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5 Minutes of Daily Conditioning

  
  Education
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Deciding to be a profitable financial trader is the first step in becoming one. Trite you say? Not really. Missing this one step or doing it out of order xplains why 90% of brokerage accounts go to zero within the first year, many doing so in the first 4 months!

In addition to arbitrarily deciding to be a profitable financial trader, a more powerful and lasting way is to use psychological conditioning on yourself so that you CONSISTENTLY decide that you are a profitable trader Here’s my interpretation of the method for doing this that I learned from the famous success guru I alluded to in my comments two blogs back.

First, write out the sentence below on a piece of paper.

“FROM THIS MOMENT FORWARD, I AM A PROFITABLE TRADER”.

Second, consider the pain you have experienced before because you have not consistently thought of yourself as a profitable trader. Imagine experiencing that again in the present and future. Do this for 30 seconds. Notice how you feel as you do that. (more…)

Quantitative Strategies for Achieving Alpha by Richard Tortoriello -Book Review

  
  Education
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In this book Richard Tortoriello sets out find empirical drivers for stock market returns. This is a new book published last month. The author tests 1200 strategies on stock above 500 million valuation to determine the major fundamental and market based drivers for future stock market returns.After such analysis he presents strategies that consistently outperform the market.

The author tests 7 basic categories of stocks factors:
  1. Profitability
  2. Valuation
  3. Cash flow
  4. Growth
  5. Capital allocation
  6. Price momentum
  7. Red Flags ( risk factors)
 
Detailed quantitative tests  for each of the factors are presented in the book. As the author works for S&P, he has access to the best database on stocks and he presents his findings for multiple factors within each of the above seven categories. The testing shows that the top single factor strategy for achieving excess return is price momentum calculated using 28/16 relative strength. The best strategy using two combined factor for excess return is price momentum plus nearness 52 week high. 
 
This book unlike other quant books is easy to understand and well presented. The biggest advantage of this book is it will give you building blocks to build your trading strategy around things that empirically work in the market. Knowing what works and why it works can help you build better trading models.

Sun TZU and Trading

  
  Education
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artimg48 

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…)

Anirudh Sethi's Lessons From 2008 : Part – I

  
  Education
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 aslessons2008

Last week …Many Traders had asked me :Dear Anirudh Sethi… “What would you say is the most important thing you’ve learned about investing and/or trading in 2008?”
Here are some of the replies ….I had given (more…)

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