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10 Trading Thoughts

  
  Education
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ten101. You only have three choices when you are in a bad position, and it is not hard to figure out what to do:
(1) Get out
(2) Double up, or
(3) Spread it off.

I have always found getting out to be the best of all three choices.

  1. No opinion on the market or you are doubtful about market direction? Then stay out. Remember, when in doubt, stay out.
  2. Don’t ever let anyone know how big your wallet is, and don’t ever let anyone know how small it is either.
  3. If you snooze, you lose. Know your markets, when they trade, and what reports will affect the market price.
  4. The markets will always let you in on the losers; the market’s job is to keep you out of winners. Dump the dogs and ride the winning tide.
  5. Stops are not for sissies.
  6. Plan your trade, then trade your plan. He who fails to plan, plans to fail.
  7. Buy the rumor and sell the fact. Watch for volatility in these situations; it usually marks tops or bottoms in the markets.
  8. Buy low, sell high. Or buy it when nobody wants it, and sell it when everybody has to have it!
  9. It’s okay to lose your shirt, just don’t lose your pants; that is where your wallet is.

One last thought to leave with you. It applies not only to every-day life but to trading the markets as well:
Success is measured not so much by the wealth or position you have gained, but rather by the obstacles you have overcome to succeed!

What is Money

  
Analysis, Education
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I came across the nugget of wisdom last night in Farmer Boy.

He waited till Father stopped talking and looked at him.
“What is it, son?” Father asked.
Almanzo was scared. “Father,” he said.
“Well, son?”
“Father,” Almanzo said, “would you–would you give me–a nickel?”
He stood there while Father and Mr. Paddock looked at him, and he
wished he could get away.
“What for?”
Almanzo looked down at his moccasins and muttered:
“Frank had a nickel. He bought pink lemonade.”
“Well,” Father said, slowly, “if Frank treated you, its’ only right
you should treat him.” Father put his hand in his pocket. Then he
stopped and asked:
“Did Frank treat you to lemonade?”
Almanzo wanted so badly to get the nickel that he nodded. Then he
squirmed and said:
“No, Father.”
Father looked at him a long time. Then took out his wallet and opened
it, and slowly he took out a round big silver half-dollar. He asked:
“Almanzo, do you know what this is?”
“Half a dollar,” Almanzo answered.
“Yes. But do you know what half a dollar is?”
Almanzo didn’t know it was anything but half a dollar.
“It’s work, son,” Father said. “That’s what money is; it’s hard work.”

……

“How much do you get for half a bushel of potatoes?”
“Half a dollar,” Almanzo said.
“Yes,” said Father. “That’s what’s in this half-dollar, Almanzo. The work that raised half a bushel of potatoes is in it.”Almanzo looked at the round piece of money that Father held up. It looked small, compared to all that work.”You can have it, Almanzo,” Father said. Almanzo could hardly believe his ears. Father gave him the heavy half dollar.”It’s yours,” said Father.  “You could buy a suckling pig with it, if you want to. You could raise it and it would raise a litter of pigs,worth four, five dollars apiece. Or you can trade that half-dollar for lemondade, and drink it up. You do as you want, it’s your money.”

Hard Realities for Traders

  
  Education
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* If you don’t save a good portion of your earnings in successful years of trading, you won’t last during the less successful years;

* If you don’t have a solid nest egg of savings to support you while you’re learning trading, you won’t survive your learning curve;

* Everyone has a passion for trading; if you don’t have a passion for learning to trade, take a pass on financial markets and find the field of endeavor that offers intrinsic reward;

* If you’re living for your trading, you won’t make it trading for a living. Other things need to sustain you in the lean times, particularly the things that are more important than markets;

* The ratio of time spent working on your trading to time spent actually trading is predictive of long-term career success;

* In any performance field, the percentage of participants who can sustain a living from their craft is under 5%; always have a Plan B;

* No one can make you successful as a trader if you lack the requisite talents and skills; a mentor can, at best, help you make the most of the talents and skills you possess;

* Even if you are very successful as a trader, your annual income will be a fraction of your leveraged portfolio size;

* Your risk and reward will always be proportional: count on drawdowns of at least half of what you hope to make in markets;

* Psychology alone cannot make you a successful trader, but it can make you an unsuccessful one;

* Quiet markets reveal the best traders;

* Over time, your risk-adjusted returns are more valuable than your absolute returns;

* Trading is a business and, as such, must always adapt to changing market conditions;

* If you can’t make money consistently when paper trading, you won’t be successful when your capital is on the line;

* If someone promises you trading success, keep a close eye on your wallet.

12 Trading Rules

  
  Education
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121. Loss of opportunity is preferable to loss of capital

2. Picking safe, readable, and ultimately high probability trades is the way to go

3. Use logical profit objectives for all positions. Know your exits and stick to them

4. Markets are squirrelly animals – make your trading plans ahead of the market

5. Don’t buy new highs or sell new lows – wait for the market to come to you. Buy retracements. If you miss the train, don’t beat yourself up – another one will come by shortly

6. Above all, follow your own trading plan and no one else’s

7. Trade quietly – with the exception of a mentor, tell no one about your positions, profits, or losses. This is especially true for those who are close to you, like your wife, husband, or friends. This self-gratification process or sharing process will put you under psychological pressure to win on every trade and can be a primary reason for failure to follow your plan

8. Don’t carry a sizeable position when traveling. The market will always catch you off guard at the most inopportune time

9. You are only one trade from humility. A swelled head does not belong on a trader’s shoulders

10. Add to your knowledge before attempting to add to your wallet. Newbie traders think they can become pros with little more than a computer and hope. In this business, hope is a four letter word. Show me a humble trader, and I’ll show you someone ready to learn

11. Develop your sense of humor – you’ll definitely need it

12. Help other traders whenever you can. This is more practical than philosophical – giving keeps the ego in line and when you need help, and you will, you’ll find it.

10 Trading Thoughts

  
  Education
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1. You only have three choices when you are in a bad position, and it is not hard to figure out what to do:
(1) Get out
(2) Double up, or
(3) Spread it off.

I have always found getting out to be the best of all three choices.

  1. No opinion on the market or you are doubtful about market direction? Then stay out. Remember, when in doubt, stay out.
  2. Don’t ever let anyone know how big your wallet is, and don’t ever let anyone know how small it is either.
  3. If you snooze, you lose. Know your markets, when they trade, and what reports will affect the market price.
  4. The markets will always let you in on the losers; the market’s job is to keep you out of winners. Dump the dogs and ride the winning tide.
  5. Stops are not for sissies.
  6. Plan your trade, then trade your plan. He who fails to plan, plans to fail.
  7. Buy the rumor and sell the fact. Watch for volatility in these situations; it usually marks tops or bottoms in the markets.
  8. Buy low, sell high. Or buy it when nobody wants it, and sell it when everybody has to have it!
  9. It’s okay to lose your shirt, just don’t lose your pants; that is where your wallet is.

One last thought to leave with you. It applies not only to every-day life but to trading the markets as well:
Success is measured not so much by the wealth or position you have gained, but rather by the obstacles you have overcome to succeed!

Apollo Robbins: The art of misdirection (Mind Blowing Video )

  
Analysis, Education, Video
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Pickpocketing is a triumph of craft: a distracting touch with one hand, while the other hand gets to work, and the next thing you know … where’s my wallet? Apollo Robbins is a modern master of picking pockets, possessor of a subtle understanding of human attention, a taste for classic crime, and something he calls “grift sense” — which, as he told the New Yorker , is “stepping outside yourself and seeing through the other person’s eyes, thinking through the other person’s mind, but it’s happening on a subconscious level.”
 
Robbins makes a living as an entertainer, speaker and television personality, and he also is the founder of Whizmob Inc., a collective of misdirection experts — including reformed criminals — that schools military and law enforcement leaders in fraud and scam tactics. Robbins has also collaborated with academics in his quest to understand how awareness and attention can be manipulated. He’s co-author of a 2011 paper that explores something he noticed in his countless hours of practice: people’s eyes are more easily misdirected to follow a curve than a straight line. (more…)

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