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Archives of “patience” tag
rss100 TRADING TIPS
1)Nobody is bigger than the market.
2)The challenge is not to be the market, but to read the market. Riding the wave is much more rewarding than being hit by it.
3)Trade with the trends, rather than trying to pick tops and bottoms.
4)There are at least three types of markets: up trending, range bound, and down. Have different trading strategies for each.
5)In uptrends, buy the dips ;in downtrends, sell bounces.
6)In a Bull market, never sell a dull market, in Bear market, never buy a dull market.
7)Up market and down market patterns are ALWAYS present, merely one is more dominant. In an up market, for example, it is very easy to take sell signal after sell signal, only to be stopped out time and again. Select trades with the trend.
8)A buy signal that fails is a sell signal. A sell signal that fails is a buy signal.
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Trading Wisdom – Gary Bielfeldt
The most important thing is to have a method for staying with your winners and getting rid of your losers. By having thought out your objective and having a strategy for getting out in case the market trend changes, you greatly increase the potential for staying in your winning positions. The traits of a successful trader: The most important is discipline – I am sure everyone says that. Second, you have to have patience; if you have a good trade on, you have to be able to stay with it. Third, you need courage to go into the market, and courage comes from adequate capitalization. Fourth, you must have a willingness to lose; that is also related to adequate capitalization. Fifth, you need a strong desire to win. You have to have the attitude that if a trade loses, you can handle it without any problem and come back to do the next trade. You can’t let a losing trade get to you emotionally. If a trade doesn’t look right, I get out and take a small loss.
Successful traders are committed
ACCEPTANCE OF OFTENTIMES ILLOGICAL MARKET BEHAVIOR
DISCIPLINE IN THE FACE OF UNCERTAINTY
PATIENCE WHEN LITTLE IS TO BE ACCOMPLISHED OTHERWISE
FOCUS ON THE RIGHT NOW INSTEAD OF WHAT MIGHT BE
PERSONAL RESPONSIBILITY FOR EVERY ACTION AND REACTION
PASSION WHEN ALL ELSE FAILS
MAKING MONEY WHEN WRONG
Trading Quotes from Trading Books
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”
Comparing Paper Trading vs. Real Trading
“Are you a good shot?” “I can snap the stem of a wine glass at twenty paces” “That’s all well, but can you snap the stem of a wine glass while the wine glass is pointing a loaded pistol straight at your heart?”
“A man must believe in himself and his judgement if he expects to make a living at this game. That is why I don’t believe in tips. If I buy stocks on Smith’s tip, I must sell those stocks on Smith’s tip. I am depending on him”
“Speculation is a hard and trying business, and a speculator must be on the job all the time or he’ll soon have no job to be on”
“The more I made, the more I spent. This is the usual experience with most men. No, not necessarily with easy-money pickers, but with every human being who is not a slave of the hoarding instinct. Some men, like old Russell Sage, have the money-making and the money-hoarding instinct equally well developed, and of course they die disgustingly rich”
“If a stock doesn’t act right, don’t touch it; because being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit”
“The big money was not in the individual fluctuations but in the main movements-that is, not in reading the tape but in sizing up the entire market and its trend” (more…)
Money solves all of your problems.
It is often said, trading introduces you to yourself. I was in my second year of trading when I heard that phrase. She would go on to ultimately teach me much about life and myself. The benefit of being in my early 20′s and teaching people in their 40′s and 50′s. I helped them with trading, they helped me grow up.
What that phrase means is that who ever you are that day will show up in your trading. This of course comes in varying degrees.
In many professions your emotional state may not effect your earnings or employment. In trading, a “bad” day can create a cascading effect. You lost when you should have made money. You created a bad habit. Losing doesn’t trigger the right response, etc.
A trader views the market through themselves. Now, most of the time it is little things that can be easily passed over. Human beings are always going to have to deal with things they rather would not have to. Every person has a bad day. (more…)
Lack of Patience
The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction.
That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you’re a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.
All too often, because trading is inherently exciting (and anything involving money usually is exciting), it’s easy to feel like you’re missing the party if you don’t trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade.
How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don’t worry about missing an opportunity today, because there will be another one tomorrow, next week and next month…I promise.
I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: “Aim small, miss small.” I offer the same advice in this new context. To aim small requires patience. So be patient, and you’ll miss small.
7 More Trading Lessons for Traders
- You don’t choose the stock market; it chooses you. A little bit of early trading success can have a profound effect on a person’s soul. If it does choose you, you’ll have to accept that your life and investing will become forever connected.
- Your methodology must provide an unshakeable foundation that you believe in totally, and you must have the conviction to trade based upon it. If your belief is tentative or if you don’t have complete faith in your methodology, then a few bad trades will destabilize and erode your confidence.
- A calm mindset that can focus on the execution and not on the outcome is what produces profits. It takes total emotional control. You must maintain your balance, rhythm and patience. You need all three to stay in the game.
- The markets are always conniving with ingenious techniques to get you to lose your patience, to get you frustrated or mad, to bait you to do the wrong thing when you know you shouldn’t. A champion doesn’t allow the markets to get under his skin and take him out of his game.
- Like a great painting, all good trades start with a blank canvas. Winning traders first paint the trade in their mind’s eye so that their emotional selves can reproduce it accurately with clarity and consistency, void of emotions as they play it out in the markets.
- The “here and now” is all that matters. You can’t think about the last trade or the last shot or worry about the future. You need to put on your “amnesia hat” in order to remain completely unfazed by what came before. Only by doing so can you be totally absorbed in executing your present trade.
- Being prepared and having put in the work results in the bringing together of your intuition and confidence. The two go hand in hand. Extraordinary results can be expected when you are able to see it, feel it and trust it.
Trading Errors
1. Trying to catch a falling knife. 2. Picking Tops 3. Failure to wait for confirmation. 4. Lack of patience. 5. Lack of a clear strategy. 6. Failure to assume responsibility. 7. Failure to quantify risk. |
Lessons Learned
“So far in 2009, what are the the most important thing I had learned about investing, trading, and/or the markets?”
Success takes longer than expected
- That you must learn to trade and trust yourself and not to become so dependent on the opinions of others, which ultimately keeps you from becoming the best you can be
- Keep it simple
- The very best profit opportunities occur in the midst of extreme emotional sentiment
- Always think opportunistic verses too bullish or bearish
- Persistence and dedication to a daily routine is key
- Developing an edge is the first step for trading successfully. Without that, disciplined trading will only make sure you gradually losing money
- The market is one unforgiving bitch!
- It is challenging to find non-correlated markets
- You have to respect the market even if you think it is under some kind of manipulation
- Keep your eyes open and powder dry
- If you fall in love with a stock keep 100 shares and let the rest go
- I’ve learned to be patient in waiting for my patterns to appear
- The value of ETFs
- The importance of finding special situations that will be profitable no matter what the market does
- Stay away from light volume when the only thing trading is the black boxes
- The importance of focusing only on one technical setup in order to improve one’s skill set
- I now think that buy and hold is a serious mistake
- Think big and think long term
- Don’t try to predict the markets
- Don’t be afraid in bear markets, just another opportunity
- The odds are stacked against the retail investor
- There’s no such thing as a sure thing
- The harder I work at it the more likely I am to succeed
- Conserving one’s capital is vital
- I know the rules – I just need to notch-up my discipline
- Smaller entry positions can be helpful
- Opportunities are everywhere
- The market is primarily psychologically driven
- Trade with the trend instead of trying to pick tops and bottoms
- Know where and when to get out before you get in
- As Johny Cash put it “You got to walk that lonesome valley, you got walk it by yourself. Nobody else can walk it for you. You got to walk it by yourself.”
- The difficulty of avoiding over-optimization/curve fitting
- Overtrading can be, and often is, a recipe for disaster
- To breathe before executing a trade
- Trading is not a profession for pessimists
- Never feel confident even when winning. Humility is a good thing
- You need to be quick and brutal with the trading decisions
- It is okay to sit out a potential move – risk management over reward chasing
- Don’t bet the farm in either direction
- There is no consistent logic to trading the market
- Some trades need to be taken when they appear, not just when you are ready
- There’s no rule that quality stocks must go up
- Don’t chase any overbought stocks
- When a sector (like financials) look so hopeless as it did in March there is potential to make a lot of money if things turn around even just a little
- Hope is a four-letter word and has no place in a trading strategy
- Patience. It is ok to sit out once in awhile
- Wait until you have an proven strategy supported by data before trading for keeps
Anything can happen. Trading is all about probabilities
Technically Yours-ANIRUDH SETHI ,BARODA ,INDIA
