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30 One Liner For Traders -Must Read

  
  Education
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1. Buying a weak stock is like betting on a slow horse. It is retarded.

2. Stocks are only cheap if they are going higher after you buy them

 3. Never trust a person more than the market. People lie, the market does not.

4. Controlling losers is a must; let your winners run out of control.

5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.

6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.

7. Emotional traders want to give the disciplined their money.

8. Trends have counter trends to shake the weak hands out of the market

. 9. The market is usually efficient and can not be beat. Exploit inefficiencies.

10. To beat the market, you must have an edge. (more…)

Traders Should Control These 14 Emotions

  
  Education
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14-POINTS
 

Anger- Revenge trading

Fear- Inability to take an entry or hold a winner in a trend.

Disgust- Can lead to loss of a traders confidence.

Happiness- Surprisingly can lead to trading too big and taking on too many positions.

Sadness- Can lead to having difficulty taking the next trade entry or cutting a loss.

Surprise- Can many times lead to making decisions based on emotions and abandoning a trading plan. (more…)

What enables a trader to exit every trade the same way, with confidence?

  
  Education
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  • Preparation:  If you put yourself in the best possible position and you lose money at least you spent that money wisely.  Good things happen to those that are prepared because 90% of people do not know how to do it or are unwilling.  eye-4798
  • Purpose: Acting with purpose.  You prepared, you knew the risks, you executed the way you wanted to execute.  In cold blooded evaluation you would do it the same with the information you had at the time.
  • Protection:  Losing the invisible money is how I have seen many people blow up.  Invisible money is not locking in profits or losing more than your plan allowed.  If you lose what you intended to risk you own the trade, if you lose more the trade owns you.

Metaphors and Similes

  
  Education
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Similes and metaphors play an important role in both the internal thought-process of a day trader as well as in communication between two traders.  To describe the emotional reactions coupled to the movement of a stock in likeness to a rollercoaster, or to compare averaging down in hopes of breaking even to digging one’s self out of a hole is to use simile to quickly illustrate a particular situation as clearly and succinctly as possible.  Every trader uses these analogies, each having his own favorites, and they are used to add structure to an environment that often lacks useful tools for explaining particular occurrences. 

Sports metaphors also play an important role in quickly passing information to another trader with a small chance for confusion.  Traders use base-hit as a metaphor to describe a solid but ultimately small-scale win in the market, and home run for when a trade is “out of the park”.  

Ultimately, metaphors and similes can be used by a trader to keep his mind in the right place, and maintain emotional control.  By metaphorically comparing trading to baseball or basketball, the Michael Jordan truism about never missing a shot he didn’t take or Babe Ruth’s statistical record for strikeouts helps the trader keep in the back of his mind the inalienable reality that he won’t get a hit every time he swings the bat.  (more…)

7 Things Each Trader Has To Accept

  
  Education
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If you truly are serious about being a trader then there are seven things that you will have to accept.

  1. You will have to accept that over the long term at best only 60% of your trades will be winners. It will be much less with some strategies.

  2. Accept that the key to being a successful trader is having big wins and small losses, not big bets paying off. Big bets can lead quickly to you being out of the game after a string of losses.

  3. Accept that the best traders are also the best risk managers, even the best traders do not have crystal balls so they ALWAYS manage their capital at risk on EVERY trade.

  4. If you want to be a better trader then you need to accept that trading smaller and risking less is a key to your success. Risking 1% to 2% of your capital on any single trade is the first step to winning at trading. Use stops and position sizing to limit your losses and get out when your losses grow to these levels.

  5. You must accept that you will have 10 trading losses in a row a few times each year. The question is what your account will look like when they happen.

  6. You have to accept that you will be wrong, a lot.  The sooner you accept you are wrong and change your mind the better off you will be.

  7. If you really want to be a trader then you are going to have to accept the fact that trading is not easy money. It is a profession like any other and requires much work and effort and even years to become proficient. Expect to work for free and pay tuition to the markets through losses until you learn to trade consistently and profitably.

(more…)

15 Points For Traders

  
  Education
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1. Don’t be a tradeaholic
Agreed
2. You trade to make money – not for fun, games, or to escape boredom
Definitely
3. Never add to a bad trade
If you have a specific strategy which includes adding to a trade which has gone against you, that’s one thing. Just “averaging down” is usually a bad play.
4. Once you have a profit on a trade, never let it turn into a loss
This can be a really good plan for psychology purposes, but it may or may not be appropriate for the type of strategy/system you employ.
5. No hoping, no wishing, no would’ve, no opinions, no should’ve
It’s hard not to second-guess, and reviewing thinking after the fact is part of the learning process, but never do it in trade.
6. Don’t be a one way trader – be flexible, opportunities on both sides
More opportunities doesn’t necessarily mean better trading. Some systems, markets, and/or traders are just better one-way only.
7. Know your risk on each trade. Trade with stops to limit losses
Definitely yes on the first part. The second part is up for debate in some ways.
8. Look for 3-1 profit objective trade
Totally disagree. This can’t be taken in isolation. You can have fantastic results with a smaller R/R ratio. It depends on your system’s or method’s win %.
9. When initiating a trade, always get your price (use a limit order)
Depends on your system. (more…)

Jackpot of Life : 1 "Lucky" Options Trader Made A 60,000% Return Over The Weekend

  
Analysis, Education
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With Keurig Green Mountain trading around $51 late on Friday, one “hopeful” options trader decided it was an opportune time to buy 99 $60 call options (controlling 9,900 shares or around $594,000 worth at the strike) which unless something miraculous happened would expire entirely worthless within a week. Well… a miracle happened over the weekend, CMGR was bought at a 78% premium and that “lucky” options trader cashed in his lottery ticket with a 60,000% return.

With a strike requiring a 20% gain in less than 7 days… seems like a very lucky last-minute winning buyer of this lottery ticket.

10 Type of Traders.Which are You ?

  
  Education
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In the markets there are many different types of traders and many motivations that drive them.  Everyone has heard of  different types of traders based on their trading method: Swing Traders, Day Traders, Momentum Traders, etc. But what about different types of traders based on their psychology, their very purpose?  Some trade for fun and excitement, others trade purely for ego. Other love the game and still others are in it only to make money. In the greatest game on earth it is surprising that many traders have different motivations, in reality the only correct motivation is to make money, that should be the real goal of any trader. Here are a list of ten types of traders I have observed on social media. We have all likely been more than one of these types at some time or another while trading. But we need to focus like a laser on the only real reason we should be trading: to make money and once we have made it, to keep it.

  1. Greedy Traders: They trade too big and risk too much because their only goal is the easy money.
  2. New Traders: They have no idea how the markets work so their only goal is knowledge.
  3. Arrogant Traders: Their only goal is to prove they are right and satisfy their fragile egos.
  4. Trend Traders: Their only goal is to ride a trend and make money.
  5. Scared Traders: Their only goal is to not lose their capital.
  6. Perma-Bull Traders: Their only goal is to go long stocks.
  7. Perma-Bear Traders: Their only goal is to short stocks.
  8. Prophet Traders: Their only goal is to rightly predict market movement then let everyone know they did.
  9. Paper Traders: They love the market and study more than anyone but never quite make the plunge into real trading.
  10. Rich Traders: Their only goal is to consistently make money and grow their capital over the long term.

Which are you?

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