Random Gyaan

Discussion in 'Words of Wisdom' started by mindgames, Nov 30, 2015.

  1. mindgames

    mindgames Well-Known Member

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    File notes on interesting stuff I come across...
     
  2. mindgames

    mindgames Well-Known Member

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    Source: http://www.tradingwithrayner.com/7-lessons-i-learned-from-7-years-of-trading/

    Here’s what Peter Brandt, a forty year veteran trader, has to say…

    In this portion of my trading, I will usually trade between 25 to 35 signals per month.

    When I wrote this speech in April, I took a look at the previous 3 months. Out of 91 trades, there were 31 profits or 34%. That means that 66% of the trades were losers.

    But further, the net bottom line profit for all 91 trades was represented by only 4 trades. Less than 5% of the trades put in the bottom line.

    More importantly, I am sure I would not have been able to predict which 5% it would have been before the fact.

    If you admit not knowing where the markets are headed, it’s a good thing.

    Why?

    You’ll have a stoploss in place because you know you can be wrong.
    You’ll risk a fraction of your capital because you don’t want to suffer the risk of ruin.
     
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  3. mindgames

    mindgames Well-Known Member

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    Source: Way of the Turtle, Curtis Faith

    A nice read, a large portion of the book deals with developing a trading system. As I'm still not into programming and algos, I largely skimmed those parts. However, one line stayed with me:

    Note that there are 17 losing trades in a row in the cocoa market before a very sizable winning trade that started in November 1998.

    Those 17 trades lost ~$17k over a period of 6 months, losing b'ween $700 to $1,300 in each trade. The 18th made ~25k.

    Talk about trusting your system. More importantly about cutting losses short and letting winners run.
     
    Last edited: Dec 1, 2015
  4. mindgames

    mindgames Well-Known Member

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    Source: The Complete TurtleTrader, Michael Covel

    Trading is a little bit like hitting a ball. If you are thinking what your batting average should be, you are not concentrating on the right thing when you bat the ball. Dollars are batting average of the trader.
     
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  5. mindgames

    mindgames Well-Known Member

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    Source: The Complete TurtleTrader, Michael Covel

    ALWAYS FOLLOW YOUR RULES

     
    Last edited: Dec 2, 2015
  6. mindgames

    mindgames Well-Known Member

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    MONEY MANAGEMENT

    If you were supposed to risk 2 percent of your trading capital, then you must risk 2 percent of your current 90,000 and not of the original 100,000.
     

  7. mindgames

    mindgames Well-Known Member

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    Something similar to the above. This one was apparently to do with Paul Tudor Jones. Reinforces the thought that losing streaks are normal and okay.

     
    Last edited: Dec 2, 2015
  8. mindgames

    mindgames Well-Known Member

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    Source: Trend Following, Michael Covel

    MARKETS CAN NEVER BE PREDICTED

    John W Henry
     
  9. mindgames

    mindgames Well-Known Member

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    Source: Trend Following, Michael Covel

    LETTING THE WINNERS RUN
    BEING STOPPED OUT IS OKAY
     
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  10. mindgames

    mindgames Well-Known Member

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    Source: Trend Following, Michael Covel

    Richard Donchian:

     
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