A Bird's eye view to a Bull's eye
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I am presenting below some concepts which you may not find in any book. Will write with lag intervals so the ideas generated here are understood and digested. I am not forcing my views, but what I will write are my views and opinions may differ, I encourage readers to participate in the discussion so as we can proceed step by step cementing the things discussed.
Discussion topics:
1. What is trading?
2. Who is a trader?
3. How much to put at stake?
4. Where to put the stake?
5. What is the process?
6. What are the skills?
7. What are the tools?
8. Show me the Data
9. Do not learn !
10. Practice defeat !
11. Special occasions, windfall opportunities – is it trading?
12. The Report card
13. Reward yourself
14. Trading portfolio models
Regards,
Discussion topics:
1. What is trading?
2. Who is a trader?
3. How much to put at stake?
4. Where to put the stake?
5. What is the process?
6. What are the skills?
7. What are the tools?
8. Show me the Data
9. Do not learn !
10. Practice defeat !
11. Special occasions, windfall opportunities – is it trading?
12. The Report card
13. Reward yourself
14. Trading portfolio models
Regards,
Last edited:
1. What is trading?
Trading is everywhere, apart from the stock and financial products, emotions, fear, love all intangible things are traded. BTW this is not what we will discuss, lucky you :rofl:.
In the financial world, Trading is defined as distribution or accumulation of wealth, in the end it is a zero sum game. Einstein said the energy cannot be created or destroyed it can be transferred from one form to the other, in financial trading money is not created nor destroyed. It is just transferred from one to the another.
Simply to define it, Trading is Cheating !!! If you get this one definition right in your head, you will go a long way in this profession. Once we have defined this definition, now comes the next question, who do you think you can cheat?
Get into a real life scenario, think of people around you whom you would find difficult to cheat and those whom you can cheat easily. You will get the answer. Yes will agree that it is difficult to cheat someone who is a bully, informed, smart, aggressive, but quite likely that you can cheat someone who is fearful, a simpleton, a fool. Yes, there you are, you can cheat fools, and they are there in plenty. What is easier to do to pick a pocket or bend down and take out some coins from blind mans bowl. I know I am sounding grose. The latter is easy, and we need to do it, because as defined trading is cheating. You will make little from him but you will make it daily. Unlike pick pocketing where you can probably make more, but if you are caught, you will be thrashed and some day your hand will be cut, then you cant even pick up the coins from the blind mans bowl.
So my friends, though I may call you one, in the market we actually arent, every day I am looking how to get your money and similarly you need to do the same with me too :thumb:
Cheat the fools, look out for them, keep searching, there are many every where and they always will be.
Regards,
Trading is everywhere, apart from the stock and financial products, emotions, fear, love all intangible things are traded. BTW this is not what we will discuss, lucky you :rofl:.
In the financial world, Trading is defined as distribution or accumulation of wealth, in the end it is a zero sum game. Einstein said the energy cannot be created or destroyed it can be transferred from one form to the other, in financial trading money is not created nor destroyed. It is just transferred from one to the another.
Simply to define it, Trading is Cheating !!! If you get this one definition right in your head, you will go a long way in this profession. Once we have defined this definition, now comes the next question, who do you think you can cheat?
Get into a real life scenario, think of people around you whom you would find difficult to cheat and those whom you can cheat easily. You will get the answer. Yes will agree that it is difficult to cheat someone who is a bully, informed, smart, aggressive, but quite likely that you can cheat someone who is fearful, a simpleton, a fool. Yes, there you are, you can cheat fools, and they are there in plenty. What is easier to do to pick a pocket or bend down and take out some coins from blind mans bowl. I know I am sounding grose. The latter is easy, and we need to do it, because as defined trading is cheating. You will make little from him but you will make it daily. Unlike pick pocketing where you can probably make more, but if you are caught, you will be thrashed and some day your hand will be cut, then you cant even pick up the coins from the blind mans bowl.
So my friends, though I may call you one, in the market we actually arent, every day I am looking how to get your money and similarly you need to do the same with me too :thumb:
Cheat the fools, look out for them, keep searching, there are many every where and they always will be.
Regards,
contd...
Who is a fool, does a fool remain sacrosant, i.e. does a fool always remain a fool or does he evolve and become smart. Like wise, does a smart and intelligent guy remain so throught his life. The answer is a big NO.
There is nothing constant and everything changes with time, experience and the environment. Yes, the environment, this is the key word. The circumstances around can make swap the fool and the intelligent.
As we go ahead we will try and explore and find ways / tools to handle different circumstances so that we remain smart, intelligent, unbaised and are not swap with fools.
Regards,
Who is a fool, does a fool remain sacrosant, i.e. does a fool always remain a fool or does he evolve and become smart. Like wise, does a smart and intelligent guy remain so throught his life. The answer is a big NO.
There is nothing constant and everything changes with time, experience and the environment. Yes, the environment, this is the key word. The circumstances around can make swap the fool and the intelligent.
As we go ahead we will try and explore and find ways / tools to handle different circumstances so that we remain smart, intelligent, unbaised and are not swap with fools.
Regards,
What is trading? contd....
How is stock or financial product trading (commodities, currencies, bonds, interest futures, derivatives, etc) different than conventional trading (like a small time grocery store or a wholesale grain trader).
The conventional traders are
- Long only
- Non levered
- Flow with the trend (will buy umbrellas before monsoon and firecrackers before diwali to trade, and not viceaverca)
The financial product traders are
- Long, Short (simply to put - not sure what to do)
- Levered (Margin trading, derivatives, worse - trading Options, which is like trading a perishable commodity)
- Flow with or against the trend
You will find very rarely a conventional trader failing and very rarely a financial product trader succeeding.
Regards,
How is stock or financial product trading (commodities, currencies, bonds, interest futures, derivatives, etc) different than conventional trading (like a small time grocery store or a wholesale grain trader).
The conventional traders are
- Long only
- Non levered
- Flow with the trend (will buy umbrellas before monsoon and firecrackers before diwali to trade, and not viceaverca)
The financial product traders are
- Long, Short (simply to put - not sure what to do)
- Levered (Margin trading, derivatives, worse - trading Options, which is like trading a perishable commodity)
- Flow with or against the trend
You will find very rarely a conventional trader failing and very rarely a financial product trader succeeding.
Regards,
....So the first step in trading is first be a convetional trader... a successful conventional trader and then try to reach out for mastery in financial product trading.
It is difficult, but believe you me, even if you start tomorrow, with Non-levered, Long Only, Trend flowing method, you will make a good trader in far less time than what one is doning, (Long / Short, Levered, With / against the trend)
When we come to asset allocation part (portfolio management) you will realise that the major allocation of the Wealth portfolio has to be built on the above premise of a convetional trader and it cannot be simpler than that.
Regards,
p.s. Had a good afternoon siesta (a rare opportunity on a non weekend day) and now have some lazy bones cracking. Taking a tea break now.
It is difficult, but believe you me, even if you start tomorrow, with Non-levered, Long Only, Trend flowing method, you will make a good trader in far less time than what one is doning, (Long / Short, Levered, With / against the trend)
When we come to asset allocation part (portfolio management) you will realise that the major allocation of the Wealth portfolio has to be built on the above premise of a convetional trader and it cannot be simpler than that.
Regards,
p.s. Had a good afternoon siesta (a rare opportunity on a non weekend day) and now have some lazy bones cracking. Taking a tea break now.
Who is a trader?
We all are in real life trading almost everything we can see and also what we cannot !
But who is a successful trader? He is like a Don (pls avoid laughing, though I am at this moment), who has a network of informers (khabari), henchmen (executors) and advisors (right hand / left hand of the Don himself).
The Don himself does not do anything, he just directs. Similarly for a successful trader, he does not do anything, he directs. He builds his network (either through people or through system in our case), this network tells him what, where and how much is the opportunity. The Don Trader decides when to strike, he directs his henchmen to do it, so is far away from the action point (and hence can do course correction) including elimination of his own henchmen if required.
The trader himself, like the Don is always underground and works discreetly, not attracting any attention from the common man. But his is at work always.
Regards,
We all are in real life trading almost everything we can see and also what we cannot !
But who is a successful trader? He is like a Don (pls avoid laughing, though I am at this moment), who has a network of informers (khabari), henchmen (executors) and advisors (right hand / left hand of the Don himself).
The Don himself does not do anything, he just directs. Similarly for a successful trader, he does not do anything, he directs. He builds his network (either through people or through system in our case), this network tells him what, where and how much is the opportunity. The Don Trader decides when to strike, he directs his henchmen to do it, so is far away from the action point (and hence can do course correction) including elimination of his own henchmen if required.
The trader himself, like the Don is always underground and works discreetly, not attracting any attention from the common man. But his is at work always.
Regards,
A successful trader may portray a cool and serene image (that is a smart coverup) but IMO he is quite a restless person, all the times, he has a wagering mind. A mind which keeps on fluctuating, randomly and non - randomly. But the best part is he has a clear focus on what and how to act, his wagering mind keeps on processing new information which keeps on coming all the times.
Multi TF trading portfolio helps to keep mind wagering, which is what is required. Because when you have some TF earning, there are some TF which are losing, (ofcourse overall you want to the whold portfolio to be positive and that is achived by proper allocation of funds - which I will write later)
A waggering mind creates, non emotion to the holdings, exit in profit or at loss does not create anxiety in the mind.
Hence such a trader will find opportunities in Bullish, Bearish and non moving markets.
Regards,
p.s. : You can train your mind to wager to your advantage in trading. Since this is not the core area of this thread, I will not write / give examples on the same here.
Multi TF trading portfolio helps to keep mind wagering, which is what is required. Because when you have some TF earning, there are some TF which are losing, (ofcourse overall you want to the whold portfolio to be positive and that is achived by proper allocation of funds - which I will write later)
A waggering mind creates, non emotion to the holdings, exit in profit or at loss does not create anxiety in the mind.
Hence such a trader will find opportunities in Bullish, Bearish and non moving markets.
Regards,
p.s. : You can train your mind to wager to your advantage in trading. Since this is not the core area of this thread, I will not write / give examples on the same here.
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