Archives of “mediocre results” tag

rss

Losers Average Losers

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

There are so many concepts about the stock market that are taught in the classrooms, promoted throughout the media, and passed along from generation to generation but, unfortunately, most of them are FLAT OUT WRONG!

I decided to write a 5-part series (this is part 2 of 5) on the common misconceptions that really need to stop being promoted. Keep in mind, these are all my humble opinions, but after 16 years of trading and studying market history, one really begins to notice what works and what doesn’t.

Common Misconception #2 – Dollar Cost Averaging

Paul Tudor Jones is one of the greatest traders in market history. Why? Because he’s consistently profitable. The best “anything” in the world are the best because they perform at a consistent, superior level for long periods of time. Michael Jordan isn’t considered the best basketball player ever because he scored 30 points ONCE in a game. It’s because he averaged 30 points per game over his ENTIRE career. (more…)

Book Review : All About Market Timing, 2d ed.

  
Analysis, Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

“If you were in a leaking boat,” Leslie N. Masonson writes, “you’d have three choices: 1. Stay in the boat and stop the leak = Go short. 2. Get out of the boat = Switch to cash. 3. Go down with the ship = Buy-and-hold.” (p. 60) In this second edition of All About Market Timing: The Easy Way to Get Started (McGraw-Hill, 2011) Masonson explains why market timing is superior to buy-and-hold and describes some timing strategies that have been profitable in the past.

Most people, I assume, would prefer market timing to buy-and-hold—if it really were a viable strategy. The main argument against timing is that it can’t be done. The investor will end up being out of the market on the best days, in on the worst days, and poorer for his efforts. Better just sit there, say the critics, take your lumps in bear markets, and trust that the market will eventually power ahead, taking you along with it. Unfortunately the market can be very slow to recuperate from downdrafts, as the author documents in several tables.

Masonson presents five familiar market timing strategies: the best six months, presidential cycles combined with seasonality, simple moving averages, the Value Line 3 and 4 percent, and the Nasdaq Composite 6 percent. These strategies are best pursued using ETFs rather than individual stocks or mutual funds. (more…)

Trading Quotes that Will Change Your Trading

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

“If you lack a solid trading plan and are stressed out when you trade, you’ll naturally tend to cut your profits short and hold on to losers.” – Van K Tharp
“Without a proper mental approach to trading, someone trading a “Holy Grail” system could produce mediocre results or even large losses.” – Van K Tharp
“A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business” – Van K Tharp
“Trade with an edge, manage risk, be consistent, and keep it simple. The basis of all successful trading can be summed up in these four core principles.” – Curtis Faith
“When you really believe that trading is simply a probability game, concepts like ‘right’ and ‘wrong’ or ‘win’ and ‘lose’ no longer have the same significance. As a result, your expectations will be in harmony with the possibilities.” – Mark Douglas, trader & author
“Wharton taught you that 40 percent of a stock’s price movement was due to the market, 30 percent to the sector, and only 30 percent to the stock itself, which is something that I believe is true. I don’t know if the percentages are exactly correct, but conceptually the idea makes sense.” – Steve Cohen, hedge fund manager

 

“Traders fail for the same reason that most baby turtles fail to reach maturity: Many are called and few are chosen. Society works by the attraction of the many. As they are culled out, the good ones are left, and the others are released to go try something else until they find their calling. The same is true for other fields of pursuit.” – Ed Seykota

 

“Charting is a little like surfing. You don’t have to know a lot about the physics of the tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when it’s happening and then have the drive to act at the right time.” – Ed Seykota

 

“Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.” – Ed Seykota, trader

 

“The markets are the same now as they were five or ten years ago because they keep changing-just like they did then.” – Ed Seykota (more…)

Go to top