Evolution of a trader

CreditViolet · #1 16th October 2004, 01:17 AM

STARTS OFF “Greed orientated.”
Loses because:
1 Market problems
a Not a zero sum game, a “very negative” sum game
b Market psychology – doing the wrong thing at the wrong time
c The majority is always wrong
d Market exists on chaos and confusion.
2 Own problems
a Overtrading
b No knowledge
c No discipline
c No protection against market psychology
d Random action through uncertainty, broker’s advice for example
e Market views.
RESULT: the “greed orientated” trader gets a good kicking and
becomes “fear orientated.”

Fear Orientated
Loses because:
1 Market problems as above
2 Scared money never wins
3 Own problems
a Still overtrading – derivatives
b Fear brings on what it fears
c Tries to cut losses too tight creating more losses
d Still no real understanding of what it takes.
RESULT: Traders who persevere “travel through the tunnel” and
becomes “risk orientated.”

Risk Oriented
This is when they start to make money
because they:
1 Develop a methodology which give them an edge
2 Use an effective Money Management system
3 Develop the discipline to follow their methodology
4 Erase “harmful” personality traits.

sh50 · #2 17th October 2004, 09:00 AM

Very nice broad guideline for beginners. You have explained money management excellently in your other post. I hope you will elaborate on the other 3 points in risk management equally well unless I have missed them.

Gurmeet · #3 22nd October 2004, 12:30 PM

Some other Good Books

Some of the best books which I have read, include
a: Market Wizards by Jack Shwartz - Wiley Finance

b: New Market Wizards by Jack Shwartz - Wiley Finance

c: The Reminiscences of a Stock Operator: Live and times of Jesse Livermore. By Edvin Lefevre - Wiley Finance

The first two books are interviews of some of Americas top traders. They speak very clearly about their experiences and strategies. There is a lot to learn from them

The last one is an biography of one of Americas legendary speculator, who started small, made it big, but ended broke. Once again, lots to learn from this.

SwamiNathan · #4 24th July 2005, 01:30 PM

Dear CV,
U r really G...R...E...A...T

xyz · #5 24th July 2005, 03:51 PM

thanks for the tips for beginners like me creditviolet.

biyasc · #6 18th April 2007, 10:24 AM

Quote:

Originally Posted by CreditViolet

STARTS OFF “Greed orientated.”
Loses because:
1 Market problems
a Not a zero sum game, a “very negative” sum game
b Market psychology – doing the wrong thing at the wrong time
c The majority is always wrong
d Market exists on chaos and confusion.
2 Own problems
a Overtrading
b No knowledge
c No discipline
c No protection against market psychology
d Random action through uncertainty, broker’s advice for example
e Market views.
RESULT: the “greed orientated” trader gets a good kicking and
becomes “fear orientated.”

Fear Orientated
Loses because:
1 Market problems as above
2 Scared money never wins
3 Own problems
a Still overtrading – derivatives
b Fear brings on what it fears
c Tries to cut losses too tight creating more losses
d Still no real understanding of what it takes.
RESULT: Traders who persevere “travel through the tunnel” and
becomes “risk orientated.”

Risk Oriented
This is when they start to make money
because they:
1 Develop a methodology which give them an edge
2 Use an effective Money Management system
3 Develop the discipline to follow their methodology
4 Erase “harmful” personality traits.

hi cv,

can u explain this "Tries to cut losses too tight creating more losses".

thnx in advance.

uasish · #7 18th April 2007, 03:38 PM

Quote:

Originally Posted by biyasc

hi cv,

can u explain this "Tries to cut losses too tight creating more losses".

thnx in advance.

More tight SL , forgets Historical Volatility & does not leave ROOM for stock to play.

biyasc · #8 18th April 2007, 03:46 PM

Quote:

Originally Posted by uasish

More tight SL , forgets Historical Volatility & does not leave ROOM for stock to play.

hi uasish,

more tight stoploss=more loss? is this your view? if so then i am totally disagree with both of u. cv & uasish. as per my trading experiences, more tight stoploss=more mental satisfaction+more confidence to enter in a stock as per the plan+low risk+high reward propability .....

uasish · #9 18th April 2007, 05:02 PM

Quote:

Originally Posted by biyasc

hi uasish,

more tight stoploss=more loss? is this your view? if so then i am totally disagree with both of u. cv & uasish. as per my trading experiences, more tight stoploss=more mental satisfaction+more confidence to enter in a stock as per the plan+low risk+high reward propability .....

Biyasc,
Plz read this in context to CV's Steps.He has rightly depicted a picture ,both you & me have gone thru that Grilling,coming to the point,there he has mentioned ,that the trader indulges in more Strict measures ,plz try to understand The Trader at that stage thinks to restrict losses by employing SL (more strict ) without understanding that his Entry was wrong,his prime motive is Loss Restriction,but he forgets & cant conceive the "Flow" of price & the right "Timing" of his Entry .
I personally is totally in agreement with you regarding SL & last 1 month if you have noticed any of my posts for Entry Price you will find the SL to be fairly ok with the kind of reward.
Asish

suba_stocks · #10 20th April 2007, 07:34 AM

hi cv!

I always get delighted when ever i see your posting ....i am big fan of you apart from few other.

Thanks for your efforts to make us realise the facts

suba

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