know your risk. Think about that…
 
 
2) Real traders create and trade systems. They follow the rules exactly because they know that to break the rules is to break the fundamental expectation of their system which immediately throws them back into the speculation/gambling camp. Oh by the way, casino owners do not gamble; they trade. Think about that too…
 
 
3) True systems can be rigorously forward and back tested and withstand shifts in the market, or at least behave more or less as expected as the market switches between trending and non-trending, high volatility and low volatility.
 
 
4) Real traders take every trade, even when their systems are getting a hammering. Why? Because they know that the next trade could be the turn around, and that their system can weather the storm. Again, to tinker with the system is to immediately be back to speculating and gambling.
 
 
5) All systems experience drawdown. Real traders know this, and they weather it without emotion. You can be flat or in drawdown for an extensive period, but they keep on following the rules. It’s a part of the business.

10 Top Trading Commandments

  
  Education
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  • Discipline trumps conviction. Don’t let your bad trades turn into investments.

  • Perception is reality in the market. Adapt your style to the market, and learn to accept the market as it is, not how you wish it was.

  • Play great defense, not great offense. Opportunities are made up easier than losses.

  • Don’t confine your thinking in terms of boundaries. Expect the extreme, and don’t miss major profit opportunities.

  • Know your companies. Hold your stock as long as it is performing properly, cut your losses fast, and don’t “hope” for a rebound.

  • Risk control is important. Always quantify your risk going into a trade.

  • Be diligent and thorough in your research. Do your homework, recap each day, and learn from your mistakes.

  • Don’t get caught in a situation in which you could lose a great deal of money for reasons you don’t understand.

  • Respect the price action, but never defer to it. When unsure, trade “in between.”

  • Emotion is the enemy when trading. Be greedy when others are fearful, and fearful when others are greedy.

    • Greed, Fear, Hope, and Regret

      
      Education
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    There are four psychological states of emotions that drive most individual decision making in any market in the world. They are greed, fear, hope and regret.

    Since the stock market is made up of individual human beings who tend to act in similar manners, a group is formed. It is only the group’s opinion that matters during a trend, but it is the individual trader’s job to identify the subtle clues as to when a market is about to shift direction.

    The clues are there, but they are subtle. An awareness and detailed understanding of these emotions is what keeps the astute technical trader out of trouble by providing a means to identify individual weaknesses. We shall now take a closer look at these emotions, and provide examples of how they influence a trader’s ability to consistently make money.

    What is Greed?

    Greed is commonly defined as an excessive desire for money and wealth.

    In trading terminology, it can specifically be defined as the desire for a trade to provide an immediate and unrealistic amount of profit. When greed sets in, all a trader can focus on is how much money they have made and how much more they could make by staying in the trade. However, there is a major fallacy with this type of reasoning. A profit is not realized until a position is closed.Until then, the swing trader only has a POTENTIAL profit (aka. “paper profit”). Greed also frequently leads to ignoring sound risk management practices.

    What is Fear? (more…)

    The Optimal Mental State For Trading

      
      Education
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    One of the most important skills a professional trader needs to develop is being able to manage his or her psychological state. Effective psychological maintenance can make all the difference between trading success and failure.

    In my own trading, I have found the essential state of mind I must be in to trade at an optimal level. I call it the “zero-state.”
    For me, the zero-state represents an emotionally neutral condition that is neither happy nor sad, neither overconfident nor fearful. The adjective “calm” starts to come close to what I mean but the term lacks an important distinction. “Calm” is part of an adjective pair, whose partner has precisely the opposite meaning. “Stormy” is usually given as the antonym to “calm.”

    The term “serenity” describes a state that comes even closer to describing the zero-state than calm. Serenity suggests a timeless eternity of “no-emotion,” where I am not connected to the outcome in a personal, meaningful way.

    No conventional adjective, however, can fully describe the zero-state. An adjective describes a particular condition. I associate one adjective or condition as one half of a pair of opposites. Both words of the pair form poles on a continuum where I think of the exact center as “zero,” just as on a number line. Conceptually, the Japanese term “mu” comes fairly close to this concept of center. “Mu” has been variously described as neither yes or no, a state in-between that does not acknowledge the question being asked as one that may be answered by either yes or no, with the answer existing in a different plane of reality.

    Other Useful Mental States

    Other traders I know have found different mental states useful. After all, trading from an emotion-free state (like the zero-state) may not be the best mental state for you. Consider the following options for your optimal mental state in your journey of self discovery and trading mastery.

    I know traders who find it necessary and useful to achieve a state of emotional alpha male competitiveness in order to enter the “ring of combat.” These traders perceive the trading environment as combative and they interpret their role accordingly. They anticipate combat, they mentally prepare for it, and they experience trading in combative terms. (more…)

    10 Life Lessons We Learn Too Late

      
    Analysis, Education
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    What Are the Lessons People Often Learn Too Late in Life?

    1. Time passes much more quickly than you realize.

    2. If you don’t take care of your body early then it won’t take care of you later. Your world becomes smaller each day as you lose mobility, continence and sight.

    3. Sex and beauty may fade, but intimacy and friendship only grow.

    4. People are far more important than any other thing in your life. No hobby, interest, book, work is going to be as important to you as the people you spend time with as you get older.

    5. Money talks. It says “Goodbye.” If you don’t plan your finances for later in life, you’ll wish you had.

    6. Any seeds you planted in the past, either good or bad, will begin to bear fruit and affect the quality of your life as you get older — for better or worse.

    7. Jealousy is a wasted emotion. People you hate are going to succeed. People you like are going to sometimes do better than you did. Kids are going to be smarter and quicker than you are. Accept it with grace.

    8. That big house you had to have becomes a bigger and bigger burden, even as the mortgage gets smaller. The cleaning, the maintenance, the stairs — all of it. Don’t let your possessions own you.

    9. You will badly regret the things you didn’t do far more than the things you did that were “wrong” — the girl you didn’t kiss, the trip you didn’t take, the project you kept putting off, the time you could have helped someone. If you get the chance — do it. You may never get the chance again.

    10. Every day you wake up is a victory.

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