Archives of “relationship” tag

rss

Trading Profits in relations to Time and Accuracy

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

The size of profits of a trading system, is related to time and accuracy. They are inter-related and it is not possible to get the best out of all 3 factors in any trading system.

Before I elaborate further, I shall define what these 3 factors mean.

Size of profits – I am referring to the average amount of profits the system will earn per trade.

Time – The average length of time you held on to a trade.

Accuracy – The percentage that the system is correct and earns you a profit.

Big Profits = Long Time = Low Accuracy

For systems that aim for big profits, they must allow a greater range of fluctuations for the trade. By having a large trading range will in turn prevent you from getting stopped out so soon. Hence, you will be in a trade for a longer period of time. Besides having a larger profits, it will also serve you losses that are bigger, because your stop loss limit has to be further from your entry point. It is more difficult to grasp for the relationship with accuracy.

Small Profits = Short Time = High Accuracy

On the contrary, a highly accurate trading system allows you to be right most of the time but each time when you are right, you take very small profits. This is possible by making very tight stops in your trades such that you lock in profits as soon as you make them. Hence, you will be in and out of the trades very fast and frequently. This is typical to intraday trading or mean reversion models or even band trading. (more…)

Never Revenge On The Market

  
  Education
#  #  #  #
revenge-oneThere is a direct correlation between your ability to let the market tell you what it is likely to do next and the degree to which you have released yourself from the negative effects of any beliefs about losing, being wrong, and revenge on the markets. Not being aware of this relationship, most traders will continue to observe the market from a contaminated perspective

Women

  
Education, Humour
#  #  #  #

MD116FJDo you know the relation between two eyes?

They never see each other………. BUT

They blink together
 
They move together
                                       
They cry together

They see things together
 
They sleep together
 
They share a very deep bonded relationship
 
However, when they see a woman, one will blink and another will not.
 

Moral of the story:  Woman can break any kind of relationship!!!

Surfer vs Gambler

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #
surfer-The ocean and the markets have many things in common. For one, they are both a dynamic event that is constantly in flux, and from the average traders point of view, beyond any possibility of manipulation. It is what it is; it will go where it goes.

 

This analogy works if we consider the mindset of a surfer. He knows that he is in a passive relationship to the sea, yet he also knows that he can develop a skill in relationship to its ever changing movements in order to reward himself. The surfer cannot demand anything from the sea, he can only wait for it to present him with an opportunity and engage it when the time is right. To go in during a total calm or a tsunami would be both equally foolish; he must wait for the conditions to be right. (more…)

Surfer vs Gambler

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #
waiting_for_waveThe ocean and the markets have many things in common. For one, they are both a dynamic event that is constantly in flux, and from the average traders point of view, beyond any possibility of manipulation. It is what it is; it will go where it goes.

 

This analogy works if we consider the mindset of a surfer. He knows that he is in a passive relationship to the sea, yet he also knows that he can develop a skill in relationship to its ever changing movements in order to reward himself. The surfer cannot demand anything from the sea, he can only wait for it to present him with an opportunity and engage it when the time is right. To go in during a total calm or a tsunami would be both equally foolish; he must wait for the conditions to be right. (more…)

Never Revenge On The Market

  
  Education
#  #  #  #

revengeThere is a direct correlation between your ability to let the market tell you what it is likely to do next and the degree to which you have released yourself from the negative effects of any beliefs about losing, being wrong, and revenge on the markets. Not being aware of this relationship, most traders will continue to observe the market from a contaminated perspective

Money Can't Buy You Love, but What about Happiness?

  
Analysis, Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #
This Great Graphic is from theEconomist. It is based on the work of two economists, Betsey Stevenson and Justin Wolfers. A recent research paper looks at the relationship between self assessments of one’s well being and the self-reported annual income.  
 
For nearly 40 years now the conventional wisdom is that money can’t buy happiness.  Stevenson and Wolfers challenges that view.  Their work finds that consistently in the various countries they look at people were happier (claimed to have higher levels of “life satisfaction”) as drew higher incomes.  Moreover, there does not seem to be a point of diminishing returns:  the more income the greater the “life satisfaction” ratings.    (more…)

The Process of Invention

  
  Education
#  #  #  #  #  #  #  #  #

When inventing your own trading system or strategy as I prefere to call it, you are constantly asking questions. In a sense, you enter into a passive relationship to the market where it is telling you about itself – thats the big change in mindset from being a newbie. When you are a newbie you want the market to do what you want (i.e. “my system says it should go up, so GO UP!”). At the same time as demanding, you are hoping – your WILL is involved.

When you enter this frame of mind I’m talking about, you have no more demands of this nature, but rather are trying to get ‘in step’ with what the market is and how it behaves – you subordinate your will to the will of the market; it speaks to you if you shut up and listen. For instance, the market suddenly turns on a dime and you give back all your profits. The market has spoken to you and said “sometimes I have unexpected price shocks and it looks like this”.
Instead of cursing this event a question suddenly arises in your mind such as “Hmmm….. I need to think of a way to deal with price shocks.” You ponder this like a puzzle – you try some things, and think about it. This is the process of invention.

Believe me, when at the end of this you have a way to deal with, for instance, sudden turns in price action you will NOT struggle to force yourself to stick to the “rule” – this rule is not imposed on you from outside, you created it. The process was also interesting, challenging and enjoyable; you are a creative trader who is genuinely interested in the subject.

60 Minutes: Bill Gates 2.0

  
Analysis, Education, Video
#  #  #  #  #  #  #  #  #  #  #

For Bill Gates, technology is still the solution. He shows Charlie Rose some inventions he’s working on to help heal the world.
Bill Gates speaks with unexpected emotion about his relationship — and rivalry — with the late Steve Jobs; and, he goes back to Lakeside, the Seattle high school where a rummage sale held by the mothers’ club set him on his path to help change the world. Then, Outtakes from a psychology professor’s lab in which children had to choose between fairness and chocolate
 

Happiness and Quality of Life

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

1) Inner Abundance – This relates to self-care and maximizing one’s energy and internal resources;
2) Quality Time – Time spent by oneself, for oneself;
3) Finding Meaning – Having goals that give purpose and significance to life.
The key idea here is that happiness is not just something that happens to people. It is the result of one’s relationship to oneself. 
I encounter many traders who lack a sense of abundance–they are forever fearing that they will miss market moves and opportunity. I find many traders that lack quality time: they are slaves to the screen and experience more frustration than joy in their efforts. I also see many traders who derive little sense of meaning and purpose in their work. If they’re not making money, they are not happy. (more…)

Go to top