General Trading Chat
- Thread starter timepass
- Start date
- Tags idle thoughts trading talk only
the first leason in share market is u cant maintain discipline while on live trade ..
so far every one used to say we need to have discipline to win mkt .. this is a single statement and belief that makes million of trades to believe that they can keep up discipline and makes them enter trade and go bankrupt ..
the underlying fact is discipline cant maintained in mkt no matter u try eternally ..
so far every one used to say we need to have discipline to win mkt .. this is a single statement and belief that makes million of trades to believe that they can keep up discipline and makes them enter trade and go bankrupt ..
the underlying fact is discipline cant maintained in mkt no matter u try eternally ..
1) You need something that works over long term in your market + timeframe, an edge, a tilt in probabilities.
And rational position sizing that respects Drawdown.
2) You must have confidence/belief in 1, which needs backtesting - mechanical/manual.
3) You must accept that the edges are smaller than you had hoped, but they are enough
4) You must accept uncertainty and drawdown and live through it without changing and tinkering in realtime.
5) You probably need to stay in the market for long time to be able do above.
6) And finally have to be able to adapt as market can change. For ex, US stocks are apparently Mean reverting now, but once they used to trend more.
Trading is a lot like buy and hold investing in Mutual fund after that, with smaller periods of ups and downs.
Once you have edge then you will be afraid of messing up by breaking discipline even though it is uncomfortable ..
Anyway, just what i think ..
And rational position sizing that respects Drawdown.
2) You must have confidence/belief in 1, which needs backtesting - mechanical/manual.
3) You must accept that the edges are smaller than you had hoped, but they are enough
4) You must accept uncertainty and drawdown and live through it without changing and tinkering in realtime.
5) You probably need to stay in the market for long time to be able do above.
6) And finally have to be able to adapt as market can change. For ex, US stocks are apparently Mean reverting now, but once they used to trend more.
Trading is a lot like buy and hold investing in Mutual fund after that, with smaller periods of ups and downs.
Once you have edge then you will be afraid of messing up by breaking discipline even though it is uncomfortable ..
Anyway, just what i think ..
Usually one trades for the following 3 reasons:
Generate Income - Intra Day Trading
Generate capital - Swing Trading
Generate wealth - Positional Trading
Strange as it may sound, believe me to succeed in any of these trading styles one should have an alternate source which already meets the reason for trading that style. For example if one wants to generate income through day trading he should already have a day job making him enough income, similarly for generating capital and wealth. Only then one will have the disciple and stress free mindset to succeed. There are exceptions but usually very rare.
I strongly believe the goal of trading should be to generate wealth, one cannot build wealth if the focus is only to generate income or capital.
This is my personal opinion, the best way to succeed is to follow this process:
1. Initially Trade intraday only to build a Price Action based trading strategy (Mechanical/systematic) and not for generating income as it will be quick way to find your edge.
2. If the intraday strategy (Price Action) has an edge it will definitely work for swing & positional as the only difference is the time frame.
3. Always measure the Effort/Time spent to the rewards received, if your alternative income source or day job returns are better continue with it and trade on the sideline passively to generate the required capital/wealth at a faster rate.
4. Once the returns from trading is more than that from the alternative income source for a considerable time period (1-2 yrs) one can shift full time to trading that style.
5. Always focus on the end goal which should be to generate wealth as quickly as possible before retirement, one cannot continue with pressure and stress related to day trading all your life. Once enough wealth is generated one can easily trade intraday/swing with confidence & disciple as it will be more of keeping oneself occupied and be in touch with market.
Generate Income - Intra Day Trading
Generate capital - Swing Trading
Generate wealth - Positional Trading
Strange as it may sound, believe me to succeed in any of these trading styles one should have an alternate source which already meets the reason for trading that style. For example if one wants to generate income through day trading he should already have a day job making him enough income, similarly for generating capital and wealth. Only then one will have the disciple and stress free mindset to succeed. There are exceptions but usually very rare.
I strongly believe the goal of trading should be to generate wealth, one cannot build wealth if the focus is only to generate income or capital.
This is my personal opinion, the best way to succeed is to follow this process:
1. Initially Trade intraday only to build a Price Action based trading strategy (Mechanical/systematic) and not for generating income as it will be quick way to find your edge.
2. If the intraday strategy (Price Action) has an edge it will definitely work for swing & positional as the only difference is the time frame.
3. Always measure the Effort/Time spent to the rewards received, if your alternative income source or day job returns are better continue with it and trade on the sideline passively to generate the required capital/wealth at a faster rate.
4. Once the returns from trading is more than that from the alternative income source for a considerable time period (1-2 yrs) one can shift full time to trading that style.
5. Always focus on the end goal which should be to generate wealth as quickly as possible before retirement, one cannot continue with pressure and stress related to day trading all your life. Once enough wealth is generated one can easily trade intraday/swing with confidence & disciple as it will be more of keeping oneself occupied and be in touch with market.
https://www.business-standard.com/a...-why-do-many-still-invest-119022300173_1.html
Aviation is bad business today, why do so many people still want to get in?
Your chances of launching a successful airline nowadays are far lower than, say, in the 1970s
Loizos Heracleous | The Conversation February 23, 2019 Last Updated at 11:26 IST
Yet another airline has collapsed – this time British operation Flybmi, costing almost 400 jobs as hundreds of flights were cancelled at short notice. It is the latest in a string of recent European airline failures, including Air Berlin, Alitalia, Monarch, Primera, Azur and Cobalt. This is despite years of good growth in worldwide air passenger demand, including in Europe. So why are so many airlines going out of business?
Aviation is an unattractive industry from an investor point of view at the best of times, notwithstanding the passenger growth. Aeroplanes are expensive assets with few alternative uses, which limits the ability of airlines to reduce their capacity during lean periods – compared to, say, a manufacturing business that can close a plant and lay off workers. Airlines also have to deal with fluctuating expenses like fuel, which accounts for around a third of total costs. There is also extensive regulation, combative unions, relatively low barriers to entry and the fact that travellers can so easily shop around.
The sector did become more profitable in the early years of this decade, but this was due to lower fuel prices rather than any underlying improvements. When fuel prices began climbing again in 2016, airlines were hit. This is particularly true of those like Flybmi and Monarch which were buying fuel in pounds sterling, since the currency has weakened in the wake of the 2016 Brexit vote. The political uncertainty has not helped British airlines either – though equally we must generally beware of companies using this as a scapegoat for bad performance.
The future’s not bright
The net result is that it is very difficult for airlines to consistently turn a profit. Business failings are particularly likely to be punished – in the case of Flybmi, for instance, neither the company’s costs nor its fares were low enough to compete effectively. It didn’t have enough passengers for the number of routes it was offering, and could not change capacity without incurring more costs.
It seems extremely likely that there will be more collapses in the sector, and more consolidation as weaker players get weeded out – Ryanair’s takeover of the Austrian airline Laudamotion is one recent example; another is the Virgin Atlantic tie-up with Flybe. The attractions of growing through acquisition are much the same as in many sectors: it gives you greater control of purchasing costs by boosting your negotiating power, while also potentially reducing the downward pressure on ticket prices by taking competitors out of the market.
Takeovers are not a panacea, however, since fuel prices will still fluctuate and underlying negatives like high sunk costs into aeroplanes don’t go away. At the same time, there is no shortage of competition from new entrants who are seemingly oblivious to the challenges in the industry.
In 2017, for example, 79 new airlines launched around the world at the same time as 25 went bust. In Europe, it was 29 entrants and 14 collapses. This rate of market entry is surely unsustainable, particularly in a mature market. It’s also financially irrational when you reflect that the airlines sector produces among the poorest returns on investment. Yet even during recessions, the rate of airline launches sometimes increases – see the graphic below.
Your chances of launching a successful airline nowadays are far lower than, say, in the 1970s, when far fewer went under: there is overcapacity across the industry now, with one in five passenger seats empty across the world. Today’s competition rules also make it much harder for nations to prop up failed airlines.
The trouble is that this is a sexy industry; who wants to make widgets when you can pose in front of a plane? There is also a lot of hubris – driven by the handful of airlines that do make good returns, even as most do not.
This brings me to Ryanair, the biggest carrier in Europe, which has itself issued several profit warnings – the most recent in January. The Irish airline, which boasts a 15% market share and 142m passengers, blamed the warning on reduced ticket prices in response to cutthroat competition.
But don’t look to Ryanair to become another of the casualties: chief executive Michael O'Leary still expects the company to make profits after tax of around €1 billion to €1.1 billion (£871 billion to £958 billion) for the financial year 2019. This is in line with the operating margins in the region of 20% that the company has achieved in recent years, higher than any European competitor.
As the airline with the highest internal efficiency by some distance, the lowest customer fares, an ambitious expansion plan and the greatest geographical coverage in Europe, Ryanair retains its fundamental competitive advantages. Softer fares might have hurt the company, but they will have hurt other European airlines much more. Besides all the other factors that make life so difficult for the likes of Flybmi, getting thumped by Ryanair is another almost inevitable pitfall of being in the airline business.
Aviation is bad business today, why do so many people still want to get in?
Your chances of launching a successful airline nowadays are far lower than, say, in the 1970s
Loizos Heracleous | The Conversation February 23, 2019 Last Updated at 11:26 IST
Yet another airline has collapsed – this time British operation Flybmi, costing almost 400 jobs as hundreds of flights were cancelled at short notice. It is the latest in a string of recent European airline failures, including Air Berlin, Alitalia, Monarch, Primera, Azur and Cobalt. This is despite years of good growth in worldwide air passenger demand, including in Europe. So why are so many airlines going out of business?
Aviation is an unattractive industry from an investor point of view at the best of times, notwithstanding the passenger growth. Aeroplanes are expensive assets with few alternative uses, which limits the ability of airlines to reduce their capacity during lean periods – compared to, say, a manufacturing business that can close a plant and lay off workers. Airlines also have to deal with fluctuating expenses like fuel, which accounts for around a third of total costs. There is also extensive regulation, combative unions, relatively low barriers to entry and the fact that travellers can so easily shop around.
The sector did become more profitable in the early years of this decade, but this was due to lower fuel prices rather than any underlying improvements. When fuel prices began climbing again in 2016, airlines were hit. This is particularly true of those like Flybmi and Monarch which were buying fuel in pounds sterling, since the currency has weakened in the wake of the 2016 Brexit vote. The political uncertainty has not helped British airlines either – though equally we must generally beware of companies using this as a scapegoat for bad performance.
The future’s not bright
The net result is that it is very difficult for airlines to consistently turn a profit. Business failings are particularly likely to be punished – in the case of Flybmi, for instance, neither the company’s costs nor its fares were low enough to compete effectively. It didn’t have enough passengers for the number of routes it was offering, and could not change capacity without incurring more costs.
It seems extremely likely that there will be more collapses in the sector, and more consolidation as weaker players get weeded out – Ryanair’s takeover of the Austrian airline Laudamotion is one recent example; another is the Virgin Atlantic tie-up with Flybe. The attractions of growing through acquisition are much the same as in many sectors: it gives you greater control of purchasing costs by boosting your negotiating power, while also potentially reducing the downward pressure on ticket prices by taking competitors out of the market.
Takeovers are not a panacea, however, since fuel prices will still fluctuate and underlying negatives like high sunk costs into aeroplanes don’t go away. At the same time, there is no shortage of competition from new entrants who are seemingly oblivious to the challenges in the industry.
In 2017, for example, 79 new airlines launched around the world at the same time as 25 went bust. In Europe, it was 29 entrants and 14 collapses. This rate of market entry is surely unsustainable, particularly in a mature market. It’s also financially irrational when you reflect that the airlines sector produces among the poorest returns on investment. Yet even during recessions, the rate of airline launches sometimes increases – see the graphic below.
Your chances of launching a successful airline nowadays are far lower than, say, in the 1970s, when far fewer went under: there is overcapacity across the industry now, with one in five passenger seats empty across the world. Today’s competition rules also make it much harder for nations to prop up failed airlines.
The trouble is that this is a sexy industry; who wants to make widgets when you can pose in front of a plane? There is also a lot of hubris – driven by the handful of airlines that do make good returns, even as most do not.
This brings me to Ryanair, the biggest carrier in Europe, which has itself issued several profit warnings – the most recent in January. The Irish airline, which boasts a 15% market share and 142m passengers, blamed the warning on reduced ticket prices in response to cutthroat competition.
But don’t look to Ryanair to become another of the casualties: chief executive Michael O'Leary still expects the company to make profits after tax of around €1 billion to €1.1 billion (£871 billion to £958 billion) for the financial year 2019. This is in line with the operating margins in the region of 20% that the company has achieved in recent years, higher than any European competitor.
As the airline with the highest internal efficiency by some distance, the lowest customer fares, an ambitious expansion plan and the greatest geographical coverage in Europe, Ryanair retains its fundamental competitive advantages. Softer fares might have hurt the company, but they will have hurt other European airlines much more. Besides all the other factors that make life so difficult for the likes of Flybmi, getting thumped by Ryanair is another almost inevitable pitfall of being in the airline business.
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