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The market is the calculator

  
  Education
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If you are attempting to reach 10 via the calculator, there are many and various ways of getting there:  5+5, 2+8, 15-5, 25 –15, or even  2 + 2 –1 –1 –2 –2 +3 +3 +3 + 3.  When it comes to making money in the market our calculator may want to make it to 10 much quicker than the market does and we may want to add 5 + 5 to get there but be prepared for the market to take its own sweet time adding things up.  If all that matters is getting to 10, then make sure the road you take is paved with minuses along with pluses along the way or all your money will be going to the 5508 (punch this number into your calculator and turn it upside down to see what it spells), which will make the employee a very unhappy and broke individual.

Stock trading is easy as long as we understand how to do the math.

30 Rules for Traders

  
  Education
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  • Buying a weak stock is like betting on a slow horse. It is retarded.
  • Stocks are only cheap if they are going higher after you buy them.
  • Never trust a person more than the market. People lie, the market does not.
  • Controlling losers is a must; let your winners run out of control.
  • Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
  • Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
  • Emotional traders want to give the disciplined their money.
  • Trends have counter trends to shake the weak hands out of the market.
  • The market is usually efficient and can not be beat. Exploit inefficiencies.
  • To beat the market, you must have an edge. (more…)

Stock Trading Rules

  
  Education
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istock Many of you have asked us  that you have  plan on or have written a book on the subject of trading. We haven’t yet, but plans are
 currently in the works for one. In organizing our notes recently, We have found a number of great trading rules that we have gathered
 along the way. Here are a few that we think are particularly helpful now:
 1. Be on the correct side of the supply and demand forces at work.
 2. Never upset the trading Gods by talking up your book. Hubris kills.
 3. Risk must be embraced, not feared.
 4. Reversals are always more lucrative than trends.
 5. Cycles tend to change before you can take advantage of them.
 6. Wishful thinking and emotional trading are a loser’s game.
 7. Never fall in love with a winning stock.

Right Time

  
  Education
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People don’t seem to grasp easily the fundamentals of stock trading. I have often said that to buy on a rising market is the most comfortable way of buying stocks. Now, the point is not so much to buy as cheap as possible or go short at top prices, but to buy or sell at the right time. When I am bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stock on a scale down, I buy on a scale up.—-REMINISCENCES OF A STOCK OPERATOR by Edwin LeFevre

The Timeless Wisdom Of Jesse Livermore

  
  Education
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Why is stock investing hard?

Take a step back to think, and you realize that stock trading is the intersection of many realms of knowledge. Business. The economy. Finance. Innovation and technology. Government policy. The market. And don’t forget psychology.

The more an investor knows about each of these fields, the more likely he or she will excel in the task of buying and selling stocks properly.

In the field of psychology alone, you have multiple topics to ponder. The psychology of the herd is important. So is the psychology of the self.

Jesse Livermore, whose life spanned the 19th and 20th centuries, didn’t get a master’s degree in macroeconomics or a Ph.D. in cognitive behavior. But his experience, hard work, failures and successes across many bull and bear cycles make him one of the most respected stock and futures traders of all time. (more…)

The Mind of the Greatest Trader-Livermore

  
  Education
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As revolutionary as this early-day stock guru’s approach to trading was for his time, in truth, Jesse’s stock trading “secrets” just came down to good, sound basics. His success stands as a testament to the fact that the further we wander away from trading breakout stocks and a simple, disciplined approach to trading stocks, the less success we’re inclined to have. Just how unconventional was Jesse Livermore? Take a look:

  • He believed in trading top quality stocks, not “weaker sister” stocks.
  • A stock hitting new highs was a signal of a stock’s strength to Livermore, and meant the stock had broken through its overhead supply of sellers. Today, we call this a “breakout stock”.
  • He was one of the first stock traders to realize that stocks tend to move in industry groups not in isolation.
  • Unlike today’s self-appointed stock pick gurus, Jesse Livermore was a humble student of the market, and never considered himself a master.

Livermore was ever conscious of the part one’s psychology played in achieving stock trading success, so he never spoke about what he was doing to anybody, and actually was known to ask people to keep their stock tips to themselves! He was so protective of his trading psychology that he would not even use the words “bullish” or “bearish,” thinking they would create an emotional mindset that he wanted to avoid. (more…)

4 Types of Trades

  
  Education
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4type

Stock trading consists of 4 major types of trades.

The range-bound trade: the stock is tied in a range and will remain there until there is a significant change in the supply/demand dynamics. For this trade you fade any move to the boundaries of the range with a tight stop a little bit below/above the range. If the range is broken, you will lose small amount. It is good for scalpers with shorter trading horizon.

The breakout trade: in order to break from a range, a stock needs to experience a major shift in supply/demand. A dramatic occurrence. News or expectation of news. The news doesn’t have to be connected with the individual stock. It might be something that impacts the whole industry or market. Sudden change in participants’ confidence. Not every breakout will be caused by clear news. Often it will happen at no news at all. In any case, volume should be your tell how genuine the move is. Buy several cents above the range with a stop several cents into the range. (more…)

WILLIAM O'NEIL'S STOCK TRADING COMMANDMENTS

  
  Education
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Last Night ,Completed reading  Trade Like An O’Neil Disciple by Gil Morales and Dr. Chris Kacher. One of the chapters, with a wealth of information, is “Our Bill of Commandments” wherein the authors discuss William O’Neil’s (think IBD) stock trading commandments. I thought it would be worthwhile to list them here.

1.  Never Get Carried Away With Yourself.  “The basic idea is that one should remain impervious to the illusions and trappings of wealth, as they often lead one to become carried away to the point where excess of one sort or another ultimately leads to one’s demise” (265).

2.  Never Operate From a Position of Fear.  “If you are fearful in the markets, either as a result of taking a recent loss or some other mistake, or even as a result of being nervous about the level of risk you are taking, then you are putting yourself in the position of making and unclear and hence incorrect decision” (265).

3.  You Learn More From Your Enemies Than You Do From Your Friends.  Make sure you take the criticism’s of others and use them to your advantage by recognizing that the more others criticize the more you value your own beliefs, trading or otherwise.

4.  Never Stop Learning and Improving. Always focus your mistakes and searching for ways to correct them.  That way you will not be as tempted to make the same mistake again. 

5.  Never Talk About Your Stocks.  This is purely an ego taming exercise.  While I personally believe it is ok to discuss technical analysis and stocks that may be on a watchlist there is really no benefit in bragging about success and hiding your failures.  It is ok to be wrong. 

6.  Don’t Get Giddy at the Top.  Bigger charts (such as the WEEKLY) are the best barameters for giddiness.  By watching over extended big charts, the trader’s emotions can be better managed thereby avoiding jumping on the caboose as the train is set to take a break from its recent trip.

7.  Use Weekly Charts First, Daily Second, and Ignore Intra-day Charts.  No need to focus on the noise at the expense of listening to the still, small voice of Mr Market. 

8.  Find The Big Stock.  Look for stocks under accumulation and then begin buying in preparation for distribution.

9.  Be Careful Who You Get Into Bed With.  Although not a trading rule per se, keeping good, solid company outside the charts, can help you be the best trader inside the charts.  “Trust and integrity between two people are the most important variables in life and in business” (269).

10.  Always Maintain Insane Focus. Focus “is what makes life worth living, and by relentlessly pursuing our passions we attain the state of insane focus that in turn drives high levels of success” (269).

No matter what you think of O’Neil and his trading strategy, one thing is for certain his commandments are applicable to all of us both in and outside the charts. 

101% ,Buy this Book too …..Read Trading/Pyschology Books it will be good for u !!

Stock Trading Volume

  
  Education
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Q: Are significant changes in trading volume still important in your daily scans?

A: Yes, they’re still important and relevant in my view.

While there is both debate and frustration among traders regarding how trading volume is being tracked and reported within the major indexes (rendering some traditional indicators and metrics based on such information less helpful), relative comparative trading volume is still relevant when screening for short-term stock setups.

Respect the Trend

  
  Education
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respect-21One of my favorite trading tales involves a very wise, veteran trader who, when asked his thoughts on the market, would simply respond by saying “It’s a bull market,” or “It’s a bear market.” Younger traders simply seeking out a hot tip from the seasoned pro would often leave discouraged – or even annoyed, believing they were being fed a line. JL himself didn’t understand until years later the wisdom that was actually being dispensed with those words: The veteran was simply relaying the path of least resistance, or the trend for the general market, and therefore giving the trader an incredible edge in determining one of the many variables that makes up stock trading. (more…)

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