Archives of “ups and downs” tag

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Tomorrow is Too Late

  
  Education
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tomorrow2Trading has many ups and downs and can easily cause us to feel defeated.

However, defeat can only be disastrous if we classify it as disastrous.

Losses, defeats, failures, etc. have been a part of history for every person who has reached high levels of success. The difference with the successful people is that they analyze the situation immediately. Those that tend to fade away are those that wait until tomorrow or maybe never to review and discover why the results were not what they expected.

To be successful we must accept every result as a part of our growth and to apply those findings today. Don’t wait until tomorrow, because tomorrow may be too late.

Defining Risk

  
  Education
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Defining Risk“Take a chance! All life is a chance. The man who goes the furthest is generally the one who is willing to do and dare. The “sure thing” boat never gets far from shore.”
Dale Carnegie (1888 – 1955)

In 1998 Economics Professor and Nobel Prize winner Paul Samuelson (1915 – ) noted that:

“Many people now believe that if they simply hold stocks long enough they will not, lose money for statistics have shown that since 1926 the U.S. equity market has not suffered a loss in any given 15 year.” (more…)

DISCIPLINE & PASSION

  
  Education
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Discipline – Majority of traders are not disciplined in their approach, else they would not be failing. These failed traders simply hate to hear the word Discipline! As Jack Schwager points out in his book, ‘The New Market Wizards’, “Discipline was probably the most frequent word used by the exceptional traders that I interviewed. Often it was mentioned in an almost apologetic tone: ‘I know you’ve heard this a million times before, but believe me, it’s really important’.”
Discipline allows you to more effectively plan your work (trades) and work (trade) your plan. Discipline – “Habit of Obedience” – yes the keyword being habit, i.e. have a Trading Plan and make a habit of following it. The golden rule should be No Signal – No Trade.
Passion – We may spend a third of our life working, so you deserve to feel fulfilled in what you do, you do it because you love to do it! – Yes the monetary rewards are the by-product of your success in doing things you love to do.
How can you be naturally successful at something, continue to fine-tune your trading skills, seek the services of a mentor, and stomach the ups and downs of the business and if you don’t know WHY you’re doing it? As Michael Jordan once said, “If you have a love for the game, your talent will eventually catch up to you.” So if you do not have the love for trading, will you succeed?
To sum-up this Mental skill set PAIR (Discipline / Passion): You must be disciplined AND remain emotionally detached from the market.

Tomorrow is Too Late

  
  Education
#  #  #

Trading has many ups and downs and can easily cause us to feel defeated.

However, defeat can only be disastrous if we classify it as disastrous.

Losses, defeats, failures, etc. have been a part of history for every person who has reached high levels of success. The difference with the successful people is that they analyze the situation immediately. Those that tend to fade away are those that wait until tomorrow or maybe never to review and discover why the results were not what they expected.

To be successful we must accept every result as a part of our growth and to apply those findings today. Don’t wait until tomorrow, because tomorrow may be too late.

TRADING MANTRA'S

  
  Education
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trading-mantrasEven the best traders in the market have trading sessions that are less than optimal.  Human nature dictates that we make mistakes, and trading the stock market is no exception.  Subsequently, there is always room for improvement, whether you are a novice trader or a seasoned veteran. 

  1. Stick to Your Guns – Don’t try to run from the market.  The only way to boost trading profits is to stay in the game and keep trading.  Running from the trades and the action will keep you out of the market, whether it is hot or cold.  Sticking to your trading plan and enacting trading discipline are the keys to producing profits.

 

  1. Set Stop Losses and Take Profits – “Set and forget” trading is generally profitable.  When you place each trade, remember to place your exit and stop loss, and then let the market be your guide.  Have a preset limit of how much you’re willing to win and how much you can lose.  Technical analysis will tell you the best price for selling (near resistance) and the best place for buying (near support).  Support and resistance points are the best places to put limit orders. (more…)

An Investment Poem

  
  Education
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The newfound opportunity arises softly at first

Like pearl shaped dew drops on a tea leaf

Quite unexpected but fast entranced and immersed

Her presence over the former solitude brings relief

More precious than any amount of money or power

More beautiful than the most stunning of jewels

You cannot appreciate the sweet without the sour

The kind of perfect pattern that makes investors drool

Finding shares to short are most difficult to borrow

But who would bet against an investment with so much potential?

Elation is now the norm starting yesterday, today and tomorrow

The biggest challenge lay in exercising prudential

Potentially an addicted lost cause am I

An investor who has witnessed too many ups and downs

Is it possible to stay grounded or is my destiny the sky?

Disciplined I promise to be, carefully soaking in the sights and sounds

Because true greatness only comes around every so often

Where your hands can’t help but shake and you feel it in your gut

The time is now, the place is here — this is Zen

As nature intended, this squirrel has found his nut

‘Alexander Elder Quotes’

  
  Education
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Trading is not all about just stock picking, it is not just about a winning system. Yes, first you have to understand how to trade and put the odds in your favor of winning, but that is not enough. You must also add in risk management so when you lose ten times in a row your trading career and account does not end there. You also must have  faith in your system and method to be able to keep trading it even when you are losing, and you will have losing months, maybe even a losing year, can you keep going to be around for the big wins?

One dimensional traders just pick stocks, if they are right they win for a while, but eventually they do not stop out when they are wrong and they blow up their account. They also eventually get emotionally frustrated from wild equity swings  and they eventually quit and blame the market.

Two dimensional traders have a good system and cut their losses but have trouble with self confidence and belief in their system. They tend to blame themselves when their accounts draw down 10% to 20% and have trouble understanding that it is just part of the game. The market environment is determining wins and losses not the trader, they don’t  understand this. All they can do is take their entries and exits as they come and let the market do what it does. They have not separated themselves from their trading.

The three dimensional trader takes entries and exits based on his methodology that he believes in, he manages risk per trade carefully and never loses more than 1% t0 2% of his capital on any one trade. The 3D trader’s self worth and confidence is not tied up in any one trade, or monthly performance he understands this is a long term process with ups and downs. Wins and losses do not change his mindset. It is just a business, stocks are just inventory, the market gives and the market takes away, and he just takes what it is giving.

Is Your Self-Esteem Tied To Your Account Equity?

  
  Education
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Does your self-esteem rise and fall with your account equity? If so, your probably in for some difficult times ahead with you’re trading. For some traders, a trade is more than a trade, it can represent how successful they are as a person, how much status they feel, etc.  When your self-concept is closely tied to your trading outcomes the result is a yo-yo effect in terms of your self-esteem and your internal state.  And our internal state has a lot to do with how well we trade.

Trading already involves a lot of uncertainty, and tying one’s sense of self-worth to the ups and downs of trading is unnecessarily adding emotional volatility to the picture and is usually not a good idea.

Most traders need to work on being more resilient in the face of disappointment. Trading will always involve disappointments, its part of the territory.  A delicate balance between being fully engaged in the trade with a ‘watchful curiosity’ and without being overly attached to the outcome, is how many successful traders describe their internal state.

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