Just like you shouldn’t practice your basic martial-arts forms in the ring where your mind is more focused on pain avoidance then executing the tactic correctly, a novice shouldn’t begin trading with real money and real consequences. Only once you’ve amassed significant practice in a safe environment where you can conduct your technical and fundamental analysis without being emotionally distracted should you begin to trade with real money. And when you finally start, don’t jump straight into the ring with Bruce Lee. Begin tentatively, gradually, slowly increasing your trading exposure over time as you become accustomed to the increasing levels of risk. How do you know you’ve moved too far, too fast? If you are finding it’s becoming harder to sleep at night, either because you are worrying about your trades or you are excited about your gains, then you have moved into the realm where your emotions are going to have too strong an effect. You are going to start making poor, emotionally-clouded decisions and so it is time to scale back.
Archives of “martial arts” tag
rssSelflessness
The markets are nothing more than a reflection of cumulative sum of human reactions to financial data inflow. As a trader, you are part of it, and millions like you create that entity that appears to be moving so intelligently in all time frames.
So how it is possible that you and millions like you can create the greatest illusionist, the market, and ironically fight against it in every moment of your trading life.
In other words, the market becomes the ultimate enemy of yours and you fight it all the time? As an unit reflection of the market’s image, can you defeat yourself?
Your fight can only be as good as your best, but you create your enemy with your best as well.
That is why this is an endless game because no one can win it all the time as no one can keep beating himself all the time… UNLESS YOU ARE A SELFLESS PERSON. (more…)
A Martial Arts And Strength Training Rant That Relates To Trading
I feel the need for a rant you lucky people. It comes out of my ‘strange’ experience of being a martial artist and trader. So here you are….
I read a strength training forum and over the last few months the same guy has kept saying: “I’m a martial artist would this be a good program for a martial artist”.
Every time he is told perhaps and then asked what he is hoping to achieve. People then spend time guiding him on a program.
Then a few weeks go by and he pops up in a new thread where there is a new interesting program with the question: “I’m a martial artist would this be a good program for a martial artist”.
In the meantime others pursuing athletic or martial advancement have reaped the rewards of following their programs.
The key point. Pick something and train it hard. Don’t debate it, change it, mess with it until you have trained the shit out of it. You haven’t earned the right. (more…)
Technical Analysis Fact and Fiction
“Technical analysis, I think, has a great deal that is right and a great deal that is mumbo jumbo…
“There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders may say about the future activity of other traders.
“For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is — whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge. (more…)
Technical Analysis Fact and Fiction
“Technical analysis, I think, has a great deal that is right and a great deal that is mumbo jumbo…
“There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders may say about the future activity of other traders.
“For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is — whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge.
“Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behaviors. By definition, anything that creates a new chart pattern is something unusual. It is very important for me to study the details of price action to see if I can observe something about how everybody is voting. Studying the charts is absolutely crucial and alerts me to existing disequilibria and potential changes.”
– Bruce Kovner, Market Wizards (more…)
On Flexibility
#1 Rule of Investing: Be Flexible – Roy Nueberger
Never adopt permanently any type of asset or any selection method. Try to stay flexible, open-minded, and skeptical. – John Templeton
Pliability: Consider and reconsider the facts, and your opinions. Stubbornness as to opinions-“cockiness”-must be entirely eliminated. – Bernard Baruch
Ignore mechanical formulas – Phil Carret
If there is anything I detest, it’s a mechanistic formula for anything. People should use their heads and go by logic and reason, not by hard and fast rules. – Gerald Loeb
Empty your mind, be formless, shapeless–like water. Now you put water into a cup, it becomes the cup, You put water into a bottle, it becomes the bottle, You put it in a teapot, it becomes the teapot. Now water can flow or it can crash! Be water my friend. – Bruce Lee. Ok, this quote comes from the world of martial arts, but the lesson transcends mere combat.