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Some Rules for Living Applied to Trading

  
  Education
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I ran across these rules for living, and thought they apply beautifully to the process of trading successfully.  They are as follows:

  1. Show up.
  2. Pay attention.
  3. Live your truth.
  4. Do your best.
  5. Don’t be attached to the outcome.

Show up.  Woody Allen has said 90% of the story is showing up.  And I think that can be true for trading.  Showing up means being prepared and ready before the market opens.  It means getting your entry and exit orders in the market in a timely fashion.  You’ve done your research, and you’re clear about your intentions.

Pay attention.    Watch the price action.  Be cognizant of what your chosen indicators are saying.  Know what news is breaking, and watch the market’s reaction to the news.  Be alert to twists and turns in market direction.  Don’t wander off mentally or physically.

Live your truth.  Your truth could be fundamental or technical or a combination of the two.  But if you don’t trade in accordance with your guidelines, you can get yourself on the wrong side of the situation and yourself.  Be who you say you are as a trader.  Are you honest, perceptive, courageous, steady, and disciplined?  Are you trading in the manner you have chosen or committed to trade.

Do your best.  Honestly, all you can do is your best.  But your best can get better as you practice and learn.  Learn from your mistakes, and forgive yourself past digressions.  Each day is a new day, and each day brings new opportunities.  It’s your job to capture what you can of the opportunities even as you rigorously protect your capital.

Don’t be attached to the outcome.  This is the hard part, and this is the essential part.  The results of any given trade or trading day are really not indicative of whether or not you will be profitable.  One trade or day is simply not the measure of success, and is really irrelevant.  If you’re showing up, and paying attention, and living your viable truth, and doing your best, you can accept whatever outcome develops.  Of course, if the outcome is disastrous over time, you need to go back to the drawing board and develop better methods.

7 Psychological habits

  
  Education
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1. Overconfidence and optimism

Most of us are way too confident about our ability to foresee the future, and overwhelmingly too optimistic in our forecasts.

This finding holds across all disciplines, for both professionals and non-professionals, with the exceptions of weather forecasters and horse handicappers.

Lesson: Learn not to trust your gut.

2. Hindsight

We consistently exaggerate our prior beliefs about events.

Market forecasters spend a lot of time telling us why the market behaved the way it did. They’re great at telling us we need an umbrella after it starts raining as well, but it doesn’t improve our returns. We’re all useless at remembering what we used to believe.

Lesson: Keep a diary, revisit your thinking constantly.

3. Loss aversion

We hurt more when we sell at a loss than we feel happy when we (more…)

30 NUGGETS OF STOCK MARKET WISDOM

  
  Education
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“Wall Street people learn nothing and forget everything.”  Ben Graham

“ Buy on the cannons, sell on the trumpets.” Old French Proverb

“A stock broker is one who invests other people’s money until its all gone.”  Woody Allen

“It is fortunate for Wall Street as an institution that a small minority of people can trade successfully and that many others think they can.” Ben Graham

“Wall Street indices predicted nine out of the last five recessions!” Paul Samuelson

“ There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” William Bernstein

“The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.” Gordon Gekko

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”  George Soros

“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”  Mark Twain

“If past history was all there was to the game, the richest people would be librarians.” Warren Buffett

“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”  Warren Buffett

“A market is the combined behavior of thousands of people responding to information, misinformation and whim.”  Kenneth Chang

“The four most dangerous words in investing are “This time it’s different”.   John Templeton

“Money can’t buy you happiness but it does bring you a more pleasant form of misery.” Spike Milligan

“If you don’t follow the stock market, you are missing some amazing drama.”  Mark Cuban

“The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.”  Jesse Livermore

“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” Peter Lynch

“ Markets can remain irrational longer than you can remain solvent” John Maynard Keynes

“The markets will return to rationality the moment you have been rendered insolvent.” Dennis Gartman

“Risk is good. Not properly managing your risk is a dangerous leap” Evel Knievel

“Sometimes your best investments are the ones you don’t make.” Donald Trump

“The most predictable thing about the stock market is the number of experts who take credit for predicting it.” Dave Weinbaum

“I have probably purchased fifty ‘hot tips’ in my career, maybe even more. When I put them all together, I know I am a net loser.” Charles Schwab

“Money talks… but all mine ever says is good-bye.” Anon

“Don’t gamble! Take all your savings and buy some good stock and hold it ‘till it goes up, then sell it. If it don’t go up, don’t buy it.” Will Rogers

“Give me a stock clerk with a goal and I’II give you a man who will make history. Give me a man with no goals and I’II give you a stock clerk.” James Cash

“Never make forecasts, especially about the future.”  Samuel Goldwin

“Stocks are bought on expectations, not facts.” Gerald M. Loeb

“Your success in investing will depend in part on your character and guts, and in part on your ability to realize at the height of the ebullience and the depth of despair alike that this too shall pass.” John Bogle

“You make most of your money in a bear market, you just don’t realize it at the time.” Shelby Davis

26 Quotes for Trading & Life

  
  Education
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1. Don’t try making sense out of it. You’re in an insane asylum – things are not going to make sense, people will do things that don’t make sense, that they cannot adequately explain. People don’t know what makes them tick, only that they tick.

2. Happiness, of course…is all in your head. If you don’t know that, if you haven’t come to that realization, you will never be happy.

3. The Bull Market Syndrome. People, when they are met with success, take personal credit for it (bull markets breed geniuses), and when they are met with failure, blame luck.

4. Actually, luck is responsible for both! If you can only die by being struck by lightning, eventually, you will die by being struck by lightning! Conversely, if a man were to live forever, and bought a lottery ticket every week, eventually, he will win the lottery, with a probability that approaches certainty. Just stay the course, keep doing today what you must do today. As Woody Allen says, “Fifty percent of success is just showing up.”

Luck Trumps Brains. To get luck, keep showing up each day with your shoes on.

5. Creativity trumps money every time.

6. Fortunately in life, you don’t have to succeed at everything you do, only a few things. One success often justifies all prior attempts.

7. You can buy great a education – you can not buy brains.

8. The Oswald Principle: Usually, the best course of action in life, is to take no action (and usually, the best thing to say is nothing!). The guys in jail or there not because they didn’t do anything. Usually, you should just sleep in! If nothing really bad happens today, as my friend Oswald said to me in eighth grade, it’s been a good day!

9. You don’t have the problems you think you do. Actually, the only real problems are health and criminal problems. Everything else is just a frivolous, meaningless nuisance.

10. Never say never. Everyone, however righteous they may claim to be, however upstanding they say they are, will, under the right circumstances commit the crime. A cold morning, wet, hungry, tired, angry….they’ll do things they never dreamed they would! (more…)

"Some Rules for Living Applied to Trading"

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #

I ran across these rules for living, and thought they apply beautifully to the process of trading successfully.  They are as follows:

  1. Show up.
  2. Pay attention.
  3. Live your truth.
  4. Do your best.
  5. Don’t be attached to the outcome.

Show up.  Woody Allen has said 90% of the story is showing up.  And I think that can be true for trading.  Showing up means being prepared and ready before the market opens.  It means getting your entry and exit orders in the market in a timely fashion.  You’ve done your research, and you’re clear about your intentions.

Pay attention.    Watch the price action.  Be cognizant of what your chosen indicators are saying.  Know what news is breaking, and watch the market’s reaction to the news.  Be alert to twists and turns in market direction.  Don’t wander off mentally or physically.

Live your truth.  Your truth could be fundamental or technical or a combination of the two.  But if you don’t trade in accordance with your guidelines, you can get yourself on the wrong side of the situation and yourself.  Be who you say you are as a trader.  Are you honest, perceptive, courageous, steady, and disciplined?  Are you trading in the manner you have chosen or committed to trade.

Do your best.  Honestly, all you can do is your best.  But your best can get better as you practice and learn.  Learn from your mistakes, and forgive yourself past digressions.  Each day is a new day, and each day brings new opportunities.  It’s your job to capture what you can of the opportunities even as you rigorously protect your capital.

Don’t be attached to the outcome.  This is the hard part, and this is the essential part.  The results of any given trade or trading day are really not indicative of whether or not you will be profitable.  One trade or day is simply not the measure of success, and is really irrelevant.  If you’re showing up, and paying attention, and living your viable truth, and doing your best, you can accept whatever outcome develops.  Of course, if the outcome is disastrous over time, you need to go back to the drawing board and develop better methods.

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