Your losses are getting smaller and smaller.
- Your losing streaks are not as long as they use to be.
- Your draw downs are not as big as they use to be.
- You are very picky about entries and only take the ones with the best probabilities of success with good risk/reward skewed in your favor.
- You have become much more patient with holding winning trades and very impatient with holding losing trades. (more…)
Archives of “financial markets” tag
rss3 Rules For Traders-Must Follow
- Never allow a profit to become a loss. If a profitable trade turns into a losing position, then you have lost twice. Consider taking a portion of the trade as a profit, and if your long term opinion is favorable, then let the rest ride for the duration of the trade.
- Always start the day with your focus on good trade execution and not on big money. Money will take care of itself. A rational mindset trumps irrational behavior every minute of a day.
- Oversee each day carefully, but let a profitable week be your goal. Individual trades may go against you, but a week of stellar opportunities will await your mouse click. In other words, don’t gamble on a bad set up just to get even for the day.
It is the way a man looks at things-Reminiscences of a Stock Operator
“It is the way a man looks at things that makes or loses money for him in the speculative markets”, states Livermore. It is the habitual attitude that sets the experienced professional apart from the beginner. The ego driven thought patterns, not unlike the thinking of crowds, tends to be shallow and superficial.
Three different examples of successful large-scale trading campaigns are given to illustrate the thinking and the attitudes behind the trade. The first case study relates the correlation between activity in different ag markets. The second is an example where Addison Cammack uses the information from a tipster as a means of playing for position in the general market. The third campaign centers around a repeating theme: the opportunity needed to liquidate a large, profitable position. Often, the large trader must liquidate when the market is there to absorb a large line. Days of high liquidity and high volume are opportunities that must be watched for and acted upon quickly. In each example, the thinking of the crowd (and that of the tipster) is contrasted by the correct assessment of the large trader – this is one of the most important themes that is repeated in every chapter.
It occurred to me that Larry always has a reference to where he learned his lessons. That is, he always has a story or an example of the actions of other traders to support the rational of his actions. I only just realized that he must have done the very same thing I am doing now… researching and learning all he could from others.
21 One Liners For Traders
- It is possible to see that a market is dramatically overbought and prepare for, and then capture, huge gains after the sell off.
- Risk small amounts to make big profits.
- Bet against times when numerous leaders must agree.
- Long hours and a strong work ethic are keys to being a successful trader.
- While it is good to trade any market that will turn a profit, specializing in a market can lead to great success.
- The markets go down faster than they go up.
- If the market will not go down during bad news, it will likely go higher.
- The stock market moves in patterns and in cycles. Past price patterns repeat themselves due to human emotions.
- Many times traders think a big position order size means that a whale knows something, most times they do not.
- It is okay to skip a trade if you can’t get your entry price.
- A momentum move does not just stop, it takes time to roll over.
- It is possible to trade successfully by gaming the actions of other traders.
- Be aggressive at high probability moments.
- Always stay in control of your trading and manage risk.
- Focus on risk management as the #1 priority in trading.
- Having the right mindset during a big loss that it is just temporary, is the key to coming back and being successful.
- Letting profits run is sometimes a great plan.
- Being long at all time highs in the indexes is a great strategy.
- Great money managers trade with passion.
- Even Market Wizards have doubts about winning when entering a trade.
- When the top in a market is reached, there is a lot of money to be made shorting as panic selling sets in.
It doesn’t get easier, you just get better. Or do you?
It doesn’t get easier you just get better. That’s a phrase often used in professional sport but when it comes to trading the harder you try, the more hours you watch the charts doesn’t necessarily mean you will get better at trading. With trading, it’s about understanding how to replicate an edge again and again with good risk management.
As time goes on you are either going to get better or worse at applying your edge. It’s black or white you’ll either be making money or losing money and if you are losing money it will be because you are continually switching edges and not applying sold risk to reward on your trades. Making money is a simple process of replicating an edge but it never gets easier and you will never be able to pick the winners, it’s a game of probabilities that requires you to win more than you lose and replicate it again and again.
Why can’t everyone do it? It’s because the outcome on each edge is random and you don’t know which trades (your edge) will be the winning ones and which ones will be the losing ones. That’s why trading is emotional for people because they feel like they’ve tried hard, worked hard on “getting the system right” and when it presents on the screen they expect certainty. Certainty does not exist, probability is what exists and unless you can learn to deal with random probability and let go of certainty you won’t likely get better as a trader. Apply a simple edge, ensure it has solid risk to reward and focus on replicating the edge over 50 trades. You will then have something that you can measure the success over a series of trades and look to see if you can improve the edge and money management.
10 Things Traders Confuse with Success
Many new traders deceive themselves. They celebrate small wins. They look for the magic solution to making money through a fail safe system. They believe a seminar or newsletter will change their life completely. The mistake trading for easy money and coaches and gurus for having that secret recipe for success. Well, there is none, there is simply trading robust methodologies that have an edge, while managing risk, and keeping the right mindset. Trading can be a very fruitful endeavor, but new traders need to quit looking to be given fish and learn to fish for their self. Don’t confuse these 10 things with trading success. New traders need to understand the difference between having a tug on their fishing line and having a boat full of fish.
- It is not the winning trading system that determines your trading success but your ability to follow it.
- It is not the big wins that make you rich but your ability to keep them and not give them back in losses.
- Reading great trading books will not help you unless you read the right ones and really practice their lessons.
- Mentors will not help you unless you follow their advice.
- All the training to trade will do you know good unless you put it into action in your account.
- A great methodology will do you no good if you do not have great risk management.
- Small winning trades will not make you profitable if you have big losses.
- Capturing bull market trends make no difference if you give back your profits in the next bear market.
- A 95% win rate does you no good if your 5% of trades that are losses are bigger than the 95% that are winners.
- Participating in social media does traders no good if they follow the wrong people and are in the wrong trading groups.
To Trade or Not to Trade
in trading activity alone does not make money, the right activity at the right time is what makes money. Many times the right thing, is to do nothing.
In your actual trading you have to do four things very well to make money.
You have to know when to get in.
Only enter trades that have the highest probability of success and the best risk/reward ratio. Buy the best monster stocks during up trends. Short the fallen leaders when the game changes and they are under the 50 day. Buy the monster stocks at the gift of the 200 day moving average. Short down trending junk stocks. Go where the trends are.
You have to know when to get out.
When your trade reverses through a key support get out. When the market trend changes get out of your long positions. When your stop loss is hit, get out. When the stock reverses and hits your trailing stop, get out.
You have to know when to stay in. (more…)
The Legendary Turtle Traders
Have you ever heard of the legendary Turtle traders? Millionaire trader Richard Dennis set off to find out if traders were just born to trade, or if they could be trained to be successful in the markets from scratch. The answer? If they could follow rules they could be successful.
“I always say that you could publish my trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody can make up a list of rules that are 80% as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.” –Richard Dennis: Founder of the ‘Turtle Traders’ quoted from the book Market Wizards:
The Turtle system proved that the traders that followed the rules went on to be millionaires and to manage money professionally.
Markets – What to buy or sell
- The Turtles traded all major futures contracts, metals, currencies, and commodities.
- The turtles traded multiple markets to diversify risk.
Position Sizing – How much to buy or sell
- Turtle position sizing was based on a markets volatility using the 20 day exponential moving average of the true range.
- The Turtles were taught to trade in increments of 1% of total account equity,
Entries – When to buy or sell (more…)
9 Secrets for Successful Speculation
As you read the list below, think about how you can learn more about each secret and adapt it to your own most effective use.
Secret #1: Contrarianism takes courage.
Everyone knows the essential investment formula: “Buy low, sell high,” but it is so much easier said than done, it might as well be a secret formula.
The way to really make it work is to invest in an asset or commodity that people want and need but that for reasons of market cyclicality or other temporary factors, no one else is buying. When the vast majority thinks something necessary is a bad investment, you want to be a buyer—that’s what it means to be a contrarian.
Obviously, if this were easy, everyone would do it, and there would be no such thing as a contrarian opportunity. But it is very hard for most people to think independently enough to risk hard-won cash in ways others think is mistaken or too dangerous. Hence, fortune favors the bold.
Secret #2: Success takes discipline.
It’s not just a matter of courage, of course; you can bravely follow a path right off a cliff if you’re not careful. So you have to have a game plan for risk mitigation. You have to expect market volatility and turn it to your advantage. And you’ll need an exit strategy.
The ways a successful speculator needs discipline are endless, but the most critical of all is to employ smart buying and selling tactics, so you don’t get goaded into paying too much or spooked into selling for too little.
Secret #3: Analysis over emotion. (more…)
Ten Trading Terms Used By Technical Analysts -Sound Like Sex Acts
In no particular order….
- Blowoff Top
- Bottom Bounce
- Shorting Against The Box
- The Piledriver
- Inverse Hammer
- Kissing The Trendline
- Rolling A Position Forward
- Getting “Cramered”
- Churning
- Spread Trading
Above Terms u had Read many times written by Technical Analysts & Blue Channels Anchors + Analysts