- Don’t try to read other people’s minds. Don’t make other people try to read yours. Communicate.
- Be polite, but don’t try to be friends with everyone around you. Instead, spend time nurturing your relationships with the people who matter most to you.
- Your health is your life, keep up with it. Get an annual physical check-up.
- Live below your means. Don’t buy stuff you don’t need. Always sleep on big purchases. Create a budget and savings plan and stick to both of them.
- Get enough sleep every night. An exhausted mind is rarely productive.
- Get up 30 minutes earlier so you don’t have to rush around like a mad man. That 30 minutes will help you avoid speeding tickets, tardiness, and other unnecessary headaches.
- Get off your high horse, talk it out, shake hands or hug, and move on.
- Don’t waste your time on jealously. The only person you’re competing against is yourself.
- Surround yourself with people who fill your gaps. Let them do the stuff they’re better at so you can do the stuff you’re better at.
- Organize your living space and working space. Read David Allen’s bookGetting Things Done
for some practical organizational guidance. - Get rid of stuff you don’t use.
- Ask someone if you aren’t sure.
- Spend a little time now learning a time-saving trick or shortcut that you can use over and over again in the future.
- Don’t try to please everyone. Just do what you know is right.
- Don’t drink alcohol or consume recreational drugs when you’re mad or sad. Take a jog instead. (more…)
Archives of “gaps” tag
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for some practical organizational guidance.Respect the Pattern
Our view is that we need to respect the spirit of any pattern and not worry too much about the letter of the law, so to speak. Opens and closes on doji candles need not be exactly the same. Island gaps reversals (abandoned babies) need not have actual gaps. Why? Because 24-hour trading, decimalization, derivatives, etc… have changed the landscape and what constitutes an open and a close is now a very fuzzy proposition.
The financial markets are radically different than they were last century, last decade and even last year. The spirit of the tools still works because humans do the same old dumb (and occasionally) smart things over and over. It is the actual rules of the analysis that are questionable so keep it simple and you should be fine.
The 20 Rules of Trading
- Never, under any circumstance add to a losing position…. ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!
- Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand. (more…)
Trading Mantra
There are some things we can control as traders and some things that we can not. We need to learn the difference to limit our frustration and win in this game. We can control: How much we risk per trade. How big a position size we take. What time frame we trade. What market we trade. Our style of trading. Whether we stick with our trading plan or go off of it. If we honor our stop losses and trailing stops. How we react to a winning or losing trade.We can not control: Whip saws when the trend reverses on us. Gaps in opening prices both up and down. Headline risk. Natural disasters. Whether a trend continues or reverses the moment we open a position. Whether any individual trade wins or loses. How many winning or losing trades we have in a row. The battle for your long term trading success is won or loss in your head. The decision to whether keep going after losing money or to quit is made at the point of maximum frustration with the markets. To keep going you have to keep positive, and keep trading. Knowing the difference between you making a mistake or the market simple not matching your style will go a long way in keeping down your stress and negative self talk. |
DENNIS GARTMAN'S RULES FOR TRADERS
1. Never, under any circumstance add to a losing position! Ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!
2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.
3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.
4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is too low. Nor can we know what price is too high. Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed cheap many times along the way.
5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.
6. Markets can remain illogical longer than you or I can remain solvent according to our good friend, Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.
7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds as they shall carry us higher than shall lesser ones.
8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect gaps in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.
9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In good times even errors are profitable; in bad times even the most well researched trades go awry. This is the nature of trading; accept it.
10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market’s technicals. When we do, then, and only then, can we or should we, trade.
11. Respect outside reversals after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more weekly and monthly, reversals.
12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.
13. Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen just as we are about to give up hope that they shall not.
14. An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.
15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first addition should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.
16. Bear markets are more violent than are bull markets and so also are their retracements.
17. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are right only 30% of the time, as long as our losses are small and our profits are large.
18. The market is the sum total of the wisdom and the ignorance of all of those who deal in it; and we dare not argue with the market’s wisdom. If we learn nothing more than this we’ve learned much indeed.
19. Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.
20. The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t. Do the trade that is hard to do and that which the crowd finds objectionable. Peter Steidlmayer taught us this twenty five years ago and it holds truer now than then.
21. There is never one cockroach! This is the winning new rule submitted by our friend, Tom Powell.
22. All rules are meant to be broken: The trick is knowing when and how infrequently this rule may be invoked!