Archives of “long haul” tag

rss

Are You A Professional Trader?

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Going Pro, means leaving the amateur life behind. It means showing up on time and doing the work. No excuses. No calling in sick. No blue flu.

In fact, Pressfield has a list of 20 things that a professional life entails. Here they are…

  1. The professional shows up every day
  2. The professional stays on the job all day
  3. The professional is committed over the long haul
  4. For the professional, the stakes are high and real
  5. The professional is patient
  6. The professional seeks order
  7. The professional demystifies
  8. The professional acts in the face of fear
  9. The professional accepts no excuses
  10. The professional plays it as it lays
  11. The professional is prepared
  12. The professional does not show off
  13. The professional dedicates himself to mastering technique
  14. The professional does not hesitate to ask for help
  15. The professional does not take failure or success personally
  16. The professional does not identify with his or her instrument
  17. The professional endures adversity
  18. The professional self-validates
  19. The professional reinvents herself
  20. The professional is recognized by other professionals (more…)

Alexander Elder's 7 Rules for Traders

  
  Education
#  #  #  #  #  #  #  #  #  #  #

1. Decide that you want to trade for the long haul. i.e decide that you want to trade 20 years from now.
2. Learn as much as you can. Read, and listen to the experts, but keep a healthy disbelief about everything.
3. Do not be greedy and rush to trade – take your time to learn. The market will be there with many good opportunities in the months and years ahead. 
4. Develop a method for analyzing the market, that is, if A happens, B is likely to happen. Markets have many dimensions – use several analytics methods to confirm trades.
5. Develop a money management plan. Your first goal should be of long term survival, second goal, a steady growth of capital and third goal, making high profits.
6. Be aware the trader is the weakest link in the system. Learn how to avoid losses and develop your method of cutting out impulsive trades.
7. Winners think, feel and act differently than loosers. You must look within yourself and strip away the illusions and change your old way of thinking, acting and being. Change is hard, but if you want to be a successful trader, you have to work on changing your personality.

4 Types of Traders

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

The first type of profitable discretionary trader is the one who has a natural feel for the market.  When you talk to one of these traders and ask them about their trading at some point you’ll hear them say something about ‘feeling the market was this way or that….’. These are traders who over the years have acquired a lot of implicit knowledge of the market and its participants. They understand what moves markets and they also have the required self-trust to act on their ideas and to protect themselves when they are wrong.  Their personalities allow them to have the self-trust to know their limits and believe in their capabilities. We could call them a ‘natural born trader’; and there are very few of them. Although Jesse Livermore eventually blew-out, he’s an example of this rare type of natural trader.

 The second type of profitable trader – or more accurately temporarily profitable – is the lucky trader; the trader who’s P&L is currently in an up swing but they’ll soon be negative. Often these traders either got lucky with a number of trades and can not replicate it, or they learned the habit of holding onto losing trades and they got lucky when those positions came back. This accounts for the largest number of “profitable traders” – but for these traders the money often leaves faster than it arrived. (more…)

Accept you will make many mistakes

  
  Education
#  #  #  #  #  #

Those who learn how to minimize the damage when they are wrong and who readily own up to the mistakes they make will do far better over the long haul. Making mistakes is a part of this game, but knowing how to handle them is everything. Likewise, if you attach your ego to your portfolio’s performance you are destined for failure. The market absolutely loves to kill those with big giant egos and who look for the markets as a place to prove how smart they are. Markets chew and spit out these folks routinely for good reason and they will continue to do so at every available opportunity.

Trading Against the Elephant

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Once upon a time, there were six blind men. The blind men wished toknow what an elephant looked like. They took a trip to the forest and with the help of their guide found a tame elephant. The first blind man walked into the broadside of the elephant and bumped his head. He declared that the elephant was like a wall. The second one grabbed the elephant’s tusk and said it felt like a spear. The next blind man felt the trunk of the elephant and was sure that elephants were similar to snakes. The fourth blind man hugged the elephant’s leg and declared the elephant was like a tree. The next one caught the ear and said this is definitely like a fan. The last blind man felt the tail and said this sure feels like a rope. Thus the six blind men all perceived one aspect of the elephant and were each right in their own way, but none of them knew what the whole elephant really looked like.

Oftentimes, the market poses itself as the elephant. There are people who say that predicting the market is like predicting the weather, because you can do well in the short term, but where the market will be in the long run is anybody’s guess. (more…)

If you want to be a successful trader or investor

  
  Education
#  #  #  #  #  #

One You need to be able to persist and keep committed to your goal of being successful for the long haul.  If there is nothing that is going to stop you from being a trader you will get there.

Two You do need to know when to quit but not as relates to the above point.  You need to know when to quit a trade, a theory, a strategy and you need the wisdom from your persistence at this business to know how and when to do this.

Three You’ve always got to be flexible.  You have to duck and dive with the best of them.  You’ve got to be able to change direction on a dime or you’re dead meat in this game.

Accept you will make many mistakes

  
  Education
#  #  #  #  #  #

Those who learn how to minimize the damage when they are wrong and who readily own up to the mistakes they make will do far better over the long haul. Making mistakes is a part of this game, but knowing how to handle them is everything. Likewise, if you attach your ego to your portfolio’s performance you are destined for failure. The market absolutely loves to kill those with big giant egos and who look for the markets as a place to prove how smart they are. Markets chew and spit out these folks routinely for good reason and they will continue to do so at every available opportunity.

The Mathematics of Persistence

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Many years ago (circa 2005), I came across the below food-for-thought piece from a musical theorist named Lee Humphries. The ideas presented intrigue to this day.

Investment assumptions aside — An 8.5% passive return? Good luck with that— the concepts of compounding and Metcalfe’s law (aka network effects) apply strikingly well to the development of expert knowledge… and the theory and practice of trading.

What’s more, a persistently cultivated “perception of subtleties” is, indeed, a large part of what trading is all about.

So without further ado…

The Mathematics of Persistence (more…)

Trading is stressful

  
  Education
#  #  #  #  #  #  #  #  #

 It certainly can be stressful, and it certainly is stressful for many. It doesn’t have to be, however. Successful traders have a certain mindset. They put little importance on any given trade. Their focus is on the long haul, not short-term gains. They know that if they attend to the aspects of trading that are within their control (i.e., trade selection, entry, risk control, and trade management), the profits will take care of themselves.

Go to top