Archives of “future events” tag

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Do you trade your opinions? Some warning signs

  
Education, Life
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  1. You find it hard to be enthusiastic for something until you know that others oppose it.
  2. You have little interest in getting clear on what exactly is the position being argued.
  3. Realizing that a topic is important and neglected doesn’t make you much interested.
  4. You have little interest in digging to bigger topics behind commonly argued topics.
  5. You are less interested in a topic when you don’t foresee being able to talk about it.
  6. You are uncomfortable taking a position near the middle of the opinion distribution.
  7. You are uncomfortable taking a position of high uncertainty about who is right.
  8. You care far more about current nearby events than similar distant or past/future events.
  9. You find it easy to conclude that those who disagree with you are insincere or stupid.
  10. You are reluctant to change your publicly stated positions in response to new info.
  11. You are reluctant to agree a rival’s claim, even if you had no prior opinion on the topic.
  12. You are reluctant to take a position that raises the status of rivals.
  13. You care more about consistency between your beliefs than about belief accuracy.
  14. You go easy on sloppy arguments by folks on “your side.”
  15. You have little interest in practical concrete implications of commonly argued topics.
  16. Your opinion doesn’t much change after talking with smart folks who know more.
  17. You are especially eager to drop names when explaining positions and arguments.
  18. You find it hard to list weak points and counter-arguments on your positions.
  19. You feel passionately about a topic, but haven’t sought out much evidence.
  20. You are reluctant to not have an opinion on commonly discussed topics.
  21. More?

If u have any……..send me at [email protected]

If-Then

  
  Education
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READ atleast twice and Read Daily :

The idea of IF-THEN scenarios in trading is often misconstrued one. I often see it being interpreted in a sense of predicting stock’s action. A trader trying to apply it in this sense tries to think in terms ‘If a stock does this, it’s going to do that“. This approach is more acceptable if a trader thinks in terms of probability instead of certainty in which case the above sentence becomes “If a stock does this, it’s likely to do that“. Nothing’s wrong with that as long as a trader realizes that probability is just that – a probability that is going to work in a statistically valid number of samples but will not predict the outcome of each given case.

I, however, apply IF-THENs in a slightly different manner. For me it’s about defining my own action in response to market fluctuations. My IF-THEN is a scenario where IF is what market does and THEN is what I do in response. My intepretation thus becomes ‘If a stock does this, I do that”.

Certainly, it’s a derivation of the version above – you can arrive to it from “if a stock does this then it’s likely to do that, so I am going to react in such and such way”. My version is just more cut and dry.

What are the advantages of this aproach and why do we need to build a set of such scenarios? (more…)

Perception vs Reality

  
  Education
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“It is often said by experienced investors that the equity market discounts future events. Investors who support that contention believe that if you wait for an event to occur before investing, then you would probably be too late because the investment implications would already have been priced into the particular investment.

The notion that the equity market discounts future events necessarily leads us to the conclusion that the equity  market prices stocks based on perception rather than on reality. Future events that are supposedly being discounted have not yet occurred. Therefore, stock price movements reflect investors’ changing perceptions of what will occur, but not what will certainly occur. If the market were able to discount an event with complete certainty, then we would not worry about volatility or risk.”

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