Success in all endeavors is requires absence of specific qualities.
1) To succeed in crime requires absence of empathy,
2) To succeed in banking you need absense of shame at hiding risks,
3) To succeed in school requires absence of common sense,
4) To succeed in economics requires absence of understanding of probability, risk, or 2nd order effects and about anything,
5) To succeed in journalism requires inability to think about matters that have an infinitesimal small chance of being relevant next January,
…6) But to succeed in life requires a total inability to do anything that makes you uncomfortable when you look at yourself in the mirror.
Archives of “shame” tag
rssPeter Lynch Quotes
“You can’t see the future through a rear view mirror.” – Peter Lynch
“The best stock to buy may be the one you already own.” – Peter Lynch
“You should not buy a stock because it’s cheap but because you know a lot about it.” – Peter Lynch
“An investment is simply a gamble in which you’ve managed to tilt the odds in your favor.” – Peter Lynch (more…)
This explains almost everything…
Are we addicted to being right? Is being thought of as being right more important to us than actually being right?
You tell me…
From the Harvard Business Review:
In situations of high stress, fear or distrust, the hormone and neurotransmitter cortisol floods the brain. Executive functions that help us with advanced thought processes like strategy, trust building, and compassion shut down. And the amygdala, our instinctive brain, takes over. The body makes a chemical choice about how best to protect itself — in this case from the shame and loss of power associated with being wrong — and as a result is unable to regulate its emotions or handle the gaps between expectations and reality. So we default to one of four responses: fight (keep arguing the point), flight (revert to, and hide behind, group consensus), freeze (disengage from the argument by shutting up) or appease (make nice with your adversary by simply agreeing with him).
All are harmful because they prevent the honest and productive sharing of information and opinion. But, as a consultant who has spent decades working with executives on their communication skills, I can tell you that the fight response is by far the most damaging to work relationships. It is also, unfortunately, the most common.
12 Rules to Invest
1. Do not let trades become investments, but it is ok to let investments become trades.
2. Personality first. Know yourself! (The markets will exploit your weaknesses)
3. Develop your own approach.
4. Be flexible because you will be very wrong.
5. Find mentors. Today! Don’t expect anything from them.
6. START today. While learning how to invest, decide on an amount that you can invest in the markets and dollar cost average. Invest an equal amount of money once a month or quarter for a long period of time.
7. Keep your costs down.
8. Focus on your strengths, invest some profits in your weaknesses.
9. Do not ‘practice’ investing and do not call your investing money ‘Vegas’ money. Develop a routine.
10. Write it down! Start a journal.
11. Immerse yourself in the language of the markets and investing. It has never been easier.
12. Knowing when and how to sell remains the most mystical of processes. I just say do it consistently. There is no shame in leaving money on the table.
Negative Trading Behaviors
*Over Trading in Size *Jumping the Gun *Hesitating *Skipping Trades *Being in A Hurry * Trading without Proper Preparation *Getting Stuck in A Losing Trade *Whipsawing *Breaking Your Trading Rules *Shooting From the Hip * Over Interpreting *Discounting *Trading A Scenario without Reference to Price *Trading Heedlessly *Trading Wildly *Abandoning Your Trading Plan *Not having A Trading Plan *Switching Strategies Frequently *Not having A Proven Strategy *Not Pulling the Trigger *Not Believing the Evidence the Market Provides *Blindly Believing A story you tell yourself *Blindly Believing A story somebody else tells you *Becoming Impulsive.*Not Verifying A System Or Method Before you trade it.*Over Researching *Using Trading as a Spectator Sport *Jumping in before you think *Trading too Big *Grabbing Profits too soon.*Getting Careless *Being too Careful *Not adding to A Winning Trade.*Trading Heavier when losing *Forcing trades *Getting Trigger Happy *Gulping Profits too soon *Adding to A losing Trade.*Overtrading in terms of Frequency *Sticking with A Losing system *Sticking with A Broker that gives you bad Fills.*Not Making Trading A Priority*Worrying what others will think.*Trading with borrowed Money.*Trading with Money you need to live on*Holding Unrealistic Expectations.*Engaging in Negative and Destructive Self talk*Becoming Despondent about your trading results.*Wanting certainty before you trade.*Disregarding Probabilities*Fooling Yourself about your Trading.*Not keeping Proper Records*Not Acknowledging Mistakes.*Not Learning from Mistakes.*Repeating Mistakes*Engaging in Self Pity* Blaming Others *Getting Envious of other traders *Giving Up periodically *Resisting loss* Feeling shame for loss *Lying and Covering up results *Becoming pessimistic about the future of your trading * Being Unrealistic about your present trading &Tying self worth to trading * Bragging about Trading * Being Unduly Secretive about trading * Using trading to inflate your ego *Letting trading interfere with A full and Balanced life *Letting life interfere with A Full and Balanced trading *Using trading to avoid living *Doing anything Unethical regarding your trading *Doing what Doesn’t work *Not continuing to do what does work *Getting Reckless & Getting Overcautious * Letting others put your down Re your trading * Waiting to Respect yourself untill you succeed with trading*Being Unorganized in your efforts * Trading for the sake of trading *Letting Distractions take your attention away from trading * Not Specializing *Not executing with precision *Forgetting to cancel stops after a trade is off*Fighting Yourself *Fighting the Market *Fighting Your Methods *Making careless errors & Personifying the Market *Projecting your own feelings on the market.
-Other
Go over each of the Behaviors you have checked and scale them from 1 to 10 as to severity.Let 10 represent the most harmful to your trading.
The Best 10 things George Soros Ever Said About Trading
On September 16, 1992 – later dubbed “Black Wednesday” — the day the British government abandoned the European Exchange Rate Mechanism (ERM), and the pound was devalued by 20% George Soros made over $1.2 billion on his short sterling trade and was dubbed “The Man Who Broke the Bank of England.” His Quantum Hedge Fund has returned about 20 percent a year, on average, since 1969. These are amazing results, and some of the best ever achieved. Many of the years he was personally running it he had 30% returns and two years returned an amazing 100%.
Risk Management
“I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes.”
“My approach works not by making valid predictions but by allowing me to correct false ones.”
Trader Psychology
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”
“The markets are always on the side of exuberance or fear. It’s fear and greed. Right now greed has the better of it, which is rather nice (for investors) as long as it doesn’t get out of hand,” (more…)
Basic principles
Risk management- Plan your loss before planning your profit.
Diversification- Be bullish, be bearish, be involved in various groups/markets.
Proper Position Sizing- Trade small, trade safe.
Effective Trading Plan- Make sure your plan works, and/or makes money.
Cutting Losses Short- Enter a trade that offers a small loss.
Letting Winners Run- Don’t kill your winners.
Curbing Your Emotion- This is a bi product of trading small.
Long: My rules
Short: My emotion
Update: If you took any part of this post personal, don’t. You know I am not in the business of attacking, just trying to get a message across. If I were mad, I wouldn’t have addressed it at all.. When all else fails, “Fresh Tactics.”