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23-Lefsetz’s Business Rules

  
  Education
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1. You’ve got to get along. If you don’t have good people skills, you’ll never succeed, even if you run your own business.

2. Money talks. He who has cash has leverage, and someone always has more than you do. There’s rarely a deal between equals.

3. Leverage is not always about money. I.e. if you’re an unsigned band that can sell out arenas, you’ll get an incredible deal from the label.

4. If a deal is too good, it probably is. In other words, if the other person can’t make any money, there’s going to be a problem.

5. The best deals are win-wins.

6. If you’re not willing to risk, if you’re not willing to give something up, you’re going to sit on the sidelines. Sure, the label might not offer you your dream deal, but the alternative is to go it alone, which is an option, but probably not the one you want since you entered negotiations in the first place.

7. You don’t know everything, you just think you do. If you’re not learning every day, you’re hanging with the wrong people and not applying yourself.

8. The more powerful the person, the less the chance you’ll see them at the conference. The conference is for never have and wannabes and for the purveyor to make coin. In other words, have a good time at SXSW, but the real winners are the people who put on the conference.

9. A contract does not guarantee behavior. At most it’s a guideline. If you think suing to get what you want is a solution, that the contract entitles you to win, you’re naive. (more…)

10 Things I Learned from Steve Jobs about Trading and Life

  
Analysis, Education
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Less is more, simple is good.

That’s been one of my mantras—focus and simplicity. Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple.

Your first loss is your best loss

Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.

When studying the market and speculating about the future, the past is all we have.

You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

No one gets paid for originality – you get paid for making money. You should be happy to take other people’s good ideas and run with them, as long as you understand exactly why you are in the trade and take full responsibility of the results. If you don’t know why you are in a trade, you won’t know when to exit. (more…)

Perfection in Trading :Anirudh Sethi

  
Analysis, Education
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Image result for perfectionBeing perfect is certainly not easy. Perfection is debatable, and needless to say, as challenging as can be. Matters become increasingly difficult when this is attributed to a trading environment or situation. Many traders end up setting their trades by focusing on what they want the results to be. They focus on the outcome of the trade, and do not give a lot of attention to the actual execution of that trade. This is in fact one of the main reasons why trading is so difficult. A trader can never hope to be perfect in his or her decisions. And, one can never hope for a perfect scenario, where any decision that is made results in a favorable result. Therefore the general rule of thumb that traders need to appreciate and get used to is that they need to perfect the decision making process and the execution of the trade, rather than hoping to make the results perfect. The choices, research, knowledge and information discerned are the steps that need to be perfected in the hope of perfecting the results of the trade in question.

Perfection also revolves around another issue in trading. The vast majority of traders worry a great deal about the outcome of their trading decisions. They experience a fear of losing out, and they do not want to risk a lot of their money either. They realize that in trading it is practically impossible to be perfect, and no matter how many years pass, and how many trades they do, they are still going to end up being imperfect.

Moreover, especially in the case of novice traders, it is normal to think that being a trader is a somewhat simple way to make money. They see the future as being rewarding and profitable – typically, a perfect way to become rich. Yet, they tend to underestimate the risks involved in trading and the various issues that revolve around making sound trading decisions and choices. (more…)

36 Points For Traders

  
Analysis, Education
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  1. You absolutely have to find a vent to release pressure and adrenaline – sports, drinking, painting, anything that helps.
  2. If you can manage to find a mentor in which you believe, you will make it much faster.
  3. Your trading style has to fit your personality and your lifestyle, or cognitive dissonance will get the better of you.
  4. Meditation sucks, doesn’t work for me.
  5. Overtrading is your death.
  6. Once you are comfortable missing a move, you will be able to trade profitably.
  7. Not trading the news does not make sense at all – during news there is real liquidity and a real interest to push prices in one way or another. Let the market show its hand, then get in.
  8. Let it turn, let price create structure, THEN get in, with the structure as protection in your back.
  9. Don’t system hop, but adapt the system of your choosing to your needs.
  10. Don’t trade overleveraged.
  11. Yes, it is possible to turn a small account into a huge account, but don’t expect it to happen overnight, and don’t expect to be able to do it before your fifth (or so) year of trading.
  12. Some are faster, some are slower, some will never get it.
  13. Risk per trade is a function of the volatility of your strategy and your psychological ability to deal with swings in your equity.
  14. Know exactly why you are trading, and what you want to achieve – which career path will be yours?
  15. Daytrading is not easier than swingtrading or vice versa. They both simply require different skillsets, different abilities (yes, some people are just too slow for daytrading) and different preparation routines.
  16. Trust your gut. Absolutely love the trade? Get in. Don’t love it? Just stay out.
  17. No pain, no gain. Demo trading is ok, but don’t do it for too long. Risk micro amounts of money, get used to losing money. Because you will lose for the rest of your life if you want to be a trader. It’s part of the game. You “just” need to win more than you lose.
  18. Listening to music while trading can be a good thing – just know yourself. If I listen to aggressive music in the car, I will push the pedal to the metal. The same happens when trading.
  19. Have a trading journal and review, review, review.
  20. Work on your psychology, but don’t underestimate the power of knowledge. Fear stems from not knowing. Work hard, know more, be more confident. Most psychological issues will dissolve into thin air.
  21. Yes, I said: don’t system hop. But for the first year or two, try out everything you can. Every market, every strategy, every trading style. How can you know what fits your personality if you don’t know what’s out there? Finally, decide and take the leap of faith.
  22. Screen time alone won’t help you. Again: review. REVIEW! You need an effective feedback loop or you will repeat the same mistakes again, and again, and again. There is no learning by doing in trading.
  23. You don’t need to be hyper intelligent to be a trader. The best traders I know are “simple” minds. They do what works, they have no ego, and they disregard what does not make sense to them.
  24. Do not have monetary goals. Have process-oriented goals.
  25. Do not look at your P&L during your trading session or you WILL trade your P&L. Before and after a trading session, the money in your account is money, yes. During the session, however, the money in your account is ammunition that has to be spent in order to acquire more ammunition, if that makes sense.
  26. Trading with the trend is not easier than trading against the trend. Trading with the trend is the last thing I learned and every single trader I know seems to have the hardest time following a trend.
  27. If you want to pay for education, do your research. It is very possible to differentiate the scammers from the real traders. If something sounds too good to be true, run as fast as you can.
  28. Never forget to be grateful at the end of the day. You are given the chance to make money by clicking a mouse from the comfort of your home. How many people on earth can say the same?
  29. Trading fulltime is often romanticized but can quickly turn into a social nightmare. Keep up that work-life-balance.
  30. Find other mental challenges for your brain than trading. Feeding your body McDonalds everyday will, and nothing else, will kill you. Trading every day without reading a good novel once in a while will make you braindead.
  31. Likewise, there are lots of videos on Youtube with quite good content. You need to find a way to distinguish the goodies from the baddies.
  32. Don’t be mistaken, trading is gambling. You want to be a professional gambler? Make up your mind.
  33. A structured pre-trading routine is one of the best things you will ever do in your career as a trader. Take your time to create and establish it.
  34. Learn your basic and classic price patterns such as Head & Shoulders, Wedges, Triangles, etc. It takes a week to get them all into your head and you will profit from that knowledge for years to come.
  35. Never pick tops and bottoms. Take the middle of the moves and your results will improve.
  36. Believe in your abilities and trust your strategy or you will be destroyed.

That’s it for now. I have plenty more of these in my tattered and very, very old notebook. Which do you agree with, which not? Do you want more of my wartime wisdoms? Let me know in the comments below!

Successful Investors Traits to Be the Next Warren Buffett

  
  Education
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Here’s a great speech by Mark Sellers to Harvard graduates.

It’s titled So You Want to Be the Next Warren Buffett and discusses 7 traits you need to be different.

Trait #1 – Ability to buy and sell stocks against the market

Trait #2 – Obsession

Trait #3 – Willingness to learn from past mistakes

Trait #4 – Inherent sense of risk based on common sense

Trait #5 – Confidence and Conviction

Trait #6 – Get both sides of your brain working

Trait #7 – Ability to live through volatility

A Growth Job

  
  Education
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  • Is never permanent.
  • Makes you like yourself.
  • Is fun.
  • Is sometimes tedious, painful, frustrating, monotonous, and at the same time gives a sense of accomplishment.
  • Bases compensation on productivity.
  • Is complete: One thinks, plans, manages and is the final judge of one’s work.
  • Addresses real need in the world are large – people want what you do because they need it.
  • Involves risk-taking.
  • Has a few sensible entrance requirements.
  • Ends automatically when a task is completed.
  • Encourages self-competitive excellence.
  • Causes anxiety because you don’t necessarily know what you’re doing.
  • Is one where you manage your time, money and people, and where you are accountable for specific results, which are evaluated by people you serve.
  • Never involves saying Thank God It’s Friday.
  • Is where the overall objectives of the organizations are supported by your work.
  • Is where good judgment is one, maybe the only, job qualification. 
  • Gives every jobholder the chance to influence, sustain or change organizational objectives.
  • Is when you can quit or be fired at any time.
  • Encourages reciprocity and and parity between the boss and the bossed.
  • Is when we work from a sense of mission and desire, not obligation and duty.
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