“To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes. In a sense, they generally are correct. In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. Besides trading, there is probably no other profession where you have to admit you’re wrong. In trading, you can’t hide your failures. Your equity provides a daily reflection of your performance. The trader who tries to blame his losses on external events will never learn from his mistakes. For a trader, rationalization is a guaranteed road to ultimate failure.”
Archives of “failure” tag
rssCharacteristics of Profitable Traders
They are experienced – Probably the most horrifying and worst myth shot out to anyone considering trading for a living is that you will compound millions in an extremely short amount of time. The only true way to make every day profitable comes through experience, and countless hours learning is crucial to longevity of success.
They know the damage they are capable of – Notice I didn’t say potential or profits here. The best traders I know of understand their limits, and seem to focus more on what can go wrong than what can go right. They are not easily convinced of lucrative outcomes, and have a very high sense of self-awareness.
They trade to make money, not to be right – They understand the strengths and possible pitfalls of what it is they do for a living, and use that knowledge to curb their emotional output.
They have an edge and know how to use it – They understand that without it they wouldn’t last long
They have a gameplan, and follow it explicitly – Each trade is planned and opportunities are scouted for before any trading takes place. They steer away from the killer of all killers: overtrading.
They manage risk – Regardless of how much conviction they have on a trade, they will still do what they can to avoid the potential of any losses and understand rule #1 about trading: anything can happen.
They work obsessively – They follow each turn, each piece of info that comes out in regards to their trade, and follow any underlying information relevant to failure or success.
They only access the best information – Information rules in trading, and having some of the best translates to money. Using the wrong information leads to failure.
They think about the trade, not the money behind it – Focusing on money can destroy your means to objectively assess the trade itself.
They are constantly learning – Just when you think you know it all about trading, a new curveball gets thrown your way, not to mention there are continued means and methods to be learned about making money. Even the most highly successful trader I ever knew, a multi-billion dollar portfolio manager, has a team of fundamentalists and technicians come in to train and retrain himself and his traders.
They are active – Activity sparks creativity, a very crucial part of trading.
They have patience – They understand that the money will come, but everything needs to be in place, first.
Market Gravitates or We Spot those LEVELS…. Mystery !!
Here in this very space we have written Y’day and updated today intra-day too: @ 9106 wrote to Sell CNX Bank INDEX on any Rise. It would tumble to 8719 level very shortly. Bang on… just in 48 hrs it collapsed to exactly our level, precisely 8715, a whooping fall of 400 points.
In the same breathe you were forewarned that for NF not crossing 5165-68 would weaken it to 4994 – 4970 levels. Exactly from 5168 of y’day it has nosedived uptill 5017.
These are indices: Non-manipulatable, Non-influential. How did it happen, who did it, can there be any attributes at all !!!! Its our ever dependable charts, Analytical skills and wisdom of Insight. Collectively Technical Analysis. Just Pure Intelligence.
Yesterday I written about Bank stocks…Just click here
Read Yesterday’s Guesstimates
Many Traders had asked about MTNL…..and they say I don’t about failure calls.First of all about MTNL….Technically was /still looking hot …But I had written many times never act blindly in market and always consider price as Father of stock/Commodity.
-Now click here and see…the reason ..Why MTNL had crashed in yesterday’s trade.
Now about Failure calls.If I recommend any stock or do analysis then I always write Support/Resistance levels. (more…)
Two Tips for Traders
Learn as much from your losers as you do from your winners.
Failure is important in success but do not overlook the importance of success in succeeding.
Trading Sins
Successful traders fail all the time. In fact, many even fail a majority of the time. The difference is that their failures are not a failure to execute their plan. The failure rests in the fact that the expertly chosen trade turned out to be wrong (nobody can be right 100% of the time – except Congress). And when the trade was wrong, they took their loss which resulted in minimal damage to their portfolio and moved on to the next opportunity. |
4 Trading Quotes for Today's Trading Session
“You must practice being a successful trader first. From that state of mind you will get information about what to do, and that will produce what you want to have.”
“Excellence is about stepping outside the comfort zone, training with a spirit of endeavor, and accepting the inevitability of trials and tribulations. Progress is built, in effect, upon the foundations of necessary failure.”
“Amateurs keep thinking what trades to get into, while professionals spend just as much time figuring out their exits.”
“Confidence doesn’t come from being right all the time: it comes from surviving the many occasions of being wrong.” Brent Steenbarger, The Daily Trading Coach “When you attain some degree of control over yourself, you can then see how other traders are not in control of what happens to them.”
What are you certain about the market or trading?
If I do not take it will take from me.
You are only as good as your last trade.
Rigidity and complacency ends careers.
Always get paid for taking risk.
A trend never ends when it should.
I am certain that the only way for me to have a chance to be a successful trader is to do daily work and not become lazy or use shortcuts.
I am certain I would rather take every planned trade and lose than not execute a planned trade.
I am certain I am always uncertain before taking a trade. I am certain when I am most relaxed in my mind is when I am doing the right thing regardless of the outcome.
I am certain there is no mathematical (technical) formula to beat the market. If there was, there wouldn’t be a market.
I am certain that opportunities are easier made up for than losses. I add one more: I am certain that the habits or procedures we resist represents our true trading system at that moment.
I am certain that trying to ‘predict’ will end in failure.
I am certain that most of my trades that I convince myself to make investments will end up losing money. I am certain that if I do not plan a trade including stop loss points I will be sorry. I am also certain that I will violate both of the above sometime in the next month.
I am certain that I know myself…. or at least I think I do for the moment.
I am certain that uncertainty is a concept that most traders need to come to terms with before any sort of success will be attained.
Secret to trading success: You
“You are the weakest part of your system”. That is a defeatist statement and completely untrue. It makes your expectation to fail easier to accomplish and more importantly it makes failure easier to handle. It shifts the pressure away from you and unto fate.
Would you fly on an airline if their motto was “Our pilots are the weakest part.” I do not think so. You are your system. Even if your system is automated you added the inputs, parameters.
Taking responsibility for your action is not easy. Taking control of the outcomes of trading or life is a huge responsibility. You will have moments of weakness, but you are not weak. The market does not go straight up and either does the road to success.
3 Trading Principles
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”
Keep Your Cool
“Deciding when to cut your losses is one of the toughest decisions for anyone to make, but traders at the top of their game know that they always have to make the decisions they need to make, which may or may not be the ones they wantto make”
Get Comfortable With Being Uncomfortable
“In the trading world, you will either make money or lose money on any given trade. All that matters in the end is making more money when you’re right than you lose when you’re wrong. Knowing this, traders have learned to accept failure as part of the game, but they also use the information they acquire from their mistakes as a learning tool. Frequently, what they learn from losing money is more valuable than what they learn when they make money”
Be Imperfect
As a trader – or an investor – you will not be right all of the time. If you can accept your imperfection, and work within it, you will be much more successful:
If you have a perfectionist mentality when trading, you are setting yourself up for failure, because it is a “given” that you will experience losses along the way. You must begin to think of trading as a game of probability. Your losses ( that you hope will return to breakeven) will kill you. If you cannot take a loss when it is small ( because of the need to be perfect), then you will watch that small loss grow into a larger loss and so on into a vicious cycle of more and more pain for the perfectionist. Trading on hope does not work. The markets can remain irrational for a lot longer than you can remain solvent.
The object should be excellence in trading, not perfection. Moreover, it is essential to strive for excellence over a sustained period, as opposed to judging that each trade must be excellent. This is a marathon…not a sprint.
The greatest traders know how to take cut losses and let winning positions run. Perfectionists often do exactly the opposite. They get in at the wrong time, stay in too long and then get out the wrong time. Perfectionists are always striving and never arriving. The market will find the flaw in a perfectionistic trader and exploit it day after day.