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Richard Dennis – Market Wizard (Must Read )

  
  Education
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On the right psychological mindset:

For a lot of traders, it doesn’t matter so much whether their first big trade is successful or not, but whether their first big profit is on the long or short side. Those people tend to be perennial bulls or bears, and that is very bad. Both sides have to be equally OK. There can’t be anything psychologically more satisfying about one than the other. If there is, your trading is going to go askew.

On taking losses:

Since then, I have learned that when you have a destabilizing loss, get out, go home, take a nap, do something, but put a little time between that and your next decision. When you are getting beat to death, get your head out of the mixer. Looking back, I realized that if I had had a trading rule about losses, I wouldn’t have had that traumatic experience.

 

You mentioned that before you developed a mechanical trading system, you paid close attention to the trading process. Did you keep a log of what you did right and wrong, or was it a matter of memory?

Yes, I would write down observations and think about them. I thought about everything I was doing.

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10 Trading Skills-Must For Traders

  
  Education
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  1. Admitting that you are wrong the moment price action tells you that you are and getting out of a bad trade.

  2. Being patient and waiting for your entry signal and the patience to let a winning trade go as far aw it wants to before you exit.
  3. The discipline to trade the same regardless of how you feel at the moment.
  4. Following a trading plan instead of your ego.
  5. Trading in the direction of the trend in your time frame.
  6. The work ethic to do the homework on what works in trading before you put any money at risk.
  7. The passion to love the game enough to do what you have to do to break through to success.
  8. To accept your financial losses as tuition and the price of doing business not a blow to your abilities as a trader.
  9. Listen to those that are far more advanced as traders than you are.

  10. The perseverance to keep trading until you are successful at it not when you just want to quit.

Day Traders : Read These Rules EveryDay-Spend 10 Minutes

  
  Education
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  1. There is no single true path. 
  2. The universal trait is discipline.
  3. Trade your personality.
  4. Failure and perseverance are part of every successful trader’s life.
  5. Great traders are flexible.
  6. It takes time to become a successful trader.
  7. Keep a record of your market observations.
  8. Develop a trading philosophy.
  9. What is your edge?  Big picture tech, change, on the cusp, understand big trend before others, shifts.
  10. Confidence is important, and you build it from hard work.
  11. Hard work.
  12. Obsessiveness.
  13. Market wizards are innovators, not followers.
  14. To be a winner you have to be willing to take a loss!
  15. Risk control.  Stop-loss, or reducing position size, limit initial position size, short selling.
  16. You can’t be afraid of risk
  17. Some limit downside by focusing on undervalued stocks. (but still can drop.)
  18. Value alone is not enough.  Need catalysts.
  19. The importance of catalysts.
  20. Focus not only on when to get in, but when to get out

Wisdom is knowing the limits of your knowledge

  
Analysis, Education
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What does it mean to be wise? What is Wisdom?

One of the more interesting aspects to wisdom is self-awareness. “Thinking about wisdom,” writes Stephen Hall in his book Wisdom: From Philosophy to Neuroscience, “almost inevitably inspires you to think about yourself and your relationship with the larger world.” The book is an investigation into fuzzy questions such as how can it help us shed light on the process by which we deal with big decisions and dilemmas.

He writes:

Wisdom requires an experience-based knowledge of the world (including, especially, the world of human nature). It requires mental focus, reflecting the ability to analyze and discern the most important aspects of acquired knowledge, knowing what to use and what to discard, almost on a case by case basis (put another way, it requires knowing when to follow rules, but also when the usual rules no longer apply). It requires mediating, refereeing, between the frequently conflicting inputs of emotion and reason, of narrow self-interest and broader social interest, of instant rewards or future gains. Moreover, it expresses itself through an insistently social vocabulary of interactive behavior: a fundamental sense of justice (which is sometimes described as an innate form of morality, of knowing right from wrong), a commitment to welfare of social (and, for that matter, genetic) units that extend beyond the self, and the ability to defer immediate self-gratification in order to achieve the greatest amount of good for the greatest number of people. (more…)

10 Inspirational Buddha Quotes

  
  Education
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Many Buddha quotes that are handed down until today are both inspirational as well as reflecting deeper truth of reality. What can we learn, where can we be inspired from The Buddha for everyday life and our own development today?

 1. “All that we are is the result of what we have thought. The mind is everything. What we think we become.”

2. “All wrong-doing arises because of mind. If mind is transformed can wrong-doing remain?”
3. “Thousands of candles can be lit from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared.”

 4. “Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.”

5. “However many holy words you read, however many you speak, what good will they do you If you do not act on upon them?”
6. “Death is not to be feared by one who has lived wisely.”
7.”No one saves us but ourselves. No one can and no one may. We ourselves must walk the path.”
8.”In the sky, there is no distinction of east and west; people create distinctions out of their own minds and then believe them to be true.”

 9. “If we could see the miracle of a single flower clearly, our whole life would change.”

10. “The only real failure in life is not to be true to the best one knows.”

7 Things -Traders Must Accept

  
  Education
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  1. You will have to accept that over the long term at best only 60% of your trades will be winners. It will be much less with some strategies.
  2. Accept that the key to being a successful trader is having big wins and small losses, not big bets paying off. Big bets can lead quickly to you being out of the game after a string of losses.
  3. Accept that the best traders are also the best risk managers, even the best traders do not have crystal balls so they ALWAYS manage their capital at risk on EVERY trade.
  4. If you want to be a better trader then you need to accept that trading smaller and risking less is a key to your success. Risking 1% to 2% of your capital on any single trade is the first step to winning at trading. Use stops and position sizing to limit your losses and get out when your losses grow to these levels.
  5. You must accept that you will have 10 trading losses in a row a few times each year. The question is what your account will look like when they happen.
  6. You have to accept that you will be wrong, a lot.  The sooner you accept you are wrong and change your mind the better off you will be.
  7. If you really want to be a trader then you are going to have to accept the fact that trading is not easy money. It is a profession like any other and requires much work and effort and even years to become proficient. Expect to work for free and pay tuition to the markets through losses until you learn to trade consistently and profitably.

Trading is about math, ego control, risk management, psychology, focus, perseverance, passion, and dedication. If you are missing one, you may not make it. Trade wisely my friends.

The secret to trading success- U

  
  Education
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You are the weakest part of your system. It is a defeatist statement. It makes your expectation to fail easier to accomplish and more importantly it makes failure easier to handle. It shifts the pressure away from you and unto fate.

Would you fly on an airline if their motto was “Our pilots are the weakest part.” I do not think so. You are your system. Even if your system is automated you added the inputs, parameters.

Taking responsibility for your action is not easy. Taking control of the outcomes of trading or life is a huge responsibility. You will have moments of weakness, but you are not weak. The market does not go straight up and either does the road to success.

Apprasing Your Trading Relationship To Pride- 10 points

  
  Education
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1.Does your self-esteem rise and fall with your latest trading ?
2.Have you ever taken a trade just to prove your ability as a trader ?
3.Do you brag about your winning trades to others ?
4.Do you try to hide your losing trades from others ?
5.Do you ever make up false stories about your trading to impress others ?
6.Do you worry about what other people  think of your as trader ?
7.Make an honest self-assessment of your trading.
8.Complement yourself and give yourself credit when you do something right.
9.When you make a mistake or do something that doesn’t serve your trading ,plan how you will correct this tomorrow or in the future.Say to yourself ,”That’s not like me.I can do better.”
10.Notice your improvement and commit to doing better each day ,week ,month ,and year

You Never Know When You Will Drop Dead

  
  Education
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Arnold Schwarzenegger used to always say — Schwarzenegger, love him, hate him, I don’t necessarily have a feeling one way or the other, but he used to always say that a good pump in his weight-lifting world was as good as sex. I’d say hitting a home run is right there. The point is, getting to the point where you have got it on the line, you’re making something happen, you don’t give a shit what your neighbors think of you. You don’t give a shit what your family thinks of you. You’re just gonna take on the world. That’s it. That’s the goal. You live one time, one time and it’s over. If you go through life scared, if you go through life following the plan that your father told you to do, that your mother told you to do, or some other nonsense society told you to do: you need to get a steady job, you need a college degree, then you get a steady job, yada, yada, yada. Guess what, you’ll be 60, by the time you know it you’ll be 70, maybe you’ll be dead soon.

Stop waiting for the perfect opportunity to start living the way you want to live. 

What enables a trader to exit every trade the same way, with confidence?

  
  Education
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  • Preparation:  If you put yourself in the best possible position and you lose money at least you spent that money wisely.  Good things happen to those that are prepared because 90% of people do not know how to do it or are unwilling.  eye-4798
  • Purpose: Acting with purpose.  You prepared, you knew the risks, you executed the way you wanted to execute.  In cold blooded evaluation you would do it the same with the information you had at the time.
  • Protection:  Losing the invisible money is how I have seen many people blow up.  Invisible money is not locking in profits or losing more than your plan allowed.  If you lose what you intended to risk you own the trade, if you lose more the trade owns you.
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