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Ego in Trading -Anirudh Sethi

There is something about yourself that you may really not know. Something that you will deny even exists in you until it’s too late to do anything about it. It’s among the reason you rise up in the morning, the sole reason you suffer the shitty boss, the sweat, the blood and also the tears. This is because you would like people to understand how attractive, good, generous, wild, funny and clever you actually are. “Fear or revere me, but please think I’m special”. We share an addiction. We’re approval junkies. We’re all in it for the pat on the back and the gifts. The “hip, hip, hoo-rah.” check out the clever boy with the badge, polishing his trophy.

 

Because we are all human, we do not want to accept that we are wrong about anything, including trades. The ego wants to uphold a perfect version of ourselves allows nothing more but successes not failures. Many traders collectively lose many dollars trying to guard the ego’s version of reality. Our goal should be to trade without ego.

 

“The greatest enemy will hide in the last place you’d ever look.” Caesar 75 BC

 

You must recognize what’s keeping you from taking your trading to another level. The majority of the time, it’s your ego. How many times have you made a great trade and walked away with your chest puffed out thinking ‘I am the greatest trader in the world?’

 

“The only way to get smarter is by playing a smarter opponent.” Fundamentals of Chess 1883

 

The market always reminds you the person in charge. Try to always use same way to approach each trade, ditch each previous trade when entering a current one. Reset your mind and expect to lose money on each trade, and this could assist you recover from the super-trader ego after  a pleasant winning trade! Ego must be left out of your trading. Check your ego at the door, have a stop loss, and stick with your plan.

 

The ego may be a person’s sense of self-esteem or self-importance. The ego is a mental construct that can be both on a conscious and unconscious level. An ego is that the self-concept that an individual tries to guard and keep safe from pain and destruction. A trader has got to trade the maths and their own trading system and abandoning signals and their trading plan in favor of their own ego may result in stubbornness, self-delusion, and big losses.

  1. Most market predictions are ego based. A trader wants to be ready to say they called a top or a bottom or had an excellent stock pick. Signal and system-based trading may be a path that removes the necessity to predict you simply
  2. Stubbornness is an emotion that flows from the ego as it does not want to be proven wrong. Many times, this results in letting a losing trade still run against a trader. Egos do get trouble taking stop losses because they hate to be

 

  1. Egos lock into being bearish or bullish and let their opinions lead their trading. Following the particular price trend creates better odds of success than having an opinion on what should happen
  2. You should not let trading consume your entire life. The markets should be just one of several belongings you neutralize life. A diversified life outside the markets with friends, families, hobbies, learning new things, and staying healthy will assist you keep perspective during losing streaks and draw downs in trading
  3. A profit and loss statement can not define your self worth. Your profits are more of a mirrored image of whether the worth action is conducive to your method currently not whether you’re an honest trader or not. Your egos have got to be determined by whether or not you followed your trading system with discipline, consistency, and risk management.

 

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Should you sell a currency if there is a virus breakout there?

What’s the pandemic trade

What's the pandemic trade
Sooner or later, there will be another country with a coronavirus breakout. Right now authorities are scrambling in South Korea, Iran and Italy.
Given that it started in China, two of those three countries were not at all where you would have expected it to land next. Scarier is that Indonesia — which is a top destination for Chinese travelers — still has zero confirmed cases. US diplomats are increasingly critical of the testing and preparations in the country.
So what if the next big outbreak is in Indonesia? Or what if it’s Australia? Or Canada?
If that happens, I expect the market to sell those currencies. Market reactions are imperfect and that’s an understandable response.
At the same time, there is a certain point where the market comes to realize that the virus is unstoppable. I don’t know if that is 5 countries or 25.
What will matter first is how quickly the case count rises. If it rises 100x like it has in Italy this week, that’s a clear sign of local transmission but the market will react more-quickly and the news comes in dribs-and-drabs.
So you can’t sell on the first case and it’s always tough to get immediate details of where people had recently visited. So it’s a situation where you have to wait for the numbers to rise, but how many cases do you need? There’s no easy answer.
A lot of trades play out like that around the virus because the information is so sketchy. If you told me there was a breakout in Indonesia, I’d sell the rupiah but the reality is that the information is lumpy.
I’d argue that it’s a better idea to focus on the global impacts and reactions than try to pin it down place-by-place.

US, EU and Japan seek tougher WTO rules on industrial subsidies

China targeted

Yesterday the US rolled out the red carpet for the phase one signing ceremony by removing the ‘currency manipulator’ designation but today they’ve joined up with the EU and Japan to seek tougher WTO rules. They reached a deal to expand the WTO’s list of illegal aid.
The trio also discussed rules to prevent tech transfers.

Americas largest underground coal miner is headed for bankruptcy

Murray Energy didn’t make interest payments due yesterday

Murray Energy didn't make interest payments due yesterday
Coal isn’t back.
Murray Energy was granted extensions to renegotiate debt deals but they appear to have come up empty. Bloomberg reports that the company failed to make an interest payment due yesterday.
The failure of this company highlights the limited power of even the President of the United States in battling against economic forces. Many coal companies have already filed for bankruptcy, although none as big as Murray. The company employs nearly 7000 people and the largest underground coal miner in the United States.

Heads up: Fed chair Powell to speak again later today

In case you missed out on his remarks from yesterday:

Powell

 

For today, he is scheduled to speak at around 1430 GMT (agenda says it is at 1500 GMT though) as he participates in a roundtable session in a Fed Listens event in Missouri.
The event is hosted by the Kansas City Fed so Powell will be joined by Esther George in the discussion, where we will be hearing a range of economic issues, such as labor market conditions, local banking, community development challenges and other topics.
In any case, I wouldn’t expect Powell to deviate from his stance yesterday as he continues to keep all options on the table ahead of the next Fed meeting.
The FOMC meeting minutes release later today as well as US CPI data and US-China trade talks later this week will be more impactful for the dollar and risk in my view.

Trump says he would love to reduce capital gains taxes

Tough to imagine he could do it

Now that Democrats have the House it’s going to be tough to do anything substantial, or anything Republicans in the Senate would support. There’s some talk that the White House will try to index capital gains to inflation via executive order or technical changes but it’s tough to believe that would fly. In any case, it’s not going to give a jolt to the economy and awaken sluggish business investment.