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Archives of “PRIDE” tag
rss11 Trading Thoughts
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Today I know that …
My lessons may have been costly ,but they brought with them a kind of undertstanding more precious than gold.
😆 Playing the market is much different from being an investor.
😆 Pride is another word for stupidity if you claim credit for profits temporarily created by a bull market run wild.
😆 Paper profits are the illision of wealth created by the myopia of greed.
😆 Margin is a secuctive temptress more enticing than Delilah-and far more dangerous.
😆 Money doesn’t make people better ;it just allows them to become kinder and more charitable.
😆 Losing money doesn’t mean you’re a fool ,just as making a fortune doesn’t prove you’re a genius.
😆 Maturity means knowing how to cope with failure-and with sucess.
😆 The market respects those who treat is seriously and research it thoroughly ;it mocks those who think its rewards are freely granted to the followers of friendly tips and exicted phone calls from “helpful” strangers.
😆 Just as in every other game of chance ,all of your winning should never be left on the table.
😆 The law of gravity was not repealed for the sake of Dalal street ;even there the rule still holds that “whatever goes up must come down .”
😆 Forgiveness is a virtue even to myself ;I can forgive the fact that I failed-because I know that Iam not a failure.
Larry Hite on “Being Wrong”
One final important gem from Larry Hite is that being wrong is okay. He says he was never very good in school and not much of an athlete either. But he turned that to his advantage because he was able to grasp the idea that he could be wrong. In fact, it came as no surprise to him when he was wrong. Hite recalls with pride: “I’ve always built in an assumption of wrongness [in my trading]. I always ask myself: What is the worst thing that can possibly happen in this scenario? Then I use that worst-case scenario as my baseline. I always want to know what I’m risking, and how much I can lose. And sometimes, when you really look at it, there’s really not all that much risk [which is why you can get rich].”
Trading Wisdom
- Buy from the scared, sell to the greedy.
- Buy their pain, not their gain.
- Successful traders are quick to change their minds and have little pride of opinion.
- I made my money because I always got out too soon. (Bernard Baruch)
- Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars. (Bernard Baruch)
- Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting. (Jesse Livermore)
- The faster a stock has climbed, the quicker it will fall.
- The more certain the crowd is, the surer it is to be wrong. (Menschel)
- Bear markets begin in good times. Bull markets begin in bad times
- Never confuse genius with a bull market.
- Always sell what shows you a loss and keep what shows you a profit
The Emperor’s Three Questions & Answers for Traders
Tolstoy’s story “The Emperor’s Three Questions” poses three questions:
1. What is the best time to do each thing?
2. Who are the most important people to be with?
3. What is the most significant thing to do at all times?
In the story, the Emperor traveled far and wide in his Kingdom to find the answers. One day, he came upon a hermit who lived in a small hut atop a high hill. When asked these questions, the humble hermit replied:
1. The most important time is now, because that is the only time over which you have power and control.
2. The most important person is the one you are with right now because you never know if you will be with that person again.
3. The most significant thing to do at all times is be happy and share that happiness with the person you are with.
The 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.
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…Howard Cosell
Trading Wisdom Not Heard Often
- Buy from the scared, sell to the greedy.
- Buy their pain, not their gain.
- Successful traders are quick to change their minds and have little pride of opinion.
- I made my money because I always got out too soon. (Bernard Baruch)
- Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars. (Bernard Baruch)
- Throughout all my years of investing I’ve found that the big money was never made in the buying or the selling. The big money was made in the waiting. (Jesse Livermore)
- The faster a stock has climbed, the quicker it will fall.
- The more certain the crowd is, the surer it is to be wrong. (Menschel)
- Bear markets begin in good times. Bull markets begin in bad times
- Never confuse genius with a bull market.
- Always sell what shows you a loss and keep what shows you a profit
Qualities of Successful Traders
Emotional stability. You don’t have to be nuts to trade, but it helps! That is a joke, of course. Emotional stability is grace under pressure. A successful trader must be able to remain calm in difficult situations. Traders that rank very high on the emotional stability scale have very low anxiety levels, remain calm, relaxed, and have a low suspicion level. They tend to be trusting individuals and are not paranoid. You won’t hear them blame the market makers for forcing the stock to hit their stop and they take responsibility for their actions. Successful traders tend to be well
grounded.
Discipline. Successful traders are ones that can follow the rules. They are the guys that drive the speed limit. They tend to be perfectionist and take pride in their work. They like to take a project from start to finish and get joy from completing it successfully. Pilots, trained to follow checklists, tend to make good traders. An impulse oriented individual will have difficulty achieving the discipline to become a successful trader.
Intelligence. Bill says that successful traders tend to be intelligent. They need not have the IQ of Einstein but they are above average in intelligence. They tend to be good problem solvers and good with numbers, such as statistics. They understand that trading is based on probability, that not every trade will work as planned.
The Price and Ego
Technicians seem to be more willing to accept a small loss generated by the trading system than fundamental traders. Traders must accept the assumption that the markets reflect the true reality. Our pride and opinions should not interfere with sound trading approaches.
7 Deadly Sins of Trading
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…)