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The trading lessons are simple—but not so easy

Trading Lesson1. Be with the trade you are in at the moment.  Stop trying to control anything but your own trade.  The markets are going to do exactly what they want to and when they want to. YOU have the power to control what YOU feel, think, believe and do.

2.  All that matters for you is the trade you are in.  You may never see that trade again.  Savor it, cherish it and be with it for as long as it lasts.

3. Celebrate your victories with yourself.  Celebrate the trade and with the trade.  The instruction is to refrain from boasting or grandiose behavior when you make a winning trade.  The markets will humble you, and pride always comes before a fall. Napoleon said that the most dangerous moments come with victory. Decry and avoid hubris.

Also celebrate your defeats with yourself and the trade because they are mistakes.  Mistakes are our greatest teachers because it is through them that we learn. What do we learn?  Not to make them again!

Constantly strive to look inward, to know yourself, to raise yourself to the highest level of authenticity.  Be rigorously honest about who you are.

Taking personal responsibility for your thoughts, feelings and actions is the first step to true inner peace—both in trading and in life.  Never forget the ten most important words you can ever and always ask yourself:

Am I doing the best I can do right now?

The ultimate victory in competition is derived from the inner satisfaction of knowing that you have done your best and that you have gotten the most out of what you had to give…

Traders needs Patience , Decisiveness & Gratitude

1. Patience
 
“The waiting is the hardest part” – Tom Petty
 
“Patience pays. Wait. Let the hand of God work for you. One who has created you let Him create all the environments, circumstances, and facilities & faculties” – Yogi bhajan
 
I don’t know about you but I trade to put food on the table for my family. In the long run if f I don’t make money – we don’t eat. A lot of trading is waiting. Waiting for the best trade to come to you, waiting for your scales to be hit, waiting for final target to be hit, etc. If you are impatient you lack the ability to wait for these things. If you are trading for excitement or thrills then you will find yourself taking stupid trades out of a need for action and in return you will not experience the results you desire. Much better to head to Vegas or go bungee jumping. Before I put ONE DOLLAR at risk I want to be sure that the odds are stacked in my favor. You won’t find me trading out of boredom, or taking a low odds trade because I feel the need to do “something”. I am fine being flat. You should learn to love the waiting – the waiting is what enables you to make the money.
 
2. Decisiveness.
 
“It’s better to be boldly decisive and risk being wrong than to agonize at length and be right too late” – Anonymous
 
“Procrastination in the name of reducing risk actually increases risk” – Colin Powell
 
“Take time to deliberate, but when the time for action has arrived, stop thinking and go in” – Napoleon Bonaparte
 
“In any moment of decision, the best thing you can do is the right thing, the next best thing you can do is the wrong thing, and the worst thing you can do is nothing” – Theodore Roosevelt (more…)

Learn From Napoleon's Mistakes

Napoleon was unquestionably a great strategist and imposing historical figure. His leadership style had many flaws, which eventually led to his downfall.

In the vein of learning from others mistakes, here are five lessons today’s leaders can pull from Napoleon:

1. Never stop innovating.
Napoleon introduced many tactical innovations to warfare and statecraft. He believed in lightning military attacks when most European generals were slow, incompetent or incapable of making on-the-ground decisions without higher orders. He struck fear in the hearts of his opponents by bombarding them with canon and grapeshot believing, correctly, that loud noises shook the nerve of his opponents. And he was one of the first leaders to wield propaganda to bolster his position at home and abroad.

But Napoleon never improved on his basic innovations. He never cared to learn about naval weapons, steam power, observation balloons, railroads, bridging materials, troop ships and general advances in canon ammunition. Napoleon never bothered to think about France’s large land holding in America. He feared crossing the Atlantic and instead of finding a use for the vast territory, he sold it.

Paul Johnson in his biography of Napoleon, writes, “He thought the improvements introduced in his youth were quite enough, and though he fiddled with the standard equipment, he never changed it substantially.”

Napoleon’s failure to adapt eventually hurt his military and political campaigns in the long run. By failing to build a navy and look to alternative innovations and business deals he lost his ability to outmaneuver his opponents and with it his edge.

Lesson for leaders: Old tricks may work over and over again, but never overlook new technologies. Overtime they will become crucial.

2. Learn to delegate.
Napoleon’s subordinates could pull off miracles, but only when under strict, careful instruction. Those high in Napoleon’s favor were those who obeyed orders precisely. Promotions weren’t given to those who had independent ideas. The result: when Napoleon’s generals had to think on their own or perform without Napoleon’s instruction, they were often nervous, fumbling and counterproductive.

Lesson for leaders: Leaders shouldn’t simply promote those who can follow orders. Empower employees to think for themselves and they’ll do better under pressure, even without orders.

3. Have a little patience. 
There are many battles Napoleon could have won if he had been more patient. He might have also attained more power if he had grown more organically, rather than rushing, impulsively into Spain and Russia.

“Bonaparte lacked the temperament to fight a defensive battle, let alone a defensive campaign,” writes Johnson. “Had he been able to do so, he might well have fought the Sixth Coalition to a peace of exhaustion, without a single one of its soldiers setting foot on French soil proper.”

Lesson for leaders: Focusing all your energy on forward movement might seem like the right thing to do, especially if it’s what has led to your success before. However, every leader needs to be expert in controlling active periods as well as calm ones.

4. Take training seriously.
Napoleon selected 50,000 men to serve in his elite, Old Guard. They were tall, strong, standout soldiers who wore menacing bearskin uniforms. During battle they would sit behind the main forces and their presence would give the regular troops confidence.

However, Napoleon rarely had to call on the Old Guard’s services since he usually won battles quickly and with skill.

But his success would eventually backfire. When Napoleon finally needed to call on the Old Guard during the battle of Waterloo they were weak, unused to fighting and underprepared.

Lesson for leaders: Don’t set aside high-potential employees and keep them above the fray. Leaders need to ensure their teams are well trained in all tasks and don’t lose their relevance.

5. Don’t lose your temper.
Napoleon had a bad temper. Sometimes he’d fly off the handle over small matters and sometimes he’d plan a fit hoping that his dramatics would inspire his subordinates to action. He used his loud outbursts to inspire fear and respect in the ranks, but they rarely won him points in diplomatic circles.

When Napoleon met with the British ambassador Lord Whitworth, he threw a fit then stalked out of the room so quickly that the doormen hadn’t time to open the doors. Napoleon had to wait, seething, until the doors were opened. Such hysterics made Napoleon look uncertain, weak and hotheaded.

Lesson for leaders: Control your temper. Outbursts have very limited mileage and, more often than not, make you look foolish.

Inspiration

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“What the mind of man can Conceive and Believe, it can Achieve.” – Napoleon Hill

 “You become what you think about all day long” – Ralph Waldo Emerson

“You are today where your thoughts have brought you, you will be tomorrow where your thoughts take you.” – James Allen

“Do not think of knocking out another person’s brains because he differs in opinion from you. It would be as rational to knock yourself on the head because you differ from yourself 10 years ago.” – Horace Mann, educator – How many traders feel this way? 

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“You can have anything you want. There are no limits to your possibilities.” – unknown
“Whether you believe you can do a thing or not, you are right.” – Henry Ford (more…)

Quotes for Traders

Planning, Discipline & Patience.
  • ‘Predicting rain does n’t count; building arks does’: Warren Buffett’s Noah Rule.
  • “To know and not to do, is not yet to know” – Courtesy of Tom Witters.
  • ‘It’s easy to have faith in yourself and have discipline when you’re a winner, when you’re number one. What you got to have is faith and discipline when you’re not a winner.’ – Vince Lombardi
  • ‘After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!’ – Jesse Livermore

Fear

  • ‘Never let fear of striking out, get in your way’: Babe Ruth.

Perspectives

  • ‘It’s tough to make predictions, especially about the future,’ – Lawrence Peter ‘Yoggi’ Berra.
  • “go as far as you can see, and when you get there , you will see further.” –
  • anonymous
  • ‘Don’t worry what others think… They don’t do it very often’ – Courtesy of Mark Carstens.
  • “A little learning is a dangerous thing, but we must take that risk because a little is as much as our biggest heads can hold.” – George Bernard Shaw.
  • “Those who cannot remember the past are condemned to repeat it” – George Santayana.
  • “Glory is fleeting but obscurity is eternal” – Napoleon
  • ‘A long term investment is when I break even.’ – Courtesy of David Wong.
  • “There are many truths, but only one reality” – Courtesy of Robin Farrell.
  • ‘It’s not whether you get knocked down, it’s whether you get up.’ – Vince Lombardi.
  • ‘We would accomplish many more things if we did not think of them as impossible.’ – Vince Lombardi
  • “Vision – It reaches beyond the thing that is, into the conception of what can be. Imagination gives you the picture. Vision gives you the impulse to make the picture your own.” – Robert Collier.
  • “If you’re 30 minutes into the game and you don’t know who the patsy is, you’re the patsy.” – Courtesy of Saranjot Dosanjh.
  • ‘Price is observable and objective while value is perceived and subjective’. – John Murphy.
  • ‘In theory, there is no difference between theory and practice. In practice there is.’ – Yogi Berra.
  • “As a rule, Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works…. The Failure of great banks… and mercantile firms…are the symptoms incident to the disease, not the disease itself.” – John Stuart Mill (1867).
  • ‘You need three bear markets to know what to do. The first nearly wipes you out, the second you learn how to survive and the third you take by the scruff of the neck and enjoy it.’ – Crispin Odey of Odey Asset Management.
  • “Never in recorded history, has the supply of capital not overwhelmed the supply of opportunity.” – Joseph Lassiter .
  • ‘You only live once but if you work it right, once is enough’. – Joe E. Lewis.
  • “If you really know whats going on, you don’t even have to know whats going on to know whats going on… You can ignore the headlines because you anticipated them months ago” – Michael Steinhardt.
  • ‘Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.’ – Jesse Livermore.
  • “Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.” – Soros.

On Losses (and Profits). 

  • ‘Tradings only real secret is… The best loser is the long-term winner’ – Phantom
  • “Trading is a losing game, the best loser is the long-term winner” – Anonymous.
  • ‘Losses can either be lost money, or tuition in the school of trading’ – Courtesy of Mark Moskowitz.
  • ‘The worst advice I use to get was. – ‘No one went broke taking a profit’’. – Courtesy of John Berra.
  • “It seems that the necessary thing to do is not to fear mistakes, to plunge in, to do the best that one can, hoping to learn enough from blunders to correct them eventually.” – Abraham Maslow
  • ‘“Learn to like your losses”. Why? Because they are small!’ – Courtesy of Stuart A.Brown.
  • “One common adage…that is completely wrongheaded is: You can’t go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits.” – William Eckhardt.
  • “Its not about being right or wrong, rather, its about how much money you make when you’re right and how much you don’t lose when you’re wrong.” – George Soros.
  • “The first loss is the best loss.” – Jim Rogers.
  • “Losers average Losers”…Paul Tudor Jones.
  • “You learn nothing from your winners and everything from your losers.” – Courtesy of Jeff Horn.
  • ·“To become a Master Trader, you must first be a successful loser.” – Jeff Horn.

Ego

  • “Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.” – Paul Tudor Jones

Personal Responsibility and Self-awarenss (more…)

Trading lessons are simple—but not so easy

1. Be with the trade you are in at the moment.  Stop trying to control anything but your own trade.  The markets are going to do exactly what they want to and when they want to. YOU have the power to control what YOU feel, think, believe and do.

2.  All that matters for you is the trade you are in.  You may never see that trade again.  Savor it, cherish it and be with it for as long as it lasts.

3. Celebrate your victories with yourself.  Celebrate the trade and with the trade.  The instruction is to refrain from boasting or grandiose behavior when you make a winning trade.  The markets will humble you, and pride always comes before a fall. Napoleon said that the most dangerous moments come with victory. Decry and avoid hubris.

Also celebrate your defeats with yourself and the trade because they are mistakes.  Mistakes are our greatest teachers because it is through them that we learn. What do we learn?  Not to make them again!

Constantly strive to look inward, to know yourself, to raise yourself to the highest level of authenticity.  Be rigorously honest about who you are.

The Wisdom of Andrew Carnegie as told to Napoleon Hill

I find this book to have a long and weird title. This book records the interview that Napoleon Hill did with Andrew Carnegie, which talks about the 17 success principles. Let me share with you the striking philosophy that I picked up from the book. To make sure no meaning is lost, I shall quote Andrew Carnegie’s words in verbatim.

The importance of knowing your purpose in life, and how it translates to tangible benefits,

“Definiteness of Purpose involving a hundred dollars, for example, might be translated into its financial equivalent in a few days, or even a few hours, or a few minutes, whereas, desire for a million dollars might call for considerably more time, depending to some extent on what one has to give in return for the million dollars… The best way I can think of to describe the time necessary for the translation of a definite purpose into its physical or financial equivalent, can be accurately stated by determining the exact time necessary to deliver the service, or the equivalent in value one intends to give in return for the object of that purpose.”

Wealth is a process of providing valuable service to others,

“riches and material things that men get are the effect of some form of useful services they rendered. My fortune did not come to me until I had delivered to others definite values in the form of large quantities of well-made steel.”

Money has no use when in possession, money need to be used constructively,

“…men seldom profit by money except that which they earn… The good there is in money consists of the use to which it is put, and not in the mere possession of it. Generally speaking, the man who earns his own money, acquires, along with it, some of the necessary wisdom as to its constructive use.”

Embrace responsibilities and work,

“Of the thousands of men who work for me, I hazard the guess that not more than a score of them would be willing to assume my responsibilities and work the hours I work, if I gave them all the money I possess for doing so. A few of the men who work for me have been willing to assume such responsibilities, and it is significant that every one of these is as rich as he desires to be.” (more…)

Self-Discipline in Trading

Having self-discipline is having the ability to follow through on your plans and goals.  Often times we get tugged in various directions and enticed by making choices that don’t help us along our path to our goals and fulfillment.

“The path of least resistance is what makes all rivers and some men crooked.”
                                                                                                                               – Napoleon Hill

Self-discipline is the ability to make the conscious choice (ultimately it becomes a habit) of doing the thing that will move you towards your goal – and sometimes it’s the hard or unnatural or unpopular thing to do.  It’s foregoing instant gratification for the longer term objective.  Typically, however, people operate on autopilot and this is dangerous when you have not yet developed the right ‘habits’ for success.

In the trading game, you must have self-discipline. You must look at the entire forest and not focus on one tree.  If you get too caught up in each and every trade, you will lose sight of the larger goal.

The key is to care a lot about your overall trading progress, but not care too much about any individual trade.

Your Identity also plays a huge role in this because if you see yourself as someone who lacks self-discipline, then all the will power in the world will not overpower this.  You are someone, in your mind, who lacks self-discipline.

So the key components to have self-discipline in Trading are: (more…)

Decisiveness

“It’s better to be boldly decisive and risk being wrong than to agonize at length and be right too late” – Anonymous

“Procrastination in the name of reducing risk actually increases risk” – Colin Powell

“Take time to deliberate, but when the time for action has arrived, stop thinking and go in” – Napoleon Bonaparte

“In any moment of decision, the best thing you can do is the right thing, the next best thing you can do is the wrong thing, and the worst thing you can do is nothing” – Theodore Roosevelt

If you have the patience to wait for your setup then you better have the decisiveness to GET IN THE TRADE once price comes to you and your entry parameters are present. How many people wait for the trade to come and then when it arrives start analyzing if they should take it? When the trade has arrived it is time for action, not analyzation. This is what preparation is for. If you have done your homework there is no need for hesitation – you already know what to do. At the same time trading is not static. There are times when the odds are high that the market will reverse before your final target is hit. Do you have the decisiveness to reverse the position or flatten when this situation is present? It has been said that the number one ingredient to being a great trader is the trading guts to pull the trigger as soon as a reverse is anticipated. Be decisive.