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GAMBLING ADDICTION with trading

  
Economy, Education
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how many of you never seem to win consistently?

how many of you hold on because you did have some winning days which means you have potential?

how many of you tell yourselves that its not an addiction,its just a passion you have?

how many of you keep on replenishing your trading accounts because just like any business,you always lose money at the start?
how many of you tell yoursleves your losses are the BEST THING that ever happened because thats the best way to learn?

how many of you think of crafty ways to get some extra money wired into your trading accounts?

how many of you say you would have won if you only “stuck to your discipline”?

how many of you are just waiting FOR THAT SPECIAL DAY WHEN EVERYTHING FINALLY CLICKS AND YOU’VE FINALLY FOUND THAT EDGE?

how many of you fall into a depression and feel as if someone has hit you in the heart with a hammer aftr a big loss.

how many of you cannot wait for the next day to make some money back?

my favorite: “tomorrows a new day and i will start fresh, a new trading style that will be disciplined”.

there are many guys that make lots of money trading for a living..really,you seriously believe that?

Five surprising lessons from a career on Stock Market

  
  Education
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1) Deep thought: Surprisingly few people rolled up their sleeves and thought deeply about why things in market are the way the are. What causes markets to go up and down? Why do things blow up? Why do most investors under-perform markets? Lots of myths and urban legends, not nearly as much quantitative evidence.

If you get really deep about it and study the data, there are some rules to learn. To succeed in markets, one needs to become a philosopher-mathematician.

2) Long-Term Greedy: Too many people went for the easy money, but that was never what motivated me. It was more about intellectual curiosity and honing ones craft, and less about the quick hit. I made less money compared to many of my peers, but I kept more of it and never blew up.

The phrase “long-term greedy” was coined by former Goldman Sachs director Gus Levy many years ago. You can make (lots of) money over time, but only by serving clients’ interests. Its amazing to me that view is so far out of fashion today.

3) Hard Work: There is no other field where a person of average skills and intelligence who is willing to put their head down and work hard can makes 100s of thousands or even millions of dollars a year — but only if they are diligent and patient and willing to put in the hours. (more…)

Trading Quotes for Traders

  
  Education
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The tape tells the truth, but often there is a lie buried in the human interpretation
~~Jesse Livermore~~

 
 Your human nature prepares you to give up your independence under stress. when you put on a trade, you feel the desire to imitate others and overlook objective trading signals. This is why you need to develop and follow trading systems and money management rules. They represent your rational individual decisions, made before you enter a trade and become a crowd member.
~~A. Elder~~

 
 Charts not only tell what was, they tell what is; and a trend from was to is (projected linearly into the will be) contains better percentages than clumsy guessing
~~R. A. Levy~~ 

 
The biggest risk in trading is missing major opportunities, most of enormous gains on my accounts came from 5% of trades.
~~Richard Dennis~~

 
Take every gain without showing remorse about missed profits, because an eel may escape sooner than you think
~~Joseph de la Vega~~

 
Losing is part of trading. The best traders don’t get perturbed by losing trades, since over the long run they know they will be successful more often than not. When you are afraid of losing, you end up losing or missing opportunities because you are afraid to trade.
~~Trading to Win, Ari Kiev~~

 
In trading, the vast market consists of neophytes who are looking for magical answers to make lots of money quickly and with little risk. They want specific ideas. They want to be told exactly what to do. Those looking for such things will not find them. They will not be successful as long as they continue to favor the easy over the
truth.
~~Curtis Faith ~~ 

 
The difficulty in trading lies not in the concepts but in the application.
Curtis M. Faith

Market Wisdom from Bernard Baruch

  
  Education
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You don’t read a lot about Bernard Baruchanymore, but his teachings about the market are useful today as they always have been. There are several good books about him including his own“Baruch: My Own Story” which I recommend highly especially for those of you looking for a book to take with you on your summer vacations.

Although I’ve provided several quotes from Bernard Baruch through the years, here are some notes that I’ve taken from reading about him and his market wisdom. Enjoy!

    • Baruch started out as most traders do – i.e. losing lots of money because he lacked the knowledge, experience, & discipline. “You have to lose money in order to better yourself.”
      • Real success in the market takes time and money. Unfortunately “most people view the market as the place where the miracle of great and quick riches can be performed with little effort.”
        • Overtrading and holding too many positions in his early years caused Baruch to go broke many times before he developed the discipline to succeed.
          • A successful speculation is “a man who observes the future and acts before it occurs.” Acting swiftly in the market is important.
            • After losing money from the recommendation of others, Baruch focused himself on the facts. “One must search through a maze of complex and contradictory details to get to the significant facts…..Then he must be able to operate coldly, clearly, and skillfully on the basis of those facts.” The challenge for the successful speculator is “how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts.” Moreover, “if you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right.” (more…)

            Key Lessons For All Traders

              
              Education
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            Find a Trading Method That Fits Your Personality

            Traders must find a methodology that fits their own beliefs and talents. A sound methodology that is very successful for one trader can be a poor fit and a losing strategy for another trader. Colm O’Shea, one of the global macro managers I interviewed, lucidly expressed this concept in answer to the question of whether trading skill could be taught:

            If I try to teach you what I do, you will fail because you are not me. If you hang around me, you will observe what I do, and you may pick up some good habits. But there are a lot of things you will want to do differently. A good friend of mine, who sat next to me for several years, is now managing lots of money at another hedge fund and doing very well. But he is not the same as me. What he learned was not to become me. He became something else. He became him.

            Trade Within Your Comfort Zone

            If a position is too large, the trader will be prone to exit good trades on inconsequential corrections because fear will dominate the decision process. Steve Clark, an event driven manager, advises, you have to “trade within your emotional capacity.” Similarly, Joe Vidich, a long/short equity manager warns, “Limit your size in any position so that fear does not become the prevailing instinct guiding your judgment.”

            In this sense, a smaller net exposure may actually yield better returns, even if the market ultimately moves in the favorable direction. For example, Martin Taylor, an emerging markets equities manager, came into 2008 with a very large net long exposure in high beta stocks in an increasingly risky market. Uncomfortable with the level of his exposure, Taylor sharply reduced his positions in early January. When the market subsequently plunged later in the month, he was well positioned to increase his long exposure.

            Had Taylor remained heavily net long, he might instead have been forced to sell into the market weakness to reduce risk, thereby missing out in fully participating in the subsequent rebound.  (more…)

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