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7 Deadly Sins of Trading

  
  Education
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7 Deadly Sins of TradingPerfectionism: There is no perfection in trading as far as making money on every trade or having a perfect system. All you can hope to be perfect at, is following your system, rules, and trading plan. A winning trade should be measured as one in which you followed all your preset guidelines. Even the best traders only average about a 50%-60% win rate at best over long periods of time. The key is having bigger winners than losers, not being perfect. Like in baseball where a .300 hitter can get into the hall of fame. A .500 trader in the market can become wealthy if his wins outpace his losses.

Fear:  Faith in your system is the only way to overcome your fear of trading. You must complete enoughback testing on your system until you know that you have a valid edge over the market in the long term. You must see opportunity in trading not possible losses. You must take your systems trade signals each time and if you can’t overcome your fear of loss and failure then perhaps trading is not the best profession for you.

Pride:  We are not our trading account and staring at our profit and loss too much is a major detriment in one’s trading. Traders must cut losses at their predetermined stop, not pridefully hang on trying to prove they are right. We must separate ourselves from the trading. A person’s value is not tied to a trade or performance record. If we followed our system then we can’t view that as a personal loss. Our system failed us. (more…)

Perfectionism:

  
  Education
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There is no perfection in trading as far as making money on every trade or having a perfect system. All you can hope to be perfect at, is following your system, rules, and trading plan. A winning trade should be measured as one in which you followed all your preset guidelines. Even the best traders only average about a 50%-60% win rate at best over long periods of time. The key is having bigger winners than losers, not being perfect. Like in baseball where a .300 hitter can get into the hall of fame. A .500 trader in the market can become wealthy if his wins outpace his losses.

Trading Quotes

  
  Education
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  1. “Time is your friend; impulse is your enemy.” John (Jack) Bogle
  2. “When reward is at its pinnacle, risk is near at hand.” John (Jack) Bogle
  3. “Rule no. 1 is never loose money. Rule no. 2 is never forget rule number one.” Warren Buffett
  4. “Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.” Warren Buffett
  5. “I paraphrase Lord Rothschild: The time to buy is when there is blood on the streets.” David Dreman
  6. “It is absurd to think that the general public can ever make money out of market forecasts.” Benjamin Graham
  7. “The whole secret to winning and losing in the stock market is to lose the least amount possible when you are not right.” William J. O Neil
  8. “It is not whether you are right or wrong that is important, but how much money you make when you are right and how much you lose when you are wrong.” George Soros
  9. “If you want to have a better performance than the crowd, you must do things differently from the crowd.” John Templeton
  10. “My first rule is not to lose money. Losing an opportunity is minor in comparison, because there are always new opportunities around the corner.” Burt Dohmen
  11. “Experienced traders control risk, inexperienced traders chase gains.” Alan Farley
  12. “Most traders take a good system and destroy it by trying to make it into a perfect system.”
  13. “Trade what you see, Not what you think”
  14. “A Technician is an Artist and Technical Analysis is the Super Skill of discovering sharp and compact Charts and Patterns depicting Trends and Targets with Precision and Perfection.”
  15. “Identifying the “Rhythmic Flow” of Financial Instruments for skimming the crème, quietly and consistently is the fascinating nature of the Technician’s profession.”
  16. “Like any craft, such as piano playing, perfection may be elusive – I’ll never play a piece perfectly, and I’ll never buy the low and sell the high – but consistency is achievable if you practice day in and day out.”
  17. “You never need to chase a trade. The market has plenty of opportunities. The money runs out before the opportunities do.”
  18. “Good trading is a peculiar balance between the conviction to follow your ideas and the flexibility to recognize when you have made a mistake.”
  19. “Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on.”
  20. “At all levels of play the secret of success lies not so much in playing well as in not playing badly.”

One Liners

  
  Education
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“There are old traders, there are bold traders, but there are no old, bold traders.

“There are a million ways to make money in the market. The irony is that they are all very difficult to find.

“Most traders take a good system and destroy it by trying to make it into a perfect system.

“If you’re going to panic, panic early.

“We don’t see things as they are, we see things as we are.

“If you look around the table and don’t see a sucker, then you are the sucker.

“If you find yourself in the bottom of a deep hole, the first thing to do is stop digging.

“The system wasn’t designed so that most people could beat it.

“At all levels of play the secret of success lies not so much in playing well as in not playing badly.

“The most dangerous thing in the world is to think you’ve got the time to play it safe.”

7 Deadly Sins of Trading

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

Perfectionism: There is no perfection in trading as far as making money on every trade or having a perfect system. All you can hope to be perfect at, is following your system, rules, and trading plan. A winning trade should be measured as one in which you followed all your preset guidelines. Even the best traders only average about a 50%-60% win rate at best over long periods of time. The key is having bigger winners than losers, not being perfect. Like in baseball where a .300 hitter can get into the hall of fame. A .500 trader in the market can become wealthy if his wins are much bigger than his losses.

Fear:  Faith in your system is the only way to overcome your fear of trading. You must complete enough back testing on your system until you know that you have a valid edge over the market in the long term. You must see opportunity in trading and just accept that there will be possible losses. You must take your systems trade signals each time and if you can’t overcome your fear of loss and failure then perhaps trading is just not for you. Traders are entrepreneurs not employes they get paid only when successful there is no guaranteed paycheck.

Pride:  We are not our trading account and staring at our profit and loss too much is a major detriment in one’s trading. Traders must cut losses at their predetermined stop, not pridefully hang on trying to prove they are right. We must separate ourselves from the trading. A person’s value is not tied to a trade or performance record. If we followed our system then we can’t view that as a personal loss. The market was just not conducive to our system that we followed with discipline. (more…)

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