There is so much ink and pixels spilled on how to succeed in trading. So I thought, I would zag instead of zig and outline how to fail as a trader. Without further ado, the 10 vital steps you must take in order to fail in trading:
Respect the price action but never defer to it.
The action (or “eyes”) is a valuable tool when trading but if you defer to the flickering ticks, stocks would be “better” up and “worse” down-and that’s a losing proposition. This is a particularly pertinent point as headlines of new highs serve as sexy sirens for those on the sidelines. (more…)
As a trader you must have three pieces working in synch. Your equipment, your trading tools, and your mind. The Art of War by Sun Tzu is a book that has been applied to every facet of human experience. While originally meant to be a book that taught war strategies the lessons it imparts can and will change your life. (more…)
A list of golden sayings and rules I have gleaned from many sources:
There are probably more, send ’em in…
The secret of discipline
Discipline seems to be that elusive element in trading, the thing you just can’t seem to get no matter how hard you try. Its a willo-the-wisp that we’ve only heard rumours about. Do you jump from system to system, method to method, change your chart constantly and have a favourite indicator of the month? We roughly call this poor discipline.
However I’ve discovered that there is something more fundamental underneath this behavior, which is a lack of belief in the system you are using. You have no faith in it. If you did, all such behavior and “discipline problems” would vanish in a puff of smoke.
To prove the point, consider this: imagine if I gave you a magic box, and if you put a dollar in this magic box and pulled the lever it would always dispense one dollar fifty.
What would you do? Yes thats right, you would do it over and over and over wouldn’t you? Probably for hour upon hour you would do it.
Would you at any time become bored with this magic box and go in search of a better one? Would you try to improve it or invent your own? If you had absolute faith in the fact that the box will dispense the dollar fifty I say you would have no discipline issues what so ever. You’d sit there putting in dollars and cranking the handle like maniac.
The problem is that in trading the dispensing of the dollar fifty is not so obvious but blurred under a win / loss ratio and other complications, but quite honestly the process of trading is the same.
Hence I say that if you are still jumping from system to system and have poor discipline, try reframing it as having no faith or belief in the system you are using.
The markets do not know you!
You do not exist to them in any other form than as the other side of a transaction.
They do not care if it is your last cent, and your kids will not have milk, and on, and on.
Markets need losers so they can make money in this zero-minus-sum game.
But please … do remember that taking an acceptable risk reward ratio position and being wrong is not losing!
Whether you win or lose, you should always strive to remain at a comfortable emotional state. Building a
proper plan is enormously helpful in getting you to do just that.
Many people know what to do; yet very few are able to do what they know! It is the rules that force one
to take the proper actions.
Losers often think that the rules are made for others. Think that they are not for you?
Think again!
Fight the rules and you will have a very short career!
The stock markets can be a great place to turn your savings into wealth.
On the other hand, if you do not keep the fundamental investment rules and do not follow certain
simple stock investing basics, you can lose your shirt.
Anirudh sethi says that IF: (more…)
The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading. I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.”
Test……..one million……..two million…………three million…
This is how Buffett tested the microphone before his speech at the annual shareholders’ meeting of Berkshire Hathaway. He really enjoys the game of making money. Not to spend it, but to accumulate it. The early investors in BH turned $10,000 into $100 mill for 40 years. (more…)
