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Justin Mamis – When To Sell

  
  Education
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when-to-sell
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How Professionals Minimize Losses page 73-75:

Blaming ‚them’ is a psychologically and socially acceptable way to avoid blaming oneself. Yet professionals can, and do, make mistakes. When they buy a stock and it doesn’t go up (even if it doesn’t go down) that’s wrong enough for them, simply because it did not perform as expected. The pro reasons that the stock went against his judgement, so he sells it. And he doesn’t expect to be perfect, any more than a professional baseball player expects to bat 1.000. Knowing that losses are inevitable, he seeks to minimize them at all times. To be sure, his ability to take a small loss is enhanced by the benefit of not having to reckon with commission costs, but even so, if he were relatively incompetent he wouldn’t last long in the business; the loss might be less, or slower to pile up, but the return on invested capital would be dismal enough eventually to send him to another field.

Rule One of the professional trader is: When a stock doesn’t do what you expect it to do, sell it. (more…)

TRADING EMOTIONS

  
  Education
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The hardest thing to master as a trader once you understand Market Rhythm is not the market, it is YOU. Emotional trading will break you fast.

Trading is not hard, it is mastering your emotions that is. Trading will teach you more about your human short coming than visiting a psychiatrist. As a trader, you must learn the discipline of waiting for proper market set-ups. That is hard!

Your EMOTIONS are screaming for you to jump in or you will miss out. NOT TRUE!! If you miss one trade set-up, the market is generous and will give you another. Learn to trade in harmony with your trend and with proper signals.

The emotions that are deadly to your trading success.

REVENGE, we all know it and have done it. It happens when you are tricked by the market and decide to take another trade before looking at the big picture, then BAM you are on the wrong side of the trade again. Pissed off and refusing to move while your money is going further down the drain. Scared to let go for fear that you are going to get tricked again.

PANIC, that is when you lack the confidence to enter or ride a profitable trade. This happens when you have taken some hits and now you lack the confidence to trade profitably.

IMPATIENCE, this happens when you can’t wait for a proper trade set-up and jump on a price hiccup/retracement, often finding yourself on the wrong side of the trade.

ANGER, you know that feeling that comes over you when you have taken a hit or two and you want to kill your computer. (more…)

Four is the 'magic number', not seven

  
Analysis, Education
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Four, not seven, is the “magic number” when it comes to items of information the mind can cope with before confusion sets in.

 A new analysis by a leading Australian psychiatrist challenges the long-held view of psychological lore of seven being the number, suggesting it might actually be four.

In 1956, American psychologist George Miller published a study in the influential journal Psychological Review arguing the mind could cope with a maximum of only seven chunks of information.

The study paper, “The Magical Number Seven, Plus or Minus Two. (more…)

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