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Market Truisms and Axioms

  
  Education
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• Commandment #1: “Thou Shall Not Trade Against the Trend.”

• Portfolios heavy with underperforming stocks rarely outperform the stock market!

• There is nothing new on Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again, mostly due to human nature.

• Sell when you can, not when you have to.

• Bulls make money, bears make money, and “pigs” get slaughtered.

• We can’t control the stock market. The very best we can do is to try to understand what the stock market is trying to tell us.

• Understanding mass psychology is just as important as understanding fundamentals and economics.

• Learn to take losses quickly, don’t expect to be right all the time, and learn from your mistakes. (more…)

The 10 Commandments

  
Education, Life
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1. Thou shall not go against the trend.
If it be down, let it be down. The market is bigger and stronger than you. 
Follow the market but be one step ahead of the crowd.
2. Thou shall not follow the herd instinct
Just because many people are buying a certain stock does not mean you should follow suit. If people want to buy rubbish stocks, that is their bad luck. Don’t make it yours.
3. Thou shall treat the market as a business, not a casino
The stock market is not meant to be a casino and you should not be there to gamble. 
4.Thou shall not buy high-debted and no-earnings stocks
All companies that folded are highly geared with negative earnings. Don’t buy rubbish shares; don’t buy somebody’s liabilities.
5. Thou shall only buy solvent companies with good-growth prospects
Present earnings are important, but future earnings are more important. That’s why we have companies selling at high PER (Price earnings ratios).
6. Thou shall not be overconfident
Overconfidence leads to overtrading. Once you overtrade, you may not be able to control your own emotion. Fear may set in when the market is not going the way you expect it. It may disrupt your plan, turning your profitable trade into a loss. 
7. Thou shall invest within the comfort zone
Don’t be too greedy; don’t play with borrowed money. Debt is a disease. It can cause you a lot of problem if you are not careful.
8. Thou shall be patient
The market is designed to transfer money from the impatient to the patient. You must have very good reasons before you switch counters. Very often, the shares you sell move up faster than the shares you buy.
9. Thou shall be disciplined
Don’t change your strategy at the eleventh hour. If you have placed a stop-loss in your chart, don’t remove it unless it is replaced with a trailing stop-loss.
10. Thou shall be knowledgable
Investment in knowledge pays the best dividend. No one is so skillful that he cannot better his best. Keep learning for knowledge is boundless

The Easiest Daytrade To Make

  
Analysis, Education
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ss-7853536-potOfGold Essentially there are 3 timeframes to trade when it comes to “daytrades”:

1) the open

2) the close

3) and everything else in between

As you know by now, #3 is really the toughest to trade. It is the lowest probability trade of the three types, and your stops frequently get hit. Frequently, even if we get the direction right it is not very profitable because we get whipsawed like crazy. However, this is where many trades can be made, so the scalps do add up to a good chunk if you know what you’re doing.

So those who had joined us and getting Intraday calls-ofcourse having upperhand and minting money. (more…)

Market Wizard’s 25 Trading Clichés and Axioms to Follow, Memorize and Practice

  
  Education
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  1. THE MARKET ITSELF IS THE ULTIMATE WEILDER OF JUSTICE. JUDGE, JURY AND PROSECUTOR.
  2. RECIPE TO LOSE FOR SURE: OVER-ANALYZE, PROCRASTINATE, HESITATE.
  3. LEARN TO SWEAT OUT, HANG ON TO AND SCALE OUT OF YOUR WINNERS.
  4. HIT SINGLES AND DOUBLES, NOT HOMERUNS. THE HOMERUNS ARE USUALLY THE RESULT OF GOOD TRADING AFTER A PROFITABLE TRADE HAS STARTED TO MAKE ITS MOVE
  5. A BIG LOSS CAN DESTROY YOU. IS RISK WORTH TOTAL DESTRUCTION?
  6. LOVE TO LOSE MONEY. NOT BECAUSE YOU’RE AN IDIOT, BUT BECAUSE LOSING MONEY IS AN IMMEDIATE FEEDBACK MECHANISM. EMBRACE THE SIGNAL AND DITCH THE TRADE.
  7. NEWS IS HISTORY. THIS IS THE MOST IMPORTANT AND LEAST OBSERVED RULE. DAYTRADING ARCADES UP AND DOWN WALL STREET HAVE DOZENS AND DOZENS OF LCD’S TUNED TO ONE STATION, CNBC. BY THE TIME THEY PUKE IT OUT, IT’S ABOUT 7 TO 12 HOURS OLD. THERE IS NO SUCH THING AS “BREAKING NEWS” ANYMORE. SOME TRADERS TELL ME THEY TUNE IT OUT. YOU CAN’T. IT GETS INTO YOUR SUBCONSCIOUS AND AFFECTS YOUR TRADING. PUT YOURSELF ON A TOTAL NEWS BLACKOUT FOR A WHILE AND SEE WHAT HAPPENS TO YOUR RESULTS. LOSE TOUCH WITH THE REST OF THE WORLD. ISOLATE YOURSELF TO YOUR ALGORITHMS, DATA, CHARTS AND MASTERING YOUR TRADING PLATFORM. AND IF YOU WORK FOR A FIRM WITH DOZENS OF LCD’S TUNED TO CNBC, MAINLY SO THAT THEIR “GUY” WHO IS ON ONCE A WEEK IS SEEN AND HEARD BY EVERYONE AT THE FIRM. THIS PERSON RARELY KNOWS HOW TO TRADE. I KNOW OF A FEW FIRMS OUT THERE LIKE THIS.
  8. THE FIRST LOSS IS THE BEST LOSS BECAUSE IT HURTS THE MOST. LEARNING TO LOSE IS IMPORTANT. LEARNING TO LOSE AS LITTLE AS POSSIBLE IS THE MARKET’S PAVLOVIAN WAY OF TEACHING YOU HOW TO TRADE PROFESSIONALLY AND PROFITABLY
  9. EARN THE RIGHT TO TRADE BIGGER. YOU’LL KNOW WHEN YOU’RE READY. DON’T RUSH IT. THE BIGGER YOU GET, THE MORE IMPORTANT EXECUTION STRATEGY BECOMES. YOU DON’T WANT TO BE SLOPPY, LIKE MOST PEOPLE I’VE MET, EVEN THOSE THAT WERE SO CALLED MENTORS TO ME, OR WHO I CALLED “MAESTRO”. SLOPPIEST TRADER IN THE WORLD. TINY ORDERS LEAVING ELEPHANT FOOTPRINTS WHILE SMART TRADERS TAKE MAMMOTH ORDERS AND DON’T MAKE A RIPPLE
  10. BE YOURSELF. DON’T TRY TO BE SOMEONE ELSE. FIND THE STRATEGY THAT WORKS FOR YOUR PSYCHE. IT TAKES WORK, READING, TESTING, AND INNER-REFLECTION. YOUR CHARACTER HAS THE CORRECT STRATEGY OUT THERE. YOU HAVE TO FIND IT. DON’T TRADE WHAT SOME SCHMUCK WANNABE HEAD TRADER AT A SHADY FIRM TELLS YOU TO TRADE, OR USE A STRATEGY TAUGHT BY A FIRM THAT LETS YOU ONLY TRADE THAT STRATEGY. GET OUT OF THESE FIRMS. (more…)

Trading Mantra's

  
  Education
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“Technical analysis is a windsock, not a crystal ball. It is a skill that improves with experience and study. Always be a student, there is always someone smarter than you!

“Thou Shall Not Trade Against the Trend.”

Let volatility work in your favor, not against you.

Emotions can be the enemy of the trader and investor, as fear and greed play an important part of one’s decision making process.

Portfolios heavy with underperforming stocks rarely outperform the stock market!

Even the best looking chart can fall apart for no apparent reason. Thus, never fall in love with a position but instead remain vigilant in managing risk and expectations. Use volume as a confirming guidepost.

When trading, if a stock doesn’t perform as expected within a short time period, either close it out or tighten your stop-loss point.

As long as a stock is acting right and the market is “in-gear,” don’t be in a hurry to take a profit on the whole positions, scale out instead.

Never let a profitable trade turn into a loss and never let an initial trading position turn into a long-term one because it is at a loss.

It’s not the ones that you sell that go higher that matters, it’s the ones you don’t sell which go lower, that do.

Don’t think you can consistently buy at the bottom nor sell at the top. This can rarely be consistently done. (more…)

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