- Trading is actually a physical game. Playing the “sport” of trading should be handled as if you are the quarterback of an American football team.
- Rest: Being well-rested is an edge.
- Diet: When one really concentrates, the body and brain use an inordinate amount of energy. Eating properly keeps your energy up and adds to that physical-psychological edge.
- Exercise: Exercise gives us a physical boost that makes us feel more optimistic, and that counts as psychological capital.
- The body counts essentially as much as your intellect. If the body is feeling the static of tired or drained, the feelings and emotions of risk-management and people reading can’t properly communicate their data.
Archives of “video games” tag
rssPsychological Risk Management
- If you’re out of balance, you’re going to make bad decisions, and trading the market is a decision game
- If you’re overtrading, you’re out of balance
- If you’re overcommited, you’re out of balance.
- If your dollar risk is too high, you’re out of balance.
- If you’re hung over, you’re out of balance.
- If you’re sick, you’re out of balance.
- If you need the money, you’re out of balance.
- If you make too much money, you’re out of balance.
- You’ve got to take time off. You can’t trade every day.
- Pay more attention when you account size gets bigger
- I’ve noticed over the years that when my account has been small for whatever reason, I have been really careful with it. I watch it like a hawk. When my account gets rich, I tend to fall into a habit of neglect. I’m making money. I have profits, and I’m more comfortable. I don’t keep as close an eye on it. That’s very foolish.
- Take profits out of your account
- You should spend some profits rather than letting the money stay in your account indefinitely. That’s been important to me over the years. I withdraw money from time to time and take a vacation or buy a new car. From a behaviorist’s standpoint, it gives a sense of reward. It provides conscious and subconscious motivation.
Germany forecasts worst recession since at least 1950
The German government expects the fallout from the virus outbreak to send the economy into its worst recession since the aftermath of WWII
- Forecasts GDP to fall by 6.3% in 2020
- Forecasts GDP to grow by 5.2% in 2021
The above is the latest projections by the economy ministry, and that shouldn’t come as much of a surprise given the economic hit across the globe – not just in Germany.
This hinges on some kind of U-shaped or V-shaped recovery but the issue is we’re not even going to be sure how the next quarter is going to look like.
The focus right now is on easing restrictions but what happens if there is a secondary outbreak or the infection rate starts rising again? The latest report from Germany is that the virus’ reproduction rate is back up to 0.96 from 0.70 as of Monday.
If that goes back above 1.00, will the government impose another round of restrictions? What happens if this continues all the way into Q3 or even Q4?
It is very much play by ear at this point and the same applies to every country in the world.
Michael Bloomberg is preparing to enter the Democratic presidential race
Billionaire could challenge for the Presidency
The New York Times reports that billionaire Michael Bloomberg is preparing to enter the Democratic primary.
The founder of Bloomberg Finance LP expected to file paperwork this week designating himself as a candidate in at least one state with an early filing deadline, people briefed on Bloomberg’s plans told the newspaper.
Although he is filing for an early primary in Alabama, an adivsor told the NYT that he’s still unsure about entering the race.
Howard Wolfson, a close adviser to Mr. Bloomberg, saidonThursday that the former mayor viewed President Trump as an “unprecedented threat to our nation,” and noted Mr. Bloomberg’s heavy spending in the 2018 midterm elections and this week’s off-year races in Virginia. Mr. Bloomberg, he said, has grown uneasy about the existing trajectory of the Democratic primary.
GBPJPY is the biggest mover today. Soars toward 2019 midpoint/200 day MA
After an early ping pong pause at target levels, the pair shot higher.
In a post yesterday (on other GBP pairs technicals) I outlined levels of importance for the pair after the sharp moves higher. Below is the chart from that post.
At the end of yesterday and into the Asian session, the price of the pair ping-ponged between the 134.60 level above and the 133.86-99 level below. The price based one last time at the support area (yellow area), broke above the 134.60 level and did not look back. This is what that looked like:
What now?
Taking a broader look at the daily chart, the pair has moved above swing levels and currently is testing the 50% retracement of the 2019 trading range at the 137.702 level. The price is also trading at the highest level since June 2019. There is some pause around the midpoint. However, the buyers still remain in control, and the lure of the 200 day above at 138.588, may be the magnet target for the move.
The GBPJPY is getting a double boost from hope for Brexit and hope from US/China (that is propelling stocks and yields higher). That is the right cocktail for the explosive currency pair.
Bitcoin weekend update – lower
The rot for crypto began on Friday and continued over the weekend.
On approach back towards $10,000
Not helping matters were weekend reports on US government proposals to prevent big technology companies from functioning as financial institutions or issuing digital currencies
- will be discussed by Congress’ House Financial Services Committee
- draft legislation “Keep Big Tech Out Of Finance Act”
The First Requirement for Success
“Sun Tzu said if you sit by the river long enough, you’ll see the bodies of your enemies float by. The key is “long enough.” If you live long enough, you have to be the survivor. When I was a kid, we didn’t have the video games you have today, so we used to listen to comedy records. One of the greatest ones was Mel Brooks doing the 2000 year old man. Carl Reiner says to him, “how did you get to be the world’s oldest man?” And he says, “Simple. Don’t die.” How do you get to be the world’s oldest investor? The answer is don’t crap out.
“So if you look at distressed debt where we started in 1988, I could tell you who our number one competitor was in every year through 1995 and not one is a main competitor today. And it’s not because of what we did; all we did is perform consistently. They crapped out. It sounds simplistic to say, but the first requirement for success is survival…”
– Howard Marks
What steps do you take to ensure survival as a trader? (more…)