Archives of “philosophy” tag

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Greed is the Flip Side of Fear- Anirudh Sethi

  
Analysis, Education
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Most people, I accept, would concur that childishness isn’t the reason for a solid, supportable society. Who of us needs a family where everybody pays a special mind to themselves, a club where individuals are attempting to sabotage our status or even a business where we should consistently watch our back. Individuals need and need to confide in each other. We need others to acknowledge what we need to state, to giggle at our jokes, to be concerned when we let them know of a mishap or sickness. At the point when we appear at a gathering, we need everybody to be glad to see us. To live in any case in a disconnected, defensive state is a bitterness.

 

To take a model, our lawful framework is of the “ill-disposed” sort, where we employ attorneys to guard our inclinations. In the court, truth is ever challenged. The proof is chosen and deselected. As disputants, our solitary desire is to be decided in a positive light. We are there to win.

 

Is our political framework very different? Constituent legislative issues, as an ongoing President put it, is no “round of bean-sack.” Most of us have come to acknowledge the possibility that government officials are going to slight each other. Decisions are events for crazy cases, inert gloats, and contemptible ambushes. Mud is tossed. Some of it sticks. When chosen, our side must indict its own point of view. Helping out the foe, in any event, tuning in to them genuinely, is taboo.

 

Our instruction framework comparatively prizes independence. We all are there to get our own degrees and push ahead with our own lives. Evaluations are an individual issue; papers and tests should communicate that. Gathering study, mentoring, and so forth are acknowledged; so are joint introductions. Yet, on the most significant occasions, it is the person’s abilities and information both probably exclusive issues that are estimated. (more…)

Oil – Aramco says repairs to Saudi plant could take many months rather than weeks

  
Analysis, Crude
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DJ with the report on a more pessimistic outlook for repair time compared to what the market was led to believe last week.

Oil traders might like to take note, should be a bullish input (compared to otherwise)

Weekend HK press – China questions whether to continue trade talks with the US

  
  Analysis
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An opinion piece from an account associated with State media Economic Daily newspaper expressed pessimism about whether trade talks with the United States should continue

This in response to US President Trump’s new tariffs on China
  • It said Trump’s latest threats as “destructive”
  • “The US has again stepped back from their promises for two reasons: to pressure China into fulfilling [America’s] expectations in the deal, and to attain someone’s political aims by meddling in the Sino-US trade talks”
  • via South China Morning Post
Negatives build for  China proxy trades (such as AUD)
An opinion piece from an account associated with State media Economic Daily newspaper expressed pessimism about whether trade talks with the United States should continue 

Marty Schwartz Quotes

  
  Education
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Marty has scored enormous percentage gains in every year since he turned full time trader in 1979, but he has done so without ever losing more than 3 percent of his equity on a month-end to month-end basis. In the US Investing Championships held by Stanford University Professor Norm Zadeh, his performance was nothing short of astounding. In nine of the ten four-month championships he entered, he made more money than all the other traders combined. His average return in these nine contests was 210 percent – non annualized! In his single entry in a one-year contest, he scored a 781 percent return.  

“I turned from a loser to a winner when I was able to separate my ego needs from making money. When I was able to accept being wrong. Before that, admitting I was wrong was more upsetting than losing the money.” 
”When I became a winner I went from ‘I figured it out, therefore it can’t be wrong’ to ‘I figured it out, but if I’m wrong, I’m getting the hell out, because I want to save my money and go on to the next trade.”
”By living the philosophy that my winners are always in front of me, it is not so painful to take a loss. If I make a mistake, so what! “
”Before taking a position always know the amount you are willing to lose.”
”The most important thing is money management, money management, money management. Anybody who is successful will tell you the same thing.”
”I always take my losses quickly. That is probably the key to my success.”
”The best advice I can give to the ordinary guy trying to become a better trader is Learn to take losses. The most important thing in making money is not letting your losses get out of hand.

Trading Wisdoms

  
  Education
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That enormous profits should have turned into still more colossal losses, that new theories should have been developed and later discredited, that unlimited optimism should have been succeeded by the deepest despair, are all in strict accord with age-old tradition.

Benjamin Graham

A trading philosophy is something that cannot just be transferred from one person to another; it’s something that you have to acquire yourself through time and effort. 

Richard Driehaus

The essential element is that the markets are ultimately based on human psychology, and by charting the markets you’re merely converting human psychology into graphic representations. I believe that the human mind is more powerful than any computer in analyzing the implications of these price graphs. 

Al Weiss

Opportunities change, strategies change, but people and psychology do not change. If trend-following systems don’t work well, something else will. There’s always money being lost, so someone out there has to win. 

Gil Blake, New Market Wizards

Patience

  
  Education
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PATIENCE FOR U1) If you insist on trading during unstable or volatile markets, keep your positions small.

2) If you go into cash, don’t get upset on days when we rally, it’s simply part of the game.

3) Don’t buy or sell stocks because someone else is doing it. Have your OWN plan, find a philosophy that works for YOU, and don’t blindly follow anyone!

4) Wait for the wind to be at your back. Right now, it’s swirling. No sense in forcing trades to make a few pennies when there are dollars to be made in better environments.

5) Let the market correct, let the dust settle, don’t be in such a rush to trade. I see too many people trying to bottom-fish this market and I feel like screaming: “You don’t have to trade!”

I am not saying all this to be an ass. I simply want traders to learn from my mistakes. I have lost too much money in the past by forcing trades in unfavorable environments. You are better off protecting your capital and more importantly, protecting your confidence. Wait for proper bases to form, wait for some institutional accumulation, and wait for sentiment to be “less bullish.” In other words, wait for a healthier environment…it might not be that far away. The key right now is discipline and patience.

THE CAT STEVENS PHILOSOPHY

  
  Education
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We tend to think that taking a loss on a trade is the end of the world when it is not.  It is just a trade that did not work out.  Period.  No need to re-invent the wheel, throw out the baby with the bath water, or cry wolf one too many times.  Maybe we should simply have the attitude of Cat.
… if I ever lost my hands
Lose my plough, lose my land
Oh, if I ever lose my hands- Oh, if…
I wont have to work no more
And if I ever lose my eyes
If my colors all run dry
And if I ever lose my eyes – Oh,
I won’t have to cry no more
And if I ever lose my legs
I won’t moan and I won’t beg
Oh if I ever lose my legs- Oh if…
I won’t have to walk no more
And if I ever lose my mouth
All my teeth, north and south
Yes, if I ever lose my mouth- Oh if…
I won’t have to talk…
Let’s add another stanza here for the stock trader…
… if I ever lose a trade
The Market takes the money I could have made
Oh, if I ever lose a trade…
I won’t have to brag no more!
Kind of puts things in their proper perspective doesn’t it?

SELF DISCIPLINE

  
Education, Life
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Developing Self-Discipline is something that you can start doing right NOW. It doesn’t take vigorous special forces training, nor does it require being related to the almighty samurai bloodline. Instead it requires will, devotion and regular action.

  1. Start by cultivating a desire. Do that by understanding the incredible benefits of such an achievement. The majority of human endeavors fail because humans themselves quit; they quit because their mind and emotion subdues their will and discipline. Such a trait shall make you unstoppable.
  2. Use what is coined by NLP (Neuro-Linguistic Programming) as an Incantation. Stand up and energetically state that you shall achieve this regardless of anything, it’s crucial to incorporate physical movements as well. This molds a stronger message in your mind due to the incorporation of emotion and physicality. Repeat this daily.
  3. Analyze yourself; know where your discipline falls short and is mostly likely to fail. Is it exercising, or facing fears, or maintaining dietary habits?  This will create the targets which you shall work upon. Fast results will come from major concentrated action and not from minimal diffused efforts.
  4. Start, initiate your pursuit by working directly on the weaknesses that keep you away from being self-disciplined. Start small and gradually proceed to making big chances. Day by day incorporate more change but avoid overloading yourself.
  5. Once you have tackled one weakness proceed to the other. The conquest for self-discipline is a never-ending one. Acquiring it requires a constant stream of action, otherwise it shall simply leak from your possession.

The Secret Sauce: A Knowledge Advantage

  
  Education
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“What is your secret sauce?

Click here to find out more!

No. 1, it’s possible, especially in inefficient markets, to gain a knowledge advantage. By definition, an inefficient market is one where hard work and skill can pay off. We can also control our psyche and emotions so that we don’t make the human mistakes that are so common. Of course the other thing is we have a philosophy of controlling risk. So that doesn’t necessarily make us the winner rather than the loser in the transaction, but it increases the probability that we engage in transactions of the sort that we and our clients want.”

There are a few ways to access better knowledge in an inefficient market.  You either have better sources, illegal information or you just simply have a superior understanding.  That’s why I always emphasize the importance of a sound top-down approach.  If you don’t understand the monetary system you’re more inclined to make mistakes in micro managing your portfolio.  You make silly mistakes like misunderstanding how the Fed operates, how QE works, how fiscal policy impacts the economy, how bond auctions works, etc etc. Misunderstanding these important macro functions has resulted in endless predictions for hyperinflation, rising bond yields, falling stock prices, etc.  But if you had a sound understanding of the system – if you had a better understanding – you sidestepped all of these predictions that were clearly wrong if you understood how the system works.

You don’t need to cheat or steal to get better information or knowledge.  Sometimes it’s a matter of putting in the effort to obtain it.

BY IGNORANCE THE TRUTH IS KNOWN

  
Analysis, Education
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Whether we choose to believe it or not we do not know the future, nor can we predict it with any consistency.  When the future does play out exactly as predicted luck must be credited.

We stock traders love to predict.  When we are right (which is not very often) we are quick to pat ourselves on the back, staking our claim on expert technical and/or fundamental analysis.  When we are wrong we are just as quick to deny responsibility, usually blaming the “market” for its ignorance.  All too often we justify our losses because we mistakenly believe the market is wrong.

But if the truth be known we are the ones who are ignorant and we choose to remain so.  Ignorance can only be used as an excuse until the truth is discovered.  The truth is we are wrong. The market is always right.

So, here is the truth.

We are ignorant of randomness and uncertainty.  We are ignorant of the many reasons others have for buying and selling, oftentimes diametrically opposed to our own.  We are ignorant of the hidden forces that move markets both intra-day and day to day.  We are ignorant of unforeseen news and how the “market” will interpret it.  We are ignorant of our many and varied biases, too numerous to mention here.  In a word, we are ignorant.

But in ignorance we find truth; in ignorance we find opportunity.  We traders can use our ignorance as a tool for profitability.  But can we handle it?

Can we accept that our expert analysis can be wrong?  Can we accept uncertainty?  Can we admit that our decision making processes are often flawed because of our psychological makeup? Can we accept that the market is always right? Can we handle the truth?

If we dare confront our ignorance we can then proceed to admit to and accept our flawed biases.   We can admit that luck plays a major role in our success.

We can actually exit losing trades.  We can take profits without getting greedy. We can cease to fear the future.  We can accept, and even learn to embrace, uncertainty.  We can then use technical and fundamental analysis as tools to manage our emotionally based biases, not confirm them.   We can become consistent in our decisions.  We can become profitable.

We can discover the truth by our ignorance.

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