Archives of “important things” tag

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10 Keys to become Consistent Trader and increase your Profitability

  
  Education
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  1. Think of trading as a business and have a trading plan.
  2. Make sure that the strategies you select, match your personality so you can follow them.
  3. Have a realistic expectation of what your returns are. Include all the costs associated with your trading business.
  4. Have an idea for your risk/reward ratio. Don’t confuse trading with gambling. If you are increasing your position, make sure that your strategy warrants it.
  5. Have trading rules and follow them. Think about them as contingency plans. Because when your emotions are very high, the tendency is that you make very poor decisions that can cost you your account!
  6. Be flexible to the market conditions. When you see the market as it is, you have a much better chance of managing your portfolio and increasing your profits.
  7. Take responsibility for your results. Taking responsibility does not mean that you have control of everything that happens. It means that you have a choice of how to react to the things that happen.
  8. Find out why you are in the trading business. If it is for the excitement of it, find other hobbies or activities that you can get your excitement from.
  9. Keep track of your performance. This is a way of objectively looking at how you are doing, what you did right and what you learned. Be gentle with yourself.
  10. One of the most important things that people don’t handle is their Emotional Risk. When emotions run high, the quality of decisions goes down. It is very important to learn how to react to your emotions and thus increase your profits.

The Wall Street Book Everyone Should Read

  
  Education
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In 1997, though, such arguments were pretty close to unheard of. Which is what makes Doug Henwood’s book Wall Street, published that year, such an amazing document. Along with explaining in clear if caustic terms how financial markets work, the book prefigures almost every criticism of the financial system that’s been levied since the crisis of 2008. An overleveraged housing market?Check. A link between financial sector growth and income inequality? Check. A natural tendency toward instability in financial markets? Check.

I don’t want to paint Henwood, who edits a newsletter called the Left Business Observer, hosts aweekly radio show, and knows more about economic indicators than anyone has a right to, as some kind of Nostradamus. In Wall Street he doesn’t so much make predictions as expose, in his crotchety, almost absurdly erudite way, the inconsistencies and contradictions in conventional views of how the financial world is supposed to work. (more…)

95% of profits come from 5% percent of trades

  
  Education
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RELAX-JUSTA high return/high risk trader will have 95% of profits come from 5% percent of trades. What this is telling you is that there is no need to “overtrade” just for the action. The bulk of profits are made in the waiting, not the trading. This should free up your time for the more important things in life such as family, golf, Watching movies ,afternoon lapdances, etc.

Vigilance

  
  Education
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Vigilance is the non-stop guarding and protecting of important things. In trading there is nothing more important than money. The Professional Trader takes his money very seriously and has given it a more serious term: “Capital”. Capital is everything to the winning trader. It is not just the end goal, it is the means and the source before, during and after the trades. The Professional Trader guards his capital very closely because it will allow him to trade today, tomorrow, next week, next month and next year and beyond. If capital is not protected at all times, then the entire effort for the year can be gone and future opportunities are severely limited. Vigilance in trading means holding the protection of your money, your capital as your constant highest priority. Properly protecting your capital includes starting with enough to trade wisely and be able to stay in the game when the inevitable downturns and losing streaks occur. (more…)

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