1. Need to internalize lots of trading simulation of specific set-ups in real-time to trade effortlessly
2. Need to trust money management system to weather +10 losses in a row
3. Tuff to internalize that its the 5-6 huge monthly runners that is the big pay-off days
4. Must master +3 trade set-ups to make money consistently month to month.
5. It takes considerable time to mathematically think and act like a trader
6. Trading is a performance skill which requires mastery of every element of trading
7. It requires time capital and considerable effort to achieve the experience to make it effortless and automatic (more…)
“The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear… The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.”
– Reminiscences of a Stock Operator
“Hope is not a strategy.”
– Rigo Durazo
“There is no worse course in leadership than to hold out false hopes soon to be swept away.”
– Winston Churchill
“It is not enough to rely on luck or hope to carry us past the weak parts of our game. These parts must be attended to. The system must be whole and complete.”
– Zen and the Art of Poker (more…)
Q: Doctor, I’ve heard that cardiovascular exercise can prolong life. Is this true?
A: Your heart only good for so many beats, and that it…don’t waste on exercise. Everything wear out eventually. Speeding up heart not make you live longer; it like saying you extend life of car by driving faster.
Want to live longer? Take nap.
Q: Should I cut down on meat and eat more fruits and vegetables?
A: You must grasp logistical efficiency. What does cow eat? Hay and corn. And what are these? Vegetables. So steak is nothing more than efficient mechanism of livering vegetables to your system. Need grain? Eat chicken. Beef also good source of field grass (green leafy vegetable). And pork chop can give you 100% of recommended daily allowance of vegetable product.
Q: Should I reduce my alcohol intake?
A: No, not at all. Wine made from fruit. Brandy is distilled wine, that mean they take water out of fruity bit so you get even more of goodness that way. Beer also made of grain. Bottom up! (more…)
1. Come to the market with a trading plan. Most traders don’t have a plan built around high odds trade set ups. Thus, they trade random patterns.
2. Put in the necessary work. You can’t be like most traders and just show up to the markets expecting to make big money in a short period of time. Don’t be like most traders; become contrarian. It takes hard work and study. Prepare yourself to trade well.
3. Enter on reactions, not on breakouts. Most traders see the market begin to move and then jump in. These dog-piling events are made-to-order for professional traders to act. They unload when the herd is buying, and stock up when it is selling. Adopt a professional’s attitude and look to sell into strength and buy into weakness.
4. Work on the mental side of trading, not just the technical side. Understanding how to read the chart is vital, of course. But it is not enough. Once the technical side is learned, trading becomes 100% psychological. Most traders think psychology is unimportant until it is too late. Be contrarian and put time in to learning the mental skills needed to trade well.
5. Keep learning. Not just about the markets but about your own performance, too. Most traders take a losing trade and sweep it under the rug. They try to forget about it. Likewise, they don’t bother to study their winning trades. They have little idea of why one trade worked and another didn’t. Be contrarian: review your trading and keep a journal.
Becoming contrari (more…)
You can avoid the emotionalism, the second guessing, the wondering, the agonizing, if you have a sound trading plan (including price objectives, entry points, exit points, risk-reward ratios, stops, information about historical price levels, seasonal influences, government reports, prices of related markets, chart analysis, etc.) and follow it. Most traders don’t want to bother, they like to ‘wing it.’ Perhaps they think a plan might take the fun out of it for them. If you’re like that and trade futures for the fun of it, fine. If you’re trying to make money without a plan-forget it. Trading a sound, smart plan is the answer to cutting your losses short and letting your profits run.
Do not overstay a good market. If you do, you are bound to overstay a bad one also.
Take your lumps, just be sure they are little lumps. Very successful traders generally have more losing trades than winning trades. They don’t have any hang-ups about admitting they’re wrong, and have the ability to close out losing positions quickly.
Program your mind to accept many small losses. Program your mind to ‘sit still’ for a few large gains.
Recognize that fear, greed. ignorance, generosity, stupidity, impatience. self-delusion, etc., can cost you a lot more money than the market(s) going against you, and that there is no fundamental method to recognize these factors.
Consider this excerpt:
Benjamin Graham, who believed in buying wonderful companies at a fair price rather than a fair company at a wonderful price, defines an investor as “an individual whose investment provides two quantitative qualities – safety of principal and an adequate rate of return.” There are many intricacies within business ownership investments, but does everyone in the stock market consider these particulars when investing in business ownership? Of course not, because not everybody in the stock market is an investor. Individuals who desire to become investors must enter the arena with goals that have a long-term investment horizon. Warren Buffett, a global financial market guru and head of Berkshire-Hathaway, puts it best when he says: “It’s bad to go to bed at night thinking about the price of a stock. We think about the value of a company and the company results; the stock market is there to serve you, not instruct you.”Hence, an investor does not buy a price and will not be affected by the ups and downs of the market. A sound investor buys well-managed businesses, with strong earnings growth and significant barriers to entry that will provide long-term security. A ‘purchaser of price’ is a speculator; a ‘purchaser of solid businesses’ with sound fundamentals is an investor.Mark Croskery
Ten Times When A Trader Should do Nothing
- When you are confused and don’t know what to do, do nothing.
- There are no set ups on your watch list, then don’t trade.
- You are a trend trader and there is no trend to trade.
- The market is extremely volatile due to headline risk.
- You want to make an option trade but the options are illiquid with a huge bid ask spread.
- If you are trying to trade supply and demand but the government keeps interfering with your market, pick a different market.
- Your stock reports earnings the next day and you expect a powerful move but it could easily go either way, wait until after earnings to trade.
- You are a momentum trader but their is not momentum, then wait.
- You play the long side only and the market is in a correction or a bear market, wait for a new trend to the upside.
- If you are not at your best mentally and emotionally then don’t trade until you are.