Archives of “international trade” tag

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George Soros :Great Investor & The Ultimate Trader

  
  Education
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On September 16, 1992, Soros’ fund sold short more than $10 billion in pounds, profiting from the UK government’s reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the UK withdrew from the European Exchange Rate Mechanism, devaluing the pound. Soros’s profit on the bet was estimated at over $1 billion. He was dubbed “the man who broke the Bank of England”.

Stanley Druckenmiller, who traded under Soros,  was the genius behind the idea. Soros just pushed him to take a bigger size. In this case, the bigger size was one of the reasons why this trade worked. What is more important here is to highlight their position size. They risked their entire YTD gain (they were up 12%).

Just to give you a perspective of how ballsy it is to risk 12% of your capital on one trade, consider the following simplified example:

Let’s assume that your trading capital is 200k and you want to buy a stock at $50 with a stop at 47; hence you risk $3 per share.

Risking 12% of your capital, means 12% * 200k = 24,000.

Divide 24,000 by the amount you risk per share ($3) to get the total number of shares you could afford to buy, which in this case is 8000 shares. (more…)

Trading Wisdom – Paul Tudor Jones

  
  Education
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Paul Tudor Jones
Turned $1.5 million into $300 million in five years
“That cotton trade was almost the deal breaker for me. It was at that point that I said, “Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?”
I had to learn discipline and money management. I decided that I was going to become very disciplined and businesslike about my trading. I spend my day trying to make myself as happy and relaxed as I can be.
If I have positions going against me, I get right out; if they are going for me, I keep them. I am always thinking about losing money as opposed to making money. Risk control is the most important thing in trading. I keep cutting my position size down as I have losing trades.

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How to Develop Yourself as a Trader -Anirudh Sethi

  
Analysis, Education
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There is a well-known axiom in business: “Neglect to plan and you intend to fall flat.” It might sound chatty, yet the individuals who are not kidding about being fruitful, including traders, ought to take after these eight words as though they were composed of stone. Ask any trader who profits on a reliable premise and they will let you know, “You have two options: you can either efficiently take after a composed arrangement, or come up short.” Mastering the specialty of Forex trading is not as basic as it appears. Each and every day the number of retail traders in the internet trading group is expanding at an exponential rate because of its outrageous level of benefit potential. The master traders at Saxo have secured their money related opportunity in life just by trading the live resources in the market. Be that as it may, keeping in mind the end goal to profit in the internet trading world, you have to know how to deal with your Forex trading account available. Not at all like the expert traders, the tenderfoot traders in the monetary business bounce into the web based trading world without thinking about the market subtle elements and in this way they lose an immense measure of money. In this article, we will examine how to wind up noticeably an expert trader in the Forex trading world. On the off chance that you have a composed trading or venture design, congrats! You are in the minority. While it is still no undeniable certainty of achievement, you have disposed of one noteworthy barricade. On the off chance that your arrangement utilizes imperfect procedures or needs planning, your prosperity won’t come promptly, however at any rate you are in a position to diagram and adjust your course. By archiving the procedure, you realize what works and how to abstain from rehashing expensive slip-ups.

Acknowledging Direct Resources for Profit

In order to develop yourself as an expert Forex trader, you have to consider trading as your business. On the off chance that you take a gander at the expert traders in the money market then you will see that each and every one of them is trading the live resources in their Forex trading account with an extraordinary level. Much the same as the expert specialist the master in the monetary business likewise has a strong trading plan to trade the live resources in the market. A large portion of the fledgling traders in the budgetary market consider trading as a get rich speedy plan and at last, loses money in the internet trading world. So on the off chance that you genuinely need to wind up plainly an expert trader at that point ensure that you build up a trader’s attitude and consider trading as your business. Trading is a business, so you need to regard it in that capacity on the off chance that you need to succeed. Perusing a few books, purchasing an outlining program, opening an investment fund and beginning to trade is not a strategy for success – it is a formula for calamity. Once a trader knows where the market can possibly respite or invert, they should then figure out which one it will be and act as needs are. An arrangement ought to be composed of stone while you are trading, yet subject to re-assessment once the market has shut. It changes with economic situations and modifies as the trader’s aptitude level moves forward. Every trader ought to compose their own arrangement, considering individual trading styles and objectives. Utilizing another person’s arrangement does not mirror your trading qualities. Such a large amount of the reason numerous traders fall flat is that they never seek after trading the correct route, as an execution teach. They don’t have an organized procedure of learning. They don’t have the instruments to legitimately replay, audit, and right there trading. They don’t have guides to good example great trading rehearses. They don’t learn methodologies with genuine edges and rather trade arbitrary examples on outlines or features existing apart from everything else. They don’t have enough funding to survive their expectations to absorb information. They don’t discover the trading markets and styles that best fit their specific qualities.

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The World’s Worst Teacher

  
  Education
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The market often rewards bad behavior. You exit a stock because your stop is hit. You are okay with this because you followed your plan. The market then immediately reverses. You begin to think, “If only I stayed with the position.” The next time the market goes against you, you decide you are not going to get tricked again. This time though, the market does not reverse and what started out as a small manageable loss is now huge.

The market will give you loss after loss forcing you to abandon a methodology right before it takes off without you. On the flip side, the market will lull you into a false sense of confidence. You trade larger and larger, taking on excessive risk. You print money until your risks become so excessive that one or two bad trades wipe you out.

Learn from the market, but realize that sometimes it can be a lousy instructor.

TEN WAYS TO BE A TRADER NOT A GAMBLER

  
  Education
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  1. Trade based on the probabilities NOT the potential profits.
  2. Trade small position sizes based on your account NEVER put your whole account at risk of ruin.
  3. Trade a plan NOT emotions.
  4. Always enter a trade with an edge that can be defined DO NOT trade with entries that are only opinions.
  5. Trade based on quantifiable facts NOT opinions.
  6. Trade after extensive research on what works and what does not. Don’t trade in ignorance.
  7. Trade with the correct position sizing since risk management is your number one priority and profits are secondary concern.
  8. Trade in a way that eliminates any chance of financial ruin NOT to get rich quick.
  9. Trade with discipline and focus DO NOT change the way you trade suddenly due to winning or losing streaks.
  10. Trade in the present moment and DO NOT get biased due to old wins or losses.

The Most Powerful Trader in the World

  
  Education
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Once you’ve mastered putting in protective stops, you’ll feel empowered. Why? Because at that point you are emotionally balanced and are WILLING to transfer the risk to someone else and exit with a small loss. You have emotional and financial understanding that trading is a process and that any one trade is meaningless over 1,000s of trades.

At that point you have personal power in that trading is just one part of your day and your life is abundant. And you don’t need to tell anyone about your trading. You’re in love with your process – be it mechanical or discretionary – and not in love with any one particular trade.

At that point, you’ll also realize that you can’t really speak to anyone about trading anymore. Most amateurs don’t understand that trading like a professional requires a combination of self-awareness, emotional intelligence, and some level of technical proficiency.

You won’t be able to communicate with such a person as they are speaking one language and you another. They are ignorant about your expertise and necessary behavior. It’s a dialect all its own and it’s unique to you and only you.

This ability is learned behavior – but most will never achieve this level because they are focused on the wrong principles. They’re missing the 80% of the puzzle that is most significant.

What are these elements of planning? 6 Questions

  
  Education
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1) What you’re trading – Why are you selecting one instrument to trade (one stock, one index) versus others? Which instruments maximize reward relative to risk?

2) How much you’re trading – How much of your capital are you going to allocate to the trade idea versus other ideas?
3) Why you’re trading – What is the rationale for the trade? Why does the trade idea provide you with an “edge”?
4) What will take you out of the trade – What would lead you to determine that your trade idea is wrong? What would tell you that the trade has reached its profit potential?
5) Where you will enter the trade – Given the criteria that would take you out of the trade, where will you execute your idea to maximize the reward you’ll obtain relative to the risk you’ll be taking?
6) How you will manage the trade – What would have to happen to convince you to add to the trade, scale out of it, and/or tighten your stop loss?

Lessons for traders

  
  Education
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  • Price goes up or down, from point A to point B, due to fundamental conditions. Hence we must understand fundamentals. However, the path price takes is not direct; it is driven by the news and emotions of the day. That’s where technical analysis shines.
  • Don’t bet big on any trade.
  • Use money management, nothing is more important to survival.
  • Fade the advisors and public; they are most often wrong while the commercials [the big guys] are most often correct.
  • Don’t let emotions run your trading game.
  • Trade what you see, not what someone tells you that you should be seeing. Forget the news; trade what you see.

50 One Liners for Traders

  
Analysis, Education
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  1. Don’t try to read into other people’s trading decisions.
  2. By all means like a stock, but don’t try to be best friends with it forever. Instead, spend time nurturing positions that are being kind to you.
  3. Beware the Beginners Cycle. The want to be right will cause you to collect courses and books and will only be a costly and frustrating exercise. The secret is elsewhere.
  4. Actually, there is no secret. It’s all in the maths.
  5. Losses when trading are inevitable, but losses should always be limited.
  6. Have a prepared trading plan so you don’t rush into bad decisions. Time spent planning will help you avoid catastrophic losses, riding the emotional roller coaster, and other unnecessary headaches.
  7. Get off your high horse. Your ego will eventually cost you dearly.
  8. Validate your strategy before you risk your capital.
  9. Don’t waste your time on other trader’s successes. The only person you’re competing against is yourself.
  10. 10. Ignore any broker that tells you to buy when there is blood in the streets. You can be sure it’s not theirs.
  11. Outsource to people who do the stuff they’re better at so you can do the stuff you’re better at.
  12. Make haste slowly. Ensure you have a validated strategy that has an edge and ensure you have a full understanding of the journey ahead of you. The markets will always be there. What won’t be there if you’re in too much of a hurry is the capital in your account.
  13. Understand positive expectancy. When you see it, you’ll get it.
  14. Ask someone you trust if you are unsure.
  15. Risk a small amount of capital on each trade.
  16. Sentiment will drive the market, or a stock, a lot further than logic ever will.
  17. Only fools claim to know the future.
  18. Don’t be a dick for a tick. Saving a few cents here and there will only cost you dollars later on.
  19. You can’t control the market. Don’t waste your time by watching every trade tick along.
  20. Find a strategy that makes sense to you.
  21. Be curious and keep a trading diary. Don’t be scared to learn something new.
  22. Explore new ideas and opportunities often.
  23. Let go of things you can’t change. Concentrate on things you can.
  24. There is no point questioning the market.
  25. The market will pay you when it’s ready. You just need to be there when it does.
  26. Find a strategy you actually enjoy following.
  27. Realize that the harder you work, the luckier you will become.
  28. Risk not thy whole wad. There is a reason why compounding is the 8th Wonder of the World.
  29. However good or bad a situation is now, it will change. Accept that positive expectancy sometimes takes time to show its hand.
  30. Realize that being right does not equate to profits.
  31. 45% of trades will tend be profitable. 45% will tend be losses. 10% will be breakeven. Your job is to make the winners count.
  32. Make mistakes, learn from them, laugh about them, and move along.
  33. Successful trading is not a sprint. Buffet didn’t earn his reputation in a single year – or decade.
  34. The only thing you can control is the amount of money you’re willing to lose on each trade.
  35. Don’t over think things. Simple works best. Complex will eventually break.
  36. Understand why your strategy makes money.
  37. If you can’t pull the trigger it’s usually because you don’t trust the strategy you’re using. Stop and re-evaluate.
  38. Trends can’t not exist.
  39. The biggest hurdle to overcome is between your ears.
  40. Don’t fear the market. It can’t actually hurt you. You can hurt you though.
  41. The object of gaining a trading education isn’t knowledge; it’s to enable action.
  42. Never move a stop backward. You’re mind is screwing with you.
  43. Rules you can’t or won’t follow are of no use to you.
  44. Your initial reaction to any adverse situation is usually wrong.
  45. Risk and volatility are not the same. Volatility can increase returns. Risk can increase losses.
  46. Think long term with regard to strategy application. Performance and trade outcomes in the short term are random.
  47. The keys to success are consistency, discipline and patience. They cannot be bought.
  48. Every stock that goes bankrupt exhibits a sustained downtrend first.
  49. Any strategy is only as good as the person using it.
  50. Take responsibility for every decision you make.

Mistakes -Traders Must Read

  
  Education
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  • A mistake means not following your rules. If you don’t have rules, everything you do is a mistake.
  • It is much better to trade a lower-scoring SQN system that fits you than a higher-scoring SQN system that doesn’t fit you.
  • You are responsible for everything that happens to you. When you understand this, you can correct your mistakes. We call this respond-ability.
  • Repeating the same mistake over and over again is self-sabotage.
  • A trader who makes one mistake in 10 trades is 90 percent efficient; that 10 percent drop in efficiency could be enough to make him/her a losing trader.

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