Archives of “methodology” tag

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STOCK MARKET RULES: THERE ARE ONLY TWO!

  
  Education
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 two-number

The stock market has only two rules, both of which are vague and confusing. It is up to you to make them clear and simple to understand.

 Here are the guidelines:You must write these rules down so that you will not forget them.

You must always follow these rules.

These rules will never change.

You must keep them forever.

These rules are never to be broken.

You must never add to these rules.

 Here are the rules: 

KNOW WHEN AND WHY TO BUY.

KNOW WHEN AND WHY TO SELL.

 Now, take these rules and develop your trading methodology around them.

STOCK MARKET RULES: THERE ARE ONLY TWO!

  
  Education
#  #  #  #  #  #  #

The stock market has only two rules, both of which are vague and confusing. It is up to you to make them clear and simple to understand.
 Here are the guidelines:
You must write these rules down so that you will not forget them.
You must always follow these rules.
These rules will never change.
You must keep them forever.
These rules are never to be broken.
You must never add to these rules.
 Here are the rules:
 KNOW WHEN AND WHY TO BUY.
KNOW WHEN AND WHY TO SELL.
 Now, take these rules and develop your trading methodology around them.  (more…)

The Market is Not Flexible, But You Are

  
  Education
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In trading, and in anything in life, we need to be focus and committed to achieving excellence in what ever we do. However, you need to remember that there will always be more than one way to reach a destination. Yes, let me repeat, there will always be more than one way to achieving a goal.

Stay committed to your decisions but stay flexible in your approach.

If you believe what I say, and you should at least try to, then you’ll realise that the methodology that you’ve learnt about trading is the only thing you know at the moment. And, unfortunately for many, you don’t know what you don’t know.

To overcome that, you need to be hungry and curious about learning new markets and new trading systems all the time – continuous development. Nonetheless, you’ll also need to be discipline and structured about how you learn them. The last thing you want to do is to be jumping around trading everything that moves in the market place. Do you get my point?

Once you become a flexible trader, you can trade anything you want and make as much money (from the market) as you like. Right?

Now, the key question. If the market has no influence on you (as to how you make money), how can it have any influence on you now?

‘Alexander Elder Quotes’

  
  Education
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Trading is not all about just stock picking, it is not just about a winning system. Yes, first you have to understand how to trade and put the odds in your favor of winning, but that is not enough. You must also add in risk management so when you lose ten times in a row your trading career and account does not end there. You also must have  faith in your system and method to be able to keep trading it even when you are losing, and you will have losing months, maybe even a losing year, can you keep going to be around for the big wins?

One dimensional traders just pick stocks, if they are right they win for a while, but eventually they do not stop out when they are wrong and they blow up their account. They also eventually get emotionally frustrated from wild equity swings  and they eventually quit and blame the market.

Two dimensional traders have a good system and cut their losses but have trouble with self confidence and belief in their system. They tend to blame themselves when their accounts draw down 10% to 20% and have trouble understanding that it is just part of the game. The market environment is determining wins and losses not the trader, they don’t  understand this. All they can do is take their entries and exits as they come and let the market do what it does. They have not separated themselves from their trading.

The three dimensional trader takes entries and exits based on his methodology that he believes in, he manages risk per trade carefully and never loses more than 1% t0 2% of his capital on any one trade. The 3D trader’s self worth and confidence is not tied up in any one trade, or monthly performance he understands this is a long term process with ups and downs. Wins and losses do not change his mindset. It is just a business, stocks are just inventory, the market gives and the market takes away, and he just takes what it is giving.

The calm before the storm

  
  Education
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stormMuch like patience, the successful trader exhibits a simple, unexcitable mood in the face of a market that is in a constant state of flux. There is no way you can have emotionless trading. It is impossible unless you turn into a robot. What is possible is to bring your emotions under control. While others panic, cry, throw temper tantrums (and their computer monitors), doubt their trading edge, etc. you remain calm in the knowledge of your simple rules based methodology. You know when to enter battle, you know how long you can stay in battle, how many resources you can commit to battle ($), and when to exit the battlefield.

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