| If your not sure and don’t have an edge, cash IS a strategy. If you are on a cold streak, reduce size by 70% and tighten stops for a week. Stocks aren’t people, they cant be trusted, an algorithm doesn’t care that you think you know the story or the chart. Don’t be “all in” in any name, you will blow up your account. It’s totally cool to change your mind right after a trade, the market changes by the minute, so should you. Pick one strategy and stick to it. This may take time if you are a beginner. You have to break a few eggs to make an omelet, so take losses but keep them very small. I haven’t taken someone else s idea in a long time, you have just as good a chance of being right or wrong as some other putz. Don’t have 15 technical indicators on your screen, that’s and EKG not a chart. Less is more. Don’t trade pissed off, it will crush your P&L Guess who wins when you “revenge” trade? Take partial profits on the way up and raise your stops. When you have three losing trades in a row, take a walk around the block. You may get an epiphany, at the very least it’s therapeutic. Realize early that the market will always be smarter than you. |
Archives of “guess” tag
rssMy 2011 Predictions
My 2011 predictions are really one prediction: I predict that no one will accurately predict much in the markets over the course of the year. Sure, someone might be flip a coin and get lucky with a guess here or there, but what prediction are you really relying on with your hard earned cash? Exactly.
-Avoid Blue Channels during Trading hrs
-Avoid Phone Calls during Trading hrs
-Avoid Website Analysts /SMS services.(95% or More are Fraud )
-Always remember 90% Traders will lose Money ,5% will be in No Profit -No loss zone and only 5% will always earn…This ratio will remain same foreover.
Techically Yours
Anirudh Sethi Report/Baroda
Trading Wisdom – Trend Following
For most people, trend following is extremely counter-intuitive. Why? Because it’s human nature to look for bargains before buying. People tend to buy when it’s low and sell when it’s high. But, how many are bold enough to do the opposite by buying high and selling even higher? My guess is; not many. And what about risk management? Yeah, what about it? Remember the dot com bubble era? Out of all the people that got caught up in that frenzy, how many do you think even had a risk management plan in place? Hmmm…
Back in those days, I’ve never even heard of a stop loss. We all just jumped in blindly with dreams of making it big. And a lot of us got burned. Really bad. All the warning signs where there and yet we chose to ignore it. We foolishly rode our stocks all the way down and in the process, destroying every little glimmer of hope that we had for a turn-around. A lot of us lost 80-90% of our so-called “long term investment.” It’s tragic. But we can all learn from this valuable lesson.
Trend following is a life philosophy. It works in trading and it also works in daily life. It’s simply a matter of sticking with what works and getting rid of what’s not. That’s it! It’s a deceptively simple little system that can be applied into all aspects of your life. And if you follow this line of thought, I guarantee that you will see dramatic improvements. You just can’t help but to get better because ultimately, what are you left with in the end? That’s right, WINNERS!
Ego and Fear
But of course “ego” in trading reveals itself in subtler ways. I came to realize that after watching any chart for a while I would form an confident opinion about where the price was headed. “Okay, that’s a bottom there.” “Now the price is going to reverse and test that last support level.” Thinking I could predict the market was clearly egotistical.
But of course “ego” in trading reveals itself in subtler ways. I came to realize that after watching any chart for a while I would form an confident opinion about where the price was headed. “Okay, that’s a bottom there.” “Now the price is going to reverse and test that last support level.” Thinking I could predict the market was clearly egotistical.
So one big change has been to no longer guess where the price is going. I wait for trends where ANYBODY can see the price is going somewhere, and trade that trend. Makes for a lot more quiet periods of no trades but more successful trades when they do occur.
“Fear” is another big issue for traders and for me the issue is “not having enough of it”. I’ve been willing to bet the bank on a hunch and have been working to change that. Now when I enter a trade I use mental imagery to escalate my fears so that I trade more responsibly. Have you seen the iMax films “Everest” or “The Alps”. Currently I imagine I am high up the sheer face of a rock cliff and the only thing keeping me alive is my attention to the security of the pitons and the condition of the ropes. This helps me be more selective in my entries and in placing my stops.
How do fear and ego enter into your trading? Are you still trying to guess where price is going? Are you imagining yourself on the edge of a cliff, or are you already spending the profits you haven’t yet banked?
Wisdom Thoughts for Traders
If your not sure and don’t have an edge, cash IS a strategy.
If you are on a cold streak, reduce size by 70% and tighten stops for a week.
Stocks aren’t people, they cant be trusted, an algorithm doesn’t care that you think you know the story or the chart.
Don’t be “all in” in any name, you will blow up your account.
It’s totally cool to change your mind right after a trade, the market changes by the minute, so should you.
Pick one strategy and stick to it. This may take time if you are a beginner.
You have to break a few eggs to make an omelet, so take losses but keep them very small.
I haven’t taken someone else s idea in a long time, you have just as good a chance of being right or wrong as some other putz.
Don’t have 15 technical indicators on your screen, that’s and EKG not a chart. Less is more.
Don’t trade pissed off, it will crush your P&L
Guess who wins when you “revenge” trade?
Take partial profits on the way up and raise your stops.
When you have three losing trades in a row, take a walk around the block. You may get an epiphany, at the very least it’s therapeutic.
Realize early that the market will always be smarter than you.