M6 - Man, Mind, Money, Markets, Method & Madness
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So what do I do between trades? Read, and post what I find useful. Am posting here an article that's came to me in 'my inbox' - It can be applied to trading as well.
Three Strategies to Get (and Stay) Inspired
http://www.psychologytoday.com/blog/high-octane-women/201201/three-strategies-get-and-stay-inspired
Inspiration actually emerges from the soil of action: perspiration is just the water that nourishes it — August Turak
At first, this quote from Turak's article, 3 Keys to Getting and Staying Inspired, may seem counterintuitive. People often think inspiration is what propels action; not the other way around. Not so, says Turak, a marketing consultant. If inspiration is what you're seeking, he writes, it's a mistake to sit around and wait for it to strike :
"Very few of us drag ourselves off the couch and off to the gym from inspiration. Instead it is that dissatisfaction dished out by that vaguely familiar reflection in the full-length mirror that usually does the trick. Early on, our gym experience is anything but inspirational as we battle sore muscles, lethargy, and our tendency to rationalize. But then one day someone comments on our progress, we are flooded with inspiration, and we redouble our efforts. Little by little, this self-reinforcing virtuous spiral of action leading to inspiration which in turn produces more action repeats itself until, we actually start looking forward to going to the gym." If you're looking for a little inspiration, here are the three best ways to find it:
1. Act
Do something. Move. Act. React. But don't sit still, thinking the inspiration will come. If your goal is to write a book, start writing. If it's to get fit, start working out. Although inspiration does occasionally fall from the sky and into our heads, Turak notes, "Inspiration that doesn't result from action quickly fades, and that is why inspirational speeches and seminars are so often belittled as a waste of money."
2. Start Small
Most of us have become accustomed to getting what we want when we want it. When I was in graduate school and needed to write a paper, I had to go to the library—actually get up, get out, and drive to that physical location—search for relevant articles and research, make copies of what I needed, and write my paper. Today, within seconds, I can find hundreds of articles on point without ever leaving my chair. Turak says this cultural expectation of immediate gratification is, in part, what leads us to set goals that are too high, and therefore doomed to fail. Instead, he says, we need to take small steps toward an ultimate goal. He remembers that he used to be habitually late, until his mentor, Lou Mobley, the founder of the IBM Executive School, suggested that he commit to being on time for one appointment each day. Little by little, his timeliness inspired him to be on time more often. He's now been habitually early for over 30 years.
3. Work with Others
It's much easier to get and stay inspired when you're working with others who have similar goals, or at least someone who is motivated to keep you on the right track. Working with others can also help you enjoy the experience more. It's hard for most people to stay motivated for long periods of time all on their own. If you can, that's great. But why not increase your odds of long-term success by hooking up with someone who is working toward a similar goal and who can reignite the fire when your flame starts to die down?
"Genius, they say, is 80% perspiration and 20% inspiration," Turak writes. "While I like this aphorism, I would take it a step further. Perspiration and inspiration may seem like two distinct elements coexisting in the character of genius. But as counter-intuitive as it may sound, inspiration actually emerges from the soil of action: perspiration is just the water that nourishes it."
Trading strategies - Edited excerpts
http://www.financial-spread-betting.com/strategies/Spread-trading-strategies.html
The following thoughts are what has worked for me so far. I certainly wouldn’t claim they apply every time or for everyone but I wanted to put my thoughts in writing and provide some useful tips to those relatively new to the subject.
What to Do and What to Avoid
Avoid making too many mistakes – sounds obvious but who said trading needs to be complicated? You need to strive to make the most of the advantages and flexibility offered without getting hit too hard by the downsides, because inevitably you cannot get it right all of the time.
#Money management is critical.
Too many hours spent at poker tables have taught me the importance of not going bust. As long as you’re in the game, you have a chance. In retrospect, the wisest thing I did was to bet very lightly when the market lurched downwards in October. The portfolio’s net loss was 4% at the worst point – worrying at the time but not enough to induce panic.
#It’s not so much what you buy, it’s what you do afterwards.Well, OK, stock selection is also vital but the oldest rule in the book is best: cut losers and let winners run. Or, as one trader puts it: “Being wrong is acceptable but staying wrong is unacceptable.” Cutting losers is hard in practice: the temptation is to believe things will improve if only you wait. Equally, letting winners run has mostly been rewarding. According to the Nobel prize-winning Professor Daniel Kahneman, traders place far greater emphasis on losses than on profits. As a consequence, they hold too long (to avoid the pain of loss) and close their winning positions too early (for fear of losing what they’ve won). Some people actually find profitable trades more stressful than losing ones; they take hair-raising risks on the downside and are mice on the upside.
#Exploit any edge.
I’m trading FTSE 100 and FTSE 250 stocks almost exclusively. I can’t hope to compete with City analysts who have more time to study fundamentals and greater access to managements. So I have paid more attention to indicators of “buzz” or momentum. The point about momentum: it can last longer than you think. When it evaporates, rule two applies: get out.
#Think big.
Producing a good stock idea every week is, I suspect, impossible. But I have stuck with two long-term themes.
#Avoid churning.
In the early weeks, I was guilty of switching in and out of positions. The line between churning and actively cutting losers can be frustratingly fine but you have to give shares a little time to perform.
#Don’t overtrade.
Getting in and out of positions instantly – and this is what makes it so attractive yet potentially so dangerous – the ease of access and frequency of the game. We know that the markets are risky yet it is not the markets which make mistakes but us humans. Most beginners fall in the trap of overtrading even when told that the real opportunities are few and far between.
#Information overload.
Learn to tell the difference between paid commentators who talk/write because they are paid to talk as journalists and fill space in tabloids and those who are experts in their field.
#Be flexible.
This is my golden rule: adapt to conditions.
http://www.financial-spread-betting.com/strategies/Spread-trading-strategies.html
The following thoughts are what has worked for me so far. I certainly wouldn’t claim they apply every time or for everyone but I wanted to put my thoughts in writing and provide some useful tips to those relatively new to the subject.
What to Do and What to Avoid
Avoid making too many mistakes – sounds obvious but who said trading needs to be complicated? You need to strive to make the most of the advantages and flexibility offered without getting hit too hard by the downsides, because inevitably you cannot get it right all of the time.
#Money management is critical.
Too many hours spent at poker tables have taught me the importance of not going bust. As long as you’re in the game, you have a chance. In retrospect, the wisest thing I did was to bet very lightly when the market lurched downwards in October. The portfolio’s net loss was 4% at the worst point – worrying at the time but not enough to induce panic.
#It’s not so much what you buy, it’s what you do afterwards.Well, OK, stock selection is also vital but the oldest rule in the book is best: cut losers and let winners run. Or, as one trader puts it: “Being wrong is acceptable but staying wrong is unacceptable.” Cutting losers is hard in practice: the temptation is to believe things will improve if only you wait. Equally, letting winners run has mostly been rewarding. According to the Nobel prize-winning Professor Daniel Kahneman, traders place far greater emphasis on losses than on profits. As a consequence, they hold too long (to avoid the pain of loss) and close their winning positions too early (for fear of losing what they’ve won). Some people actually find profitable trades more stressful than losing ones; they take hair-raising risks on the downside and are mice on the upside.
#Exploit any edge.
I’m trading FTSE 100 and FTSE 250 stocks almost exclusively. I can’t hope to compete with City analysts who have more time to study fundamentals and greater access to managements. So I have paid more attention to indicators of “buzz” or momentum. The point about momentum: it can last longer than you think. When it evaporates, rule two applies: get out.
#Think big.
Producing a good stock idea every week is, I suspect, impossible. But I have stuck with two long-term themes.
#Avoid churning.
In the early weeks, I was guilty of switching in and out of positions. The line between churning and actively cutting losers can be frustratingly fine but you have to give shares a little time to perform.
#Don’t overtrade.
Getting in and out of positions instantly – and this is what makes it so attractive yet potentially so dangerous – the ease of access and frequency of the game. We know that the markets are risky yet it is not the markets which make mistakes but us humans. Most beginners fall in the trap of overtrading even when told that the real opportunities are few and far between.
#Information overload.
Learn to tell the difference between paid commentators who talk/write because they are paid to talk as journalists and fill space in tabloids and those who are experts in their field.
#Be flexible.
This is my golden rule: adapt to conditions.
For all those who think HFT is not present in the Indian markets.
http://atma-india.net/component/opt...ailid,676-mail-test/task,view/tmpl,component/
http://www.quantinsti.com/mdp-nse-algo.php
http://atma-india.net/component/opt...ailid,676-mail-test/task,view/tmpl,component/
http://www.quantinsti.com/mdp-nse-algo.php
Business Plan Template for Your Stock Trading
http://howtobuystocks.blogspot.in/2013/11/business-plan-template-for-your-stock.html
So, if you do not have a WRITTEN Business Plan, then this is a good time to get a paper and start jotting down. The following outline is a simple example and of course you can always tweak it. This list works for me and hopefully will also work for you.
Before you jump directly to stock market and start buying stocks, you need to have a proper business plan. Stock investing/trading is just like any other business, you can't expect yourself to right away buy stocks and earn profit. Plan properly!
"If you fail to plan, you plan to fail."
This business plan template is what I used after adapting to so many books I read. I save this trading plan in my Evernote, so when there is time to spare while waiting for a bus or waiting for food, I would read this business plan just to refresh about what are the rules I set up when I started this business.
Just a Sample Business Plan.
MISSION
Write down all my mistakes (not following the above business plan)
http://howtobuystocks.blogspot.in/2013/11/business-plan-template-for-your-stock.html
So, if you do not have a WRITTEN Business Plan, then this is a good time to get a paper and start jotting down. The following outline is a simple example and of course you can always tweak it. This list works for me and hopefully will also work for you.
Before you jump directly to stock market and start buying stocks, you need to have a proper business plan. Stock investing/trading is just like any other business, you can't expect yourself to right away buy stocks and earn profit. Plan properly!
"If you fail to plan, you plan to fail."
This business plan template is what I used after adapting to so many books I read. I save this trading plan in my Evernote, so when there is time to spare while waiting for a bus or waiting for food, I would read this business plan just to refresh about what are the rules I set up when I started this business.
Just a Sample Business Plan.
MISSION
- To trade well and right!
- To be able to have different source of income
- To act as passive income for my retirement!
- To improve my EDGE
- To make ZERO mistakes
- To improve my automation of trading journal
- I am not a value investor
- I do not apply Dollar Cost Averaging
- I must follow my system, not following means a mistake
- I do not hold stocks more that 3 months
- ... (the list goes on)
- I use Yahoo Finance to get a stock quote
- I use Amibroker/Metatrader/NexusChart for my technical analysis
- I use Microsoft Excel for my trading performance monitoring
- ... (list down all you stock trading software)
- Stock screener is done by ... (my Online Stock Screener)
- The screening is based fundamental analysis (earnings, ROE, P/E, etc)
- My watchlist consist of (stock A, stock B, etc)
- My entry strategy is based on (Support resistance, Fibo, EMA, etc)
- My exit strategy is based on (Support resistance, Fibo, EMA, etc)
- My cut loss is at 8%
- Every time I buy stocks, maximum I can buy is xxx shares.
- Many different way to calculate (learn Position Sizing here)
- I buy stocks with random expectation
- Everything happens in stock market is RANDOM
- I believe in "Five Fundamental Truth" about trading
- ... etc
- Download EOD everyday
- Update my trading journal (start creating Stock Tracking Spreadsheet)
- Read financial reports
- Read news
Write down all my mistakes (not following the above business plan)
I have finished reading Trading For A Living by Alexander Elder. [Going to Re-read once again after sometime]
It gave me good understanding about how market work.Very good book for beginner.
Next Step Is to have good grasp/understanding of following things [When to draw and how to find out]
Support and Resistance
Trend Lines
Gaps
Patterns
After above topic is next thing is Candlesticks...
Guys am doing correctly or do i need to change anything in my learning.
@Note:- If you thing this is not proper thread then i will edit post.
Reason to post in this topic is that i consider above topic very crucial in trading methods
It gave me good understanding about how market work.Very good book for beginner.
Next Step Is to have good grasp/understanding of following things [When to draw and how to find out]
Support and Resistance
Trend Lines
Gaps
Patterns
After above topic is next thing is Candlesticks...
Guys am doing correctly or do i need to change anything in my learning.
@Note:- If you thing this is not proper thread then i will edit post.
Reason to post in this topic is that i consider above topic very crucial in trading methods
Snake.Head,
Posting some charts of Support and Resistance, different from how we tend to see it.
A support level is a price level where the price tends to find support as it is going down. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely to continue dropping until it finds another support level - Wiki
A resistance level is the opposite of a support level. It is where the price tends to find resistance as it is going up. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely that it will continue rising until it finds another resistance level - Wiki
Posting some charts of Support and Resistance, different from how we tend to see it.
A support level is a price level where the price tends to find support as it is going down. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely to continue dropping until it finds another support level - Wiki
A resistance level is the opposite of a support level. It is where the price tends to find resistance as it is going up. This means the price is more likely to "bounce" off this level rather than break through it. However, once the price has passed this level, by an amount exceeding some noise, it is likely that it will continue rising until it finds another resistance level - Wiki
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