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Bernard Baruch:Trading Legend

  
  Education
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Baruch was born in 1870 in South Carolina. He was a great student of finance, reading everything he could find about the subject, always trying to learn more. Baruch found out the education process takes time, especially when it comes to trading the stock market.

Early on, Baruch made many of the same mistakes that most traders make. Ultimately, after much dedication to learning proper trading principles, he amassed a huge fortune in the markets. Because of his intellectual reputation, he even held appointive positions in four presidential administrations, and served as an advisor to six different presidents.

In his book titled “My Own Story”, Baruch gives us some rules or guidelines on how to invest or speculate wisely.

1. Don’t speculate unless you can make it a full-time job.

2. Beware of barbers, beauticians, waiters-of anyone-bringing gifts of “inside” information or “tips”.

3. Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth.

4. Don’t try to buy at the bottom and sell at the top. This can’t be done-except by liars.

5. Learn how to take your losses quickly and cleanly. Don’t expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.

6. Don’t buy too many different securities. Better to have only a few investments which can be watched.

7. Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.

8. Study your tax position to know when you can sell to greatest advantage.

9. Always keep a good part of your capital in a cash reserve. Never invest all your funds.

10. Don’t try to be a jack of all investments. Stick to the field you know best.

10 Points For Traders

  
  Education
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  1. Don’t trade your opinions trade a carefully written trading plan that expresses a methodology with an edge.
  2. Don’t trade your emotions trade your quantified entry set ups.
  3. Stop exiting when your scared and exit with your trailing stop is hit.
  4. Only trade when the market environment gives your system a green light, go to cash when the market gives your system a red light.
  5. Stop trying to force trades, trade the signals not the noise. Wait for a reason to trade.
  6. In losing streaks trade smaller and smaller until you start winning again.
  7. Quit trying to make some great public “call” about a bottom and focus on making money.
  8. Sometimes it is not about making money it is about keeping what you have and playing a strong defense.
  9. The sloppy the price action the pickier you have to be with your entries.
  10. The more volatile the market the smaller you should be trading.

Learn from Jesse Livermore's personal life than from his trading techniques :Jesse Livermore Boy Plunger

  
Analysis, Education
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1929-crash

Jesse Livermore, the so called “Boy Plunger” and probably the greatest Wall Street Trader who ever lived, died $340,000 in debt.

Many look at his life to learn the secrets of his often extraordinary trading success. A better track for financial prosperity is to study and learn from mistakes he committed in his personal life.

The clues for true riches can be found there. The lessons from his personal failures are exponentially more important for modern investors than his exploits in the commodities and stock markets.

During the Stock Market Crash of 1929, Jesse Livermore made $100 million dollars betting that the stock market would plummet in spectacular fashion.

When he arrived home after another appalling day of market bloodletting in October of 1929, both his wife and mother-in-law met him at the door in tears. (more…)

Book Review: The Psychology of the Stock Market

  
  Education
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In the great game that is trading, the game never really changes.

New technology is introduced; new methodologies are dreamed up; new investment fads come and go. But the essentials of trading are the same now as they were generations ago.

There is a class of books that brings home this timelessness. Four of the best are The Money Game by Adam Smith; Devil Take the Hindmost by Edwin Chancellor; Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay; and of courseReminiscences of a Stock Operator by Edwin Lefevre (with the guidance of Jesse Livermore).

The oldest of the above is MacKay’s book, published in 1841. The Psychology of the Stock Market, by G.C. Selden, is another addition to the “timeless classics” list.

Though published in 1912, Selden’s book could have been published yesterday. This makes complete sense, as the main topic — human psychology — has not changed at all in the past century. (more…)

Do You want to Win or Lose at Trading?

  
  Education
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There are things that make you win in the stock market over the long term and then there are things that make you lose quickly even in the short term. The key to trading success is learning the difference quickly and doing what really works not what you emotions or opinions tell you to do.
If you want to win then you must create your own trading plan and follow it, if you want to lose just trade whatever you want whenever you want based on your own opinion.
If you want to win then you must control your risk carefully with only 1% or 2% of your capital at stake in every individual trade, if you want to lose then just trade huge position sizes, put all your chips on the table.
If you want to win plan your entries and exits before you enter a trade then follow them, if you want to lose ask for everyone’s opinion and just make decisions based on other people.
If you want to win cut your losses short and let your winners run, if you want to lose hold your losers and hope that they come back and sell your winners quickly to lock in gains.
If you want to win trade only the best high quality stocks in the market, if you want to lose trade the junk and hope for a miracle come back.
If you want to win then build complete confidence for your system through chart studies and back testing, if you want to lose trade with no idea of if what you are doing even works.
If you want to win go with the current trend of the market, if you want to lose fight the trend and trade against it.
If you want to win then go long the hottest stocks in a bull market, if you want to lose short the hottest stocks in a bull market.
Do what makes money not what you feel like doing.

39 Powerful Trading Tips by Ed Seykota That Will Rock Your Trading!

  
  Education
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Quotes by Ed Seykota

Technical analysis

1. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.

2. If I were buying, my point would be above the market. I try to identify a point at which I expect the market momentum to be strong in the direction of the trade, so as to reduce my probable risk.

3. If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical.

4. I set protective stops at the same time I enter a trade. I normally move these stops in to lock in a profit as the trend continues. Sometimes, I take profits when a market gets wild. This usually doesn’t get me out any better than waiting for my stops to close in, but it does cut down on the volatility of the portfolio, which helps calm my nerves. Losing a position is aggravating, whereas losing your nerve is devastating.

5. Before I enter a trade, I set stops at a point at which the chart sours. (more…)

Wisdom from William Eckhardt

  
  Education
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1. What is the state of the market?
2. What is the volatility of the market?
3. What is the equity being traded?
4. What is the system or the trading orientation?
5. What is the risk aversion of the trader or client?
Regardless of how you trade or invest … you better have those answers in advance of betting real money. 

The Ultimate Algorithmic Trading System Toolbox -George Pruitt :Book Review

  
Analysis, Education
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I am in the process of learning to code in Python and am, I must admit, no programming genius. So I was delighted to see that George Pruitt, best known for his book on TradeStation’s EasyLanguage (Building Winning Trading Systems with TradeStation) had written a new book that covered not only the TradeStation platform but also AmiBroker, Excel (with VBA), and Python. The Ultimate Algorithmic Trading System Toolbox: Using Today’s Technology to Help You Become a Better Trader (Wiley, 2016) is a how-to manual for the non-quant who wants to incorporate algorithms into his trading.
Pruitt’s focus in this book is not so much on system development per se as it is on popular programming tools for building and back testing technical trading systems. Yes, he has chapters on “Genetic Optimization, Walk Forward, and Monte Carlo Start Trade Analysis” and “An Introduction to Portfolio Maestro, Money Management, and Portfolio Analysis,” but what will most likely draw traders to Pruitt’s book is his extensive array of clearly explained sample code. (more…)

Facebook now 'worth $33 billion

  
Analysis, Education
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Facebook is now worth as much as $33.7 billion, after investors have paid up to $76 for a share in the company ahead of its much-hyped flotation on the stock market, according to a report.

The Financial Times has said that the implied valuation means that Facebook is now has a higher valuation than technology giants such as eBay and Yahoo!, which have capped market values of $30.1 billion and $18.3 billion respectively.

David Gelles, a reporter for The Financial Times wrote: “Common stock in Facebook is trading as high as $76 a share as investors scramble to get a piece of the company before it files for an initial public offering, which analysts say could be the biggest technology IPO since Google’s $1.67bn flotation in 2004.

“While Facebook and other successful Silicon Valley companies, such as Twitter, LinkedIn and Zynga, are delaying their IPOs because of perceived weak appetite on the public markets, some investors are not content to wait. They are acquiring stakes in technology companies while they are still private, hoping that their eventual IPOs will send share prices even higher.”

Facebook, which registered its 500 millionth member last month, is currently financed through a mixture of investment firms and venture capital companies. It is not yet know when the company will float, although there have been hints it will not be until 2011.

The company was the brainchild of Mark Zuckerberg while he was still studying at Harvard University and launched in February 2004. Zuckerberg remains the chief executive.

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