Naked Truth- Purpose of markets is to redistribute wealth from the many to the few. Markets would cease to exist if not true.
Archives of “Human Interest” tag
rssGreat excerpt from Isaacson's Benjamin Franklin. A story of he and Adams sharing a bed one night.
Which Kind Of Person Are You?
What kind of person you are “outside the charts” will help determine what kind of trader you will be “inside the charts”.
If you are of the first kind, “the wills”, you will overcome all the obstacles on your way to consistent success. You will accept, even embrace, uncertainty as the driving force behind the next big opportunity for gain. You will lose gracefully and move on to the next trade, knowing that trading is a game of probabilities and possibilities; not certainties and absolutes. You will leave money on the table, thankful for what you were able to gain; not bitter by what was left. If you are of the first kind you will succeed. You will indeed.
If you are of the second kind, “the won’ts”, you will look for the always elusive easy road to riches. You won’t believe in the effort required to become a disciplined trader, driven by solid habits repeated daily. You won’t apply the skill necessary for managing risk as that would require planning and preparation, something you just do not have time for. You won’t develop your own well defined trading edge, depending instead upon others to do it for you. If you are of the second kind your opposition to anything other than what is easy will make it quite difficult to succeed when times get tough, and they will but you won’t.
If you are of the third kind, “the can’ts”, you will blame everyone and everything for your failures. You can’t succeed because you are too busy finding fault in any trading strategy that produces a loss. You can’t succeed because anyone who does so has some special knowledge or gift that you obviously cannot possess. You can’t succeed because the market is rigged. If you are of the third kind…quit. You are a quitter with a quitter’s attitude. Be in the majority. Be a can’t. It’s easy.
So, what kind of person (trader) are you?
Two masters
Always smile
Someone said to William James, an American philosopher and psychologist: “You are the only happy person I know: you always have a smile on your lips, even when facing great difficulties.”
“I am not always smiling because I am happy,” answered William James. “I am happy because I am always smiling.”
Wise man’s answer
A king asked Saadi of Shiraz: “While travelling through the cities of my country, do you use to think of me and about my works?”
“Oh King, I think of you, whenever I forget about God,” was the wise man’s answer.
5 Quotes from Market Wizard Martin Taylor
As I made money, I got more and more confident, and I increased the position each time. Ultimately, I put on a position where I was completely wrong. I just held it, held it, and sold it when my account was back down to 2,000. Over a five-day period, I lost everything that I had made over the prior six months. – Martin Taylor
This was Taylor’s description of how he got started in his trading. It is a telling example that almost any trader can relate to. Learning how to take small losses is extremely important to all traders, regardless of their approach. For Taylor, it took a tremendously big loss to get the point across.
The conclusions I drew from losing all my profits were: First, I didn’t know what I was doing, and second, I really wanted to know what I should be doing. I also realized that trying to make money out of big macro moves was a mug’s game. – Martin Taylor
That huge loss really shook Taylor’s confidence. He realized that there was quite a bit that he still needed to learn.
His intellect, however, often got in the way of his investing. If he was bullish on a stock for 10 reasons, he could always think of nine reasons to be bearish, which would cloud his mind to such a degree that he would end up not buying it. – Martin Taylor
Consider Factors That Will Affect Market Participants’ Perceptions Even if You Don’t Believe in It
- I have always been a discretionary trader with my analysis based on fundamentals…. Whatever kind of a trader you are, you have to be aware of perceptions in the market place, that can influence the participants’ behavior. If a lot of people are charting and they think that a certain level is a key level for whatever reason – lunar, astrological, who the hell knows – then you have to be aware of it. Because it is going to cause a certain number of market participants to react and you have to be aware of it. You have to understand how that is going to affect your position.
- You have to be aware of all these technical techniques, such as momentum, because a lot of market participants use them and so they can affect the market.
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Watch Anger-Greed-Fear -Frustration-Disparity-Pain :When You Trade
Anger – Do you ever catch yourself yelling out loud or cursing at the screen? Or complaining about the market like it is out to get you? This is a very common and dangerous emotion. It can easily destroy your belief in trading and the belief in having an edge when trading.
Greed – You see that your trade is well up and you start picturing that new sports car. You think to yourself “if I could just make 50 % more” but what can often happen in these situations is that your profit disappears and your trade is now under water, all thanks to greed.
Fear – Fear of losing money can make traders skip on a perfectly valid trade. It might also make traders take a small loss on a trade, to then see it turn around and give profit when all the time you were taking the correct steps of entering a stop loss which was never taken out.
Frustration – Why did I not take it? Why do I always take the losing trades and not the winners? These are very common questions a trader asks himself many times during a trading career. This frustration can destroy the motivation and lead to a previously mentioned emotion; anger. (more…)
5 Essential Qualities of the Speculator
1. Self-Reliance. A man must think for himself,must follow his own convictions. George MacDonald says: “A man cannot have another man’s ideas any more than he can another man’s soul or another man’s body.” Self-trust is the foundation of successful effort.
2. Judgment. That equipoise, that nice adjustment of the faculties one to the other,which is called good judgment, is an essential to the speculator.
3. Courage. That is, confidence to act on the decisions of the mind. In speculation there is value in Mirabeau’s dictum: “Be bold, still be bold; always be bold.”
4. Prudence. The power of measuring the danger, together with a certain alertness and watchfulness, is very important. There should be a balance of these two, Prudence and Courage;Prudence in contemplation, Courage in execution.
Lord Bacon says: “In meditation all dangers should be seen; in execution one, unless very formidable.”
Connected with these qualities,properly an outgrowth of them, is a third, viz:promptness. The mind convinced, the act should follow. In the words of Macbeth; “Henceforth the very firstlings of my heart shall be the firstlings of my hand.” Think, act, promptly.
5. Pliability. The ability to change an opinion,the power of revision. “He who observes,”says Emerson, “and observes again, is always formidable.”
The qualifications named are necessary to the makeup of a speculator, but they must be in well-balanced combination. A deficiency or an overplus of one quality will destroy the effectiveness of all. The possession of such faculties, in a proper adjustment is, of course, uncommon. In speculation, as in life, few succeed,many fail.
The 10 Signs You Might Have a Fear of Failure
The following are not official diagnostics but if you feel these criteria are very characteristic of you (‘very’ being an important distinguishing marker as we all feel these things to some extent), you might want to examine this issue further, either by doing more reading about it or talking to a mental health professional.
1. Failing makes you worry about what other people think about you.
2. Failing makes you worry about your ability to pursue the future you desire.
3. Failing makes you worry that people will lose interest in you.
4. Failing makes you worry about how smart or capable you are.
5. Failing makes you worry about disappointing people whose opinion you value.
6. You tend to tell people beforehand that you don’t expect to succeed in order to lower their expectations.
7. Once you fail at something you have trouble imagining what you could have done differently to succeed.
8. You often get last minute headaches, stomachaches, or other physical symptoms that prevent you from completing your preparation.
9. You often get distracted by tasks that prevent you from completing your preparation that in hindsight were not as urgent as they seemed at the time.
10. You tend to procrastinate and ‘run out of time’ to complete you preparation adequately