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A Lesson from Einstein

A lesson I learned from Einstein is the benefit of being able and willing to changes one’s mind. At times a pacifist, he changed after witnessing the rearmament in Europe. In physics and science in general when presented with new evidence it is quite normal to revise theories and mathematical proofs, or even to reverse a position entirely. Putting ego aside, he did this many times, most famously dropping his famous Constant variable regarding a static universe when through experiment it was proved no longer necessary. This is skill which comes more naturally at a younger age, but is quite possible for the post 40 crowd as he demonstrated in his long career.

How Stephen Hawking Understands The Universe In 150 Seconds [VIDEO]

Have you ever wondered how the legendary Stephen Hawking thinks about the universe? He has worked on some of the most mind-boggling physics and cosmology questions, like what’s at the center of a black hole. This video from The Guardian’s Made Simpleseries, animated by Scriberia, explains some of the main ideas of Hawking’s complex theories from his book A Brief History of Time, in just 150 seconds.

Here are some of the highlights from the video.

What actually is at the center of a black hole? A singularity – or tons of matter packed into a tiny space. That high concentration of matter basically creates infinite gravity – that’s why nothing can escape a black hole.

What happens when a black hole disappears? It explodes, and the explosion has a force equivalent to a million nuclear bombs.

Why is Stephen Hawking so well-known? His work suggests that at one point, everything in our universe was squeezed into one of those singularities. Then, it exploded into the universe as we know it now.

10 Questions to ask Yourself Before Every Trade

  1. What is the overall direction the market is moving with in your time frame and the larger time frame?

  2. What time frame will you be trading with your next trade?
  3. What is your entry signal and what is its historical performance as a winning set up?
  4. How much money will you risk on this trade?
  5. How big will your position be for this trade?
  6. How will you know you are wrong and stop your loss?
  7. How much profit do you believe is possible if it moves in your favor?
  8. How will you know when it is time to exit with a profit?
  9. What is your ratio of reward versus risk?
  10. How many trades will you have on at any one time?

2 Different Types of Entry Signals

Momentum Signals:

  1. This is buying into price strength.
  2. You buy high trying to sell higher or sell short low trying to cover even lower.
  3. You are buying a breakout of a range with the possibility that the break out level you bought becomes the new support.
  4. You are trading a trend of higher highs or lower lows.
  5. You are trading an asset under accumulation and the price is rising higher and higher as a trend continues.

Buying Support:

  1. You are buying weakness on the possibility that the low is in.
  2. You are buying oversold levels and believe that a snap back is imminent.
  3. You are buying pullbacks to key support levels in an uptrend.
  4. You are buying fear looking to sell it higher when an asset reverts to the mean.
  5. You are buying at technical levels that history shows presents a great risk/reward ratio and limited downside.

Money can be made buying dips and buying break outs. The keys to profitability lie in the winning percentage and the risk/reward ratio.

Einstein's Scribbled Theory On Happiness Sells For $1.6 Million – 195x Highest Expectations

A scribbled note by Albert Einstein which described his theory on the key to happy living was sold at auction in Jerusalem for $1.56m.

According to The Telegraph, the winning bid for the note far exceeded the pre-auction estimate of between $5,000 and $8,000,according to the website of Winner’s auction house.
“It was an all-time record for an auction of a document in Israel,” Winner’s spokesman Meni Chadad told AFP…Bidding in person, online and by phone, started at $2,000. A flurry of offers pushed the price rapidly up for about 20 minutes until the final two potential buyers bid against each other by phone. Applause broke out in the room when the sale was announced.
The newspaper reports that Einstein was on a lecture tour of Japan in 1922 and had recently been awarded the Nobel prize. Einstein didn’t have cash to pay a tip to a bellboy in the Imperial Hotel in Tokyo, so he gave him two notes, predicting they would be worth more than a tip. He is reported have said.

 “Maybe if you’re lucky those notes will become much more valuable than just a regular tip.”

The Telegraph continues, Einstein dedicated his life to science, but suggested in the notes that fulfilling a long-term ambition doesn’t necessarily guarantee happiness.
The note said.

“A quiet and modest life brings more joy than a pursuit of success bound with constant unrest.”

The anonymous buyer was from Europe.
The notes were sold by an anonymous Hamburg resident who commented “I am really happy that there are people out there who are still interested in science and history and timeless deliveries in a world which is developing so fast.”
On the second note was written “where there’s a will, there’s a way”. It sold for $240,000.

Goals reduce your current happiness

When you’re working toward a goal, you are essentially saying, “I’m not good enough yet, but I will be when I reach my goal.”

The problem with this mindset is that you’re teaching yourself to always put happiness and success off until the next milestone is achieved. “Once I reach my goal, then I’ll be happy. Once I achieve my goal, then I’ll be successful.”

SOLUTION: Commit to a process, not a goal. (more…)

Physics Envy and Economic Theory

Economists were seduced by physics because it made their claims seem more scientific. Their belief was in the concept of equilibrium, in which it would be impossible to profit from trading around a circle of goods or a circle of currencies without actually producing anything. Of course, that is possible, and that did happen, and that’s because you’re never really at equilibrium.

How bear markets affect our decision making

READ THIS NOWAs of this Friday, the S&P 500 has gone 980 days without a 10% decline, according to Birinyi Associates, the fifth-longest such stretch on record. This past week’s nervousness, set off by the insurgency in Iraq and the surprise defeat of U.S. Rep. Eric Cantor, is thus the perfect pretext for investors to think about what they will do when the market takes a serious beating.

For, sooner or later, it surely will—and those investors who have honestly prepared for it will stand the best chance of surviving unscathed. In a downturn, you won’t be the same investor that you are now—unless you rely on rules and procedures, rather than willpower alone, to regulate your behavior.

New research shows that the kind of stress brought on by a collapsing stock market fundamentally changes how people make financial decisions. (more…)

19 Ways to boost your motivation and personal effectiveness

1. Get an accountability buddy. Not only does having an accountability buddy help you stay on track to achieve the results you want, they are also a great source of motivation and keeping you effective too. To find out more about having an accountability buddy read 1o reasons to have an accountability buddy and How To Find An Accountability Buddy

2. Protect yourself from energy draining and toxic people. They will suck the life out of you and have a negative impact on your motivation and effectiveness.

3. Surround yourself with positive, constructive, solution focussed people who fuel your fire. It will give a tremendous boost to your energy levels which has a fairly hefty knock on effect to your motivation and effectiveness.

4. Create a powerful vision for your life, work and relationships. Keep focussed on it and visualise achieving it each and every day. It will help you keep motivation going when you experience setbacks, obstacles or when the brown stuff hits the fan.

5. Get fresh air – every day. Amazing the difference this makes. Try it.

6. Spend time in nature and the great outdoors. Fabulous stress buster and as stress is a motivation and effectiveness drainer this is worth doing.

7. De- clutter your mental and physical space.

8. Do more things that give you mental and physical energy. Do less of the things that drain your mental and physical energy. For a practical tip on how to do this read this.

9. Have a strong action plan and work that baby consistently! (more…)

12 Signs of Stress for Traders

Markets have been particularly volatile recently, at least for intraday traders and daytrading can create a significant amount of stress. Because our bodies are designed to adapt to stress, we may fail to realize that we are stressed out.
Here’s an inventory of common trader behaviors that may signify excessive stress.
12 Signs of Stress
1. A vivid fantasy of making lots of money today.
2. Feelings of invulnerability.
3. Eating breakfast or lunch at your trading desk.
4. Hyperfocus on price bars as they form.
5. Talking out loud to the market.
6. Bargaining with the market about an open position.
7. Cursing at the market.
8. Expressing irritation at partner, kids, pets, plants, inanimate objects.
9. Sudden urge to increase position size or frequency.
10. Canceling or moving stops for no good reason
11. Adding to a losing position.
12. Trading in your underwear !
TIP: Stress degrades decision-making. If you are stressed out, shift your focus