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 “expression” tag
rssWall Street Its Mysteries Revealed Its Secrets Exposed By William C Moore 1921 – Greed
It’s been a while since I last posted an excerpt or quoted from one of the trading books I own. Tonight’s small excerpt is from the book: ‘Wall Street. Its Mysteries Revealed: Its Secrets Exposed’ published in New York, 1921 by William C. Moore. The book contains short and to the point chapters like: ‘The crowd mind’, ‘How the public speculates’, ‘Mental suggestion’ and ‘Market advice’ to name but a few. I chose the one on ‘Greed’ as I consider it great advice and timeless wisdom. Enjoy.
Greed p. 123-124
An avaricious or keen desire for profits is one of the most prevalent causes of failure in speculation. This weakness is general among traders. They desire “just a little more ” profit. If the stock or commodity bought advances, then that’s proof to them that it will advance further and so they hang on. They usually overstay and thus miss their market. If they fail to obtain the top price and it reacts, then they assure or console themselves by the expression: “Oh, it will come back.” It may “come back” but often it does not, and instead, declines to below the purchase price and frequently results in a loss. The same observations apply to a short sale for a further anticipated decline. It is a good policy to be satisfied with a reasonable profit and be willing to leave some for the other fellow. The market is always there and other opportunities for making profits will present themselves while the greedy trader is waiting to get the last eighth.
Greed leads to disaster in another way. A speculator has started in to buy at the inception of a bull movement. He makes money. The more he makes, the more avaricious he becomes as the market moves forward. His confidence in himself increases until he develops a mental state known in the vernacular as “big head” or “swelled head”. He now has unbounded confidence in himself and “plays the limit”. Soon thereafter the market culminates at the top and the trend reverses, but Mr. Swelled Head is ignorant of this, so continues to buy on set-backs instead of selling on rallies. A drastic slump follows and Mr. B.H. goes to the scrap pile – BUSTED.
Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction. – Erich Fromm
Wall Street Its Mysteries Revealed Its Secrets Exposed By William C Moore 1921 – Greed
Small excerpt is from the book: ‘Wall Street. Its Mysteries Revealed: Its Secrets Exposed’ published in New York, 1921 by William C. Moore. The book contains short and to the point chapters like: ‘The crowd mind’, ‘How the public speculates’, ‘Mental suggestion’ and ‘Market advice’ to name but a few. I chose the one on ‘Greed’ as I consider it great advice and timeless wisdom. Enjoy.
Greed p. 123-124
An avaricious or keen desire for profits is one of the most prevalent causes of failure in speculation. This weakness is general among traders. They desire “just a little more ” profit. If the stock or commodity bought advances, then that’s proof to them that it will advance further and so they hang on. They usually overstay and thus miss their market. If they fail to obtain the top price and it reacts, then they assure or console themselves by the expression: “Oh, it will come back.” It may “come back” but often it does not, and instead, declines to below the purchase price and frequently results in a loss. The same observations apply to a short sale for a further anticipated decline. It is a good policy to be satisfied with a reasonable profit and be willing to leave some for the other fellow. The market is always there and other opportunities for making profits will present themselves while the greedy trader is waiting to get the last eighth. (more…)
Greed
Small excerpt is from the book: ‘Wall Street. Its Mysteries Revealed: Its Secrets Exposed’ published in New York, 1921 by William C. Moore. The book contains short and to the point chapters like: ‘The crowd mind’, ‘How the public speculates’, ‘Mental suggestion’ and‘Market advice’ to name but a few. I chose the one on ‘Greed’ as I consider it great advice and timeless wisdom. Enjoy.
Greed p. 123-124
An avaricious or keen desire for profits is one of the most prevalent causes of failure inspeculation. This weakness is general among traders. They desire “just a little more ” profit. If the stock or commodity bought advances, then that’s proof to them that it will advance further and so they hang on. They usually overstay and thus miss their market. If they fail to obtain the top price and it reacts, then they assure or console themselves by the expression: “Oh, it will come back.” It may “come back” but often it does not, and instead, declines to below the purchase price and frequently results in a loss. The same observations apply to a short sale for a further anticipated decline. It is a good policy to be satisfied with a reasonable profit and be willing to leave some for the other fellow. The market is always there and other opportunities for making profits will present themselves while the greedy trader is waiting to get the last eighth.
Greed leads to disaster in another way. A speculator has started in to buy at the inception of a bull movement. He makes money. The more he makes, the more avaricious he becomes as the market moves forward. His confidence in himself increases until he develops a mental state known in the vernacular as “big head” or “swelled head”. He now has unbounded confidence in himself and “plays the limit”. Soon thereafter the market culminates at the top and the trend reverses, but Mr. Swelled Head is ignorant of this, so continues to buy on set-backs instead of selling on rallies. A drastic slump follows and Mr. B.H. goes to the scrap pile – BUSTED.
How Indian investors get a lifetime of free meals
In one of the AGMs that I attended, there was an impatient “investor” sitting next to me.
He confided to me that he was waiting for this AGM to get over so that he could have his lunch and then he could attend two more AGMs !
I remarked that he must be having lots of shares to attend so many AGMs. He replied in Hindi “Nahi, Nahi.Sab mein 5-10 shares hai .”
Looking at my puzzled expression, he explained” You buy 5-10 shares of a company.In a AGM, they normally have a meal (lunch or snacks). If the venue is nearby, you attend the AGM.By attending two/three AGMs, you recover the cost of your shares.Sometimes the management gives gifts also.Plus, you get dividends and a lifetime access to free meals !”
If Ben Graham heard this approach to value investing, he would probably turn in his grave !
What is the Purpose of Trading?
It seems clear, doesn’t it? The purpose of trading is to make money. The trade is planned, entered, and exited with the goal of increasing the size of one’s trading account. What other purpose would there be?
The dictionary says this about purpose:
“something set up as an object or end to be attained : intention b: resolution, determination”
What about:
The purpose of trading is to not lose money.
The purpose of trading is to practice discipline.
The purpose of trading is to use my talents.
The purpose of trading is to grow.
Or how about:
The purpose of trading is to express my true nature. I was meant to be a trader.
Maybe the purpose of trading is simply to trade. Because that is what you have been called to do, or what you are meant to do, or it’s the highest expression of your nature as a producer rather than a consumer. When you trade successfully, you are disciplined, you are growing, you are using and developing your talents, you are making money, and you are creating wealth from scratch. But most of all, you are trading because it’s the right thing to do for you.
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.
Two Thoughts For Traders
1. It’s okay to be wrong as long as you aren’t very wrong for very long. The worst thing is to be stubborn and override your process because you are emotionally invested in what you believe.
2. The expression “you’re only as good as your last trade” is incorrect. You are only as good as your process. One can get a trade right for the wrong reasons, and a trade wrong for the right reasons. It is crucial to distinguish the two for long-term success, and stick to your strategy.
How Mistakes Can Become Baggage
Those of us who don’t learn from mistakes are destined to repeat them. Most traders are busy focusing on trying to understand what moves the market, but an equally beneficial endeavor is understanding what causes you to move.
This involves knowing the underlying, often subconscious to a degree, reasons behind your entries and exit decisions. The inner market. Understanding the connection between your internal state and your behavior is a very effective way to get a handle on repeated mistakes.
In general, P&L is an expression of how well you control your actions, not how well you analyze charts, the market, economy etc. Or more accurately, how well you control your actions when facing the discomfort of uncertainty.
Mistakes become emotional baggage when we choose not to learn from them. Not wanting those moments where we can see the truth about our own issues ensures they return again.
Common Characteristics between Successful Gamblers and Successful Speculators
Just Listen :
On a warm summer’s evenin’ on a train bound for nowhere,
I met up with the gambler; we were both too tired to sleep.
So we took turns a starin’ out the window at the darkness
‘Til boredom overtook us, and he began to speak.
He said, “Son, I’ve made my life out of readin’ people’s faces,
And knowin’ what their cards were by the way they held their eyes.
So if you don’t mind my sayin’, I can see you’re out of aces.
For a taste of your whiskey I’ll give you some advice.” (more…)