Archives of “gamblers” tag

rss

Overtrading: A Common Mistake

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Over trading is one of the biggest causes why traders never make it in the financial markets. With a click of a button, a trader can place a trade anytime he wants. It takes tremendous discipline to hold yourself back from over trading. There are many reasons why one may choose to over trade.

1. Traders without a plan

Traders without a plan are my favorite type of traders because they will always lose. Without a plan, how would one know when to take a trade and when not to? Having a trading plan is a necessity. I can not trade if I do not have a plan for the day. I feel lost without one.

2. Revenge trading

Many new traders become tilted after a loss or a string of losses. This causes them to revenge trade just to break even. This often leads to reckless trading forcing a trade when opportunity is low.

3. Chasing the markets

Alot of new traders feel more pain when they have missed a move than an actual loss. This is why new traders love to chase the markets. If price has moved away from your projected entry point, let it go. There are plenty of more opportunities. Chasing is one of the worst habits a trader can have. Not only does it offer you low rewards, it also gives you a horrible entry and alters your stop loss placement. Always think about the risk before the profits.

When you have a plan to follow, it is easy to filter out bad trades from good one. This keeps you discipline and selective in your trades. I personally do not like trading more than 5 round trips a day. Patience is a virtue. There are always good high probability trading opportunities everyday. Just sit tight and don’t jump the gun.

One way to control a loss is by reducing your size. The problem with gamblers is that they will often double up their stake so they can get even quicker. This usually leads to a greater loss and devastation. Having the strength to grind your way back from a loss is important in trading. Whenever I am having a losing streak, I will trade small and gradually recover. This also gives me the confidence I need after a string of losses.

Trading Psychology

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Your biggest enemy, when trading, is within yourself. Success will only  come when you learn to control your emotions. Edwin Lefevre’s

 Reminiscences of a Stock Operator (1923) offers advice that still applies  today.

 Caution
 Excitement (and fear of missing an opportunity) often persuade us to enter the market  before it is safe to do so. After a down-trend a number of rallies may fail before one  eventually carries through. Likewise, the emotional high of a profitable trade may blind  us to signs that the trend is reversing.

 Patience
 Wait for the right market conditions before trading. There are times when it is wise to  stay out of the market and observe from the sidelines.

 Conviction
 Have the courage of your convictions: Take steps to protect your profits when you see  that a trend is weakening, but sit tight and don’t let fear of losing part of your profit  cloud your judgment. There is a good chance that the trend will resume its upward  climb.

 Detachment
 Concentrate on the technical aspects rather than on the money. If your trades are  technically correct, the profits will follow.

 Stay emotionally detached from the market. Avoid getting caught up in the short-term  excitement. Screen-watching is a tell-tale sign: if you continually check prices or stare at  charts for hours it is a sign that you are unsure of your strategy and are likely to suffer  losses.

 Focus
 Focus on the longer time frames and do not try to catch every short-term fluctuation.  The most profitable trades are in catching the large trends.

 Expect the unexpected
 Investing involves dealing with probabilities ? not certainties. No one can predict the  market correctly every time. Avoid gamblers? logic.

 Average up – not down
 If you increase your position when price goes against you, you are liable to compound  your losses. When price starts to move it is likely to continue in that direction. Rather  increase your exposure when the market proves you right and moves in your favor.

 Limit your losses
 Use stop-losses to protect your funds. When the stop loss is triggered, act immediately  – don’t hesitate.

 The biggest mistake you can make is to hold on to falling stocks, hoping for a recovery.  Falling stocks have a habit of declining way below what you expected them to.  Eventually you are forced to sell, decimating your capital.

 Human nature being what it is, most traders and investors ignore these  rules when they first start out. It can be an expensive lesson.

 Control your emotions and avoid being swept along with the crowd. Make consistent  decisions based on sound technical analysis.

Top Ten Reasons Not to Trade– and Why You Should Do It Anyway

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

#1 Trading creates no greater good
– like when you buy grain futures, the price skyrockets, and you make a killing! A poor farmer plants more seeds as a consequence, third world children get affordable bread, hmm, did I say you make a living?

#2 Trading makes you selfish
– and that’s why filthy rich old speculators turn to philanthropy.

#3 Staring at screens all day is not healthy
– which is true, and why slow lunch hours are perfect for physical exercise.

#4 Staring at screens all day is not good for your social skills
– which is why traders are out having fun when the market is closed. (Don’t “normal” people spend evenings in front of the TV?)

#5 The market is a casino
– where scrupulous gamblers make it easier (and more important) for sane traders to make a living. (more…)

Ten Trading Paradoxes

  
  Education
#  #  #  #  #  #  #  #
  1. The less I trade the more money I make.
  2. All my biggest profits were made on option contracts I bought not ones I sold.
  3. My number one job as a trader is to manage risks not make money.
  4. The best traders in history were the best risk managers not the best at entries and exits.
  5. The ability to admit you are wrong about a trade and get out is more important than being confident in a wining trade and staying in no matter what.
  6. Winning traders think like a casino losing traders think like gamblers.
  7. Opinions, projections, and predictions are worthless, trade the price action.
  8. At times fundamentals are good helpers to a trader but they are always terrible masters.
  9. Only date trading vehicles but marry your risk management and positive mind set.
  10. The smaller and more focused my watch list the better I trade what is on my watch list.

Chimpanzees Are Like Stock Traders — They Take Gambles

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Humans aren’t the only gamblers in the animal kingdom.

 Our closest primate relatives, chimpanzees and bonobos, demonstrate behaviors considered basic to human economics such as delaying gratification and assessing risk, according to new research published Wednesday May 29 in the journal PLoS One.

Though they don’t bet on stock exchanges or casinos, they also have strong emotional reactions to games of chance — like when they are betting on food showing up. They don’t like losing or waiting for payouts, and can even correct their own behaviors based on successes or failures.

“Apes are also experiencing rich emotional reactions in an economic context,” study researcher Alexandra Rosati, of Yale University, said in a statement. “They are making decisions about their most valuable resource, which is food.”

“Even though economists can be quite puzzled about human behavior and what it means, biology suggests that these economic biases have their roots in non-human foraging behaviors,” Rosati said. (more…)

Speculation and Trading vs. Gambling

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

When does trading become gambling? There is a very thin line. I maintain that most traders ARE gamblers. They use markets as a substitute for a casino.

1. IF you enter trades without a clear trading plan, you just might be a gambler.

2. IF you trade just to be trading, you just might be a gambler.

3. IF your bored and enter a trade, you just might be a gambler.

4. IF you look at potential profit before assessing potential loses, you just might be a gambler.

5. IF you have no impulse control, you just might be a gambler.

6. IF you have no methodology, you just might be a gambler.

7. IF you rely on others for your trading decisions, you just might be a gambler.

8. IF you do not take full responsibility for your trading outcomes, you just might be a gambler.

9. IF you increase your risk due to losses, you just might be a gambler.

10. IF you do not use stop losses or do not adhere to them, you just might be a gambler.

And my all time favorite

11. IF you get an adrenaline rush when your entering trades, you just might be a gambler.

In summation I would like to say that I do enjoy casino gambling as a form of entertainment. I strive to over come the house’s edge when I do gamble. Gambling is entertainment and trading is a business and should be approached as a business enterprise. IF your using the markets as a gambling outlet, be my guest. Traders that approach trading with a positive expectancy WILL take all your money. They will send you stumbling out into the night, cross-eyed and mumbling to yourself. Be smart. You can either feed the trading gods or feed your head. Do the work and get educated before risking one thin dime. Employ laser like focus in your trading and use iron discipline. The end result can be well beyond your wildest expectation.

When does trading become gambling?

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

When does trading become gambling? There is a very thin line. I maintain that most traders ARE gamblers. They use markets as a substitute for a casino. Here are some of the sign posts that you have crossed the line. I love Jeff Foxworthy so I will steal his “you just might be a redneck.”

1. IF you enter trades without a clear trading plan, you just might be a gambler.

2. IF you trade just to be trading, you just might be a gambler.

3. IF your bored and enter a trade, you just might be a gambler.

4. IF you look at potential profit before assessing potential loses, you just might be a gambler.

5. IF you have no impulse control, you just might be a gambler.

6. IF you have no methodology, you just might be a gambler.

7. IF you rely on others for your trading decisions, you just might be a gambler.

8. IF you do not take full responsibility for your trading outcomes, you just might be a gambler.

9. IF you increase your risk due to losses, you just might be a gambler.

10. IF you do not use stop losses or do not adhere to them, you just might be a gambler.

And my all time favorite

11. IF you get an adrenaline rush when your entering trades, you just might be a gambler.

Common Characteristics between Successful Gamblers and Successful Speculators

  
Education, Video
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

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…)

Time Tested Rules (Part 1)

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

timetestedrulesOptimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.
It is a safe bet that the money lost by (short term) speculation is small compared with the gigantic sums lost by those who let their investments “ride”. Long term investors are the biggest gamblers as after they make a trade they often times stay with it and end up losing it all. The intelligent trader will . By acting promptly—hold losses to a minimum.
People who buy headlines eventually end up selling newspapers. (more…)

Gamblers Delude Themselves

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #
“Above the roulette tables, screens listed the results of the most recent 20 spins of the wheel. Gamblers would see that it had come up black the past eight spins, marvel at the improbability, and feel in their bones that the tiny silver ball was now more likely to land on red. That was the reason the casino bothered to list the wheel’s most recent spin: to help gamblers to delude themselves.” – in Liar`s Poker, excerpt from the “The Hangover: How Las Vegas Explains the Past and Future of the Economy”
Go to top