1. Buying a weak stock is like betting on a slow horse. It is retarded. |
Archives of “loyalty” tag
rssA Dozen Reflections on Life and Markets
I’ve never seen a trader succeed whose explicit or implicit goal was to not lose. The trader who trades to not lose is like the person who lives to avoid death: both become
spiritual hypochondriacs.
No union was ever destroyed by a failure of romance. It is the loss of respect, not love, which ends a relationship.
Love, once present, never dies. It must be killed.
Sometimes we select markets–and trading styles–much as we choose romantic partners: by their ability to validate our deepest-held images of ourselves. Our choices generally succeed, for better or for worse.
Many a trader fears boredom more than loss, thereby experiencing the two in sequence. (more…)
Thirty Trading Rules for Traders
1. Buying a weak stock is like betting on a slow horse. It is retarded.
2. Stocks are only cheap if they are going higher after you buy them.
3. Never trust a person more than the market. People lie, the market does not.
4. Controlling losers is a must; let your winners run out of control.
5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
7. Emotional traders want to give the disciplined their money.
8. Trends have counter trends to shake the weak hands out of the market.
9. The market is usually efficient and can not be beat. Exploit inefficiencies.
10. To beat the market, you must have an edge.
11. Being wrong is a necessary part of trading profitably. Admit when you are wrong.
12. If you do what everyone is doing you will be average, so goes the definition.
13. Information is only valuable if no one knows about it.
14. Lower your risk till you sleep like a baby.
15. There is always a reason why stocks go up or down, we usually only learn the reason when it is too late.
16. Trades that make a lot of intellectual sense are likely to be losers.
17. You do not have to be right more than you are wrong to make money in the market.
18. Don’t worry about the trades that you miss, there will always be another.
19. Fear is more powerful than greed and so down trends are sharper than up trends.
20. Analyze the people, not the stock.
21. Trading is a dictators game; you can not trade by committee.
22. The best traders are the ones who do not care about the money.
23. Do not think you are smarter than the market, you are not.
24. For most traders, profits are short term loans from the market.
25. The stock market can not be predicted, we can only play the probabilities.
26. The farther price is from a linear trend, the more likely it is to correct.
27. Learn from your losses, you paid for them.
28. The market is cruel, it gives the test first and the lesson afterward.
29. Trading is simple but it is not easy.
30. The easiest time to make money is when there is a trend.
W. Edwards Deming: 14 Points for Management
“Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.” -W. Edwards Deming
Dr. Deming’s Ideas Dr. Deming’s famous 14 Points, originally presented in Out of the Crisis, serve as management guidelines. The points cultivate a fertile soil in which a more efficient workplace, higher profits, and increased productivity may grow.
Create and communicate to all employees a statement of the aims and purposes of the company.
Adapt to the new philosophy of the day; industries and economics are always changing.
Build quality into a product throughout production.
End the practice of awarding business on the basis of price tag alone; instead, try a long-term relationship based on established loyalty and trust.
Work to constantly improve quality and productivity.
Institute on-the-job training.
Teach and institute leadership to improve all job functions.
Drive out fear; create trust.
Strive to reduce intradepartmental conflicts.
Eliminate exhortations for the work force; instead, focus on the system and morale.
(a) Eliminate work standard quotas for production. Substitute leadership methods for improvement.
(b) Eliminate MBO. Avoid numerical goals. Alternatively, learn the capabilities of processes, and how to improve them.Remove barriers that rob people of pride of workmanship
Educate with self-improvement programs.
Include everyone in the company to accomplish the transformation.
Life and Markets
Respect is the first casualty in lost love.
Four industries dominate the economy: hope, escape, protection, and convenience.
Success is the point at which talent and skill meet opportunity.
The aim of all trading education: to encourage trading.
The printing press democratized the acquisition of knowledge; the computer has democratized its dissemination.
Date markets before deciding to marry them.
Anatomy of a bad trade: Hope, then despair.
Love, once present, never dies. It must be killed. (more…)
Learn to be Disloyal
Loyalty many be a virtue in family ,friends ,and pets ,but it is a fatal flaw for a trader.Never have loyalty to a position.The novice trader will have lots of loyalty to his original position.He will ignore signs that he is on the wrong side of the market ,riding his trade into a large loss while hoping for best.The more experience trader ,having learned the importance of money management will exit quickly once it is apparent he has made a bad trade.However ,the truly skilled trader will be able to do a 180- degree turn ,reversing his position at a loss if market behaviour points to such a course of action.
30 Rules for Traders
- Buying a weak stock is like betting on a slow horse. It is retarded.
- Stocks are only cheap if they are going higher after you buy them.
- Never trust a person more than the market. People lie, the market does not.
- Controlling losers is a must; let your winners run out of control.
- Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
- Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
- Emotional traders want to give the disciplined their money.
- Trends have counter trends to shake the weak hands out of the market.
- The market is usually efficient and can not be beat. Exploit inefficiencies.
- To beat the market, you must have an edge. (more…)
Trading Rules to become Great Trader
Time for another list of Trading Rules . Make it a habit to reread these trading rules every now and then.
1. Buying a weak stock is like betting on a slow horse. It is retarded.
2. Stocks are only cheap if they are going higher after you buy them.
3. Never trust a person more than the market. People lie, the market does not.
4. Controlling losers is a must; let your winners run out of control.
5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
7. Emotional traders want to give the disciplined their money.
8. Trends have counter trends to shake the weak hands out of the market. (more…)
Solution focused approach
What did we do differently on those successful occasions?
* I have planned the trade well in advance with research; it is not a spontaneous trade, so I’ve had time to think clearly about what I want to do.
* I have a clear profit target in mind based on research and refuse to waver from that target unless the market takes me out with a predefined stop. I consider myself a person of integrity, so I tell myself that I have to show integrity and loyalty to my trade idea and target;
* I don’t follow the position tick for tick. Either the trade will hit my target or it will hit my stop. I make a conscious effort to let go and not micromanage the trade;
* I keep myself calm and clearly focused by purposely getting up from my chair, doing some stretches, breathing deeply, and getting away from the screen. I keep myself in a state that is incompatible with anxiety;
* I rehearse constructive self-talk during the trade. I tell myself that I’ve done my preparation and established my edge. Any individual trade can go against me, but if I take all the good trades I can, eventually I’ll benefit from good odds and a good risk-reward ratio. If I lose money on the trade, I’ll figure out why and what that might be telling me about the current market. (more…)
What is important in trading
Trade with your personality
Regardless of what has been working for other people, you have to trade a system that suits your personality. It either has to compliment your strengths, overcome your weaknesses or both. That is not to say that a system that someone else creates cannot work for you, but you have to figure our your own unique way of trading it.
You have to have an edge
You have to have a specific, definable edge over the market. Like with any other endeavor, if you are not skilled, you will not do well. The best traders understand the edge that they have over the markets and constantly exploit it for profit.
Work hard, work smart
All of the top traders worked hard to refine their technique and constantly improve themselves in order to become better traders. It is not only about putting in a lot of hours, it is also about being open to ways of improving that may seem foreign or strange at the beginning.
No loyalty to a position
Top traders know how to cut losses short and take profits when the target is hit. They don’t get too excited about a position and make a business decision to take the profit or take the loss, based on the parameters of their system.