Cornholio's Reading Suggestions

Great work Bug and thanks for sharing. I'm a big fan of developing habits (good ones of course). By now you should be well on your way to running a major hedge fund. How is it going? Where did the volatility/squeeze studies take you? In my case succesful, but only as far as my (bad) habits would let me.

I'm really glad you like the thread. Unfortunately I'm not there yet. Life and country got in the way. In terms of 'life' getting in the way...I'm not gonna bother you with my personal stuff, but in terms of country, well, I spent the last year serving my country in the Estonian Defence Forces as an NCO. Estonia is one of the few countries that still has conscription (btw, that's not me on the picture). I'm still interested in FX and the markets, but due to a lack of funds I'm not that active. I didn't get very far with the volatility studies because the time that I did have I spent studying market statistics, which was very interesting indeed.

I've had a lot of success in the markets, but due to bad habits and overreaching I've had to give all of my profits away and it sucks. I know that quite a few people have found my posts interesting and educational, but unfortunately knowledge of something doesn't produce profits all by its own. In any case, I decided to get a clean slate and start with a minimum of 10 pips in mind. It's a brand new project for me and if you're interested you can check out my progress here: http://10pipschallenge.blogspot.com/ (where I just recently published a post about habits ). Right now I'm in the planning and building (a system) phase and I intend to start trading in the autumn. I'm aiming for slow, incremental growth as I have to divide my time between studying (uni) and trading.

All the best to you!

hey bug, long time good sir... I remember your posts, check out my thread Im starting a small trading group, if you're interested feel free .

Good to see you around whatever the case

Hiya, CindyXXXX

I couldn't find the thread so I PM'd you.

That bloke you see on the picture....yeah...he probably had a pretty busy morning defending the perimeter (the rifle is on automatic). Some people simply didn't brush their teeth that often, but the ones who did sometimes found themselves, um... multitasking.

Well you have been keeping busy. I've never been to Estonia but, from what I hear, it's a country well worth defending. I'll be checking into the 10 pip challenge from time to time.

If you're going to visit, do it in the summer (+25 C) or the dead of winter (-20 C). And let me know so I can give you a tour.

I've mentioned the importance of exercise before in this thread (see this post), but it bears repeating. Since we all have mp3 players or smartphones these days, I thought it better to post a link to an interview with John Ratey, someone who has done extensive research into the benefits of exercise. Take this hour to listen to what he's got to say, because it's worth it. Aside from staying fit and not going fat there are loads of other benefits, some of which can be of great help to us as traders. And if you want more, he's got a book as well: Spark: The Revolutionary New Science of Exercise and the Brain.

Interview with John Ratey @ Brain Science Podcast

Oh, and as far as the previous post that I linked to goes, well, the host of Brain Science Podcast, Ginger Campbell, has done an interview with the author of Brain Rules as well. Check it out: Interview with John Medina @ BSP.

Podcasts for the win!

good material bug.I remember exactly that scene in your avatar...when Don was about to break up with that cute psychologist.

Such a generous offer. I might surprise you one day. I really would like to visit Estonia if I ever get the chance.

Alrighty, then. Let's just agree not to post any images of the trip with our faces on the thread. I'd like to keep my online identity separate from my real identity as I'm sure you would too.

New content relevant to thread topic:
A walk in nature has been shown to restore the ability to focus.While natural settings can be as busy and stimulating as a city, we process them differently, allowing for attention to be restored. Even looking at pictures of nature had positive effects.

Turn out city parks are a wonderful idea. You can read more here.

Over the recent weeks as I've been developing my 10 pips trading setup I've also made it a goal to read through each and every file, pdf and physical piece of paper that has any trading related information in or on it (don't try this at home, haha ). Along the way, I found some old quotes I took from Alexander Elder's Trading for a Living book I read a long time ago. I can't remember whether the book itself was good enough to recommend to others, but the quotes I took, some of them at least, are pretty good. I've been posting some stuff to my blog as well and I imagine, as time goes on, that I will be posting more of this stuff on the blog and less here. I'll still keep the thread alive with new content coming every now and then to share what I've found and to give the thread a bump so that it stays on the radar.

The mental baggage from childhood can prevent you from succeeding in the markets. You have to find your weaknesses in order to change. Keep a trading diary - write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure.
p.26

You need to make trading as objective as possible. Keep a diary of all your trades with "before and after" charts, keep a spreadsheet listing all your trades, including commissions and slippage, and maintain very strict money management rules. You may have to devote as much energy to analyzing yourself as you do to analyzing the markets.
p.28

Some losers will lick their wounds and wait until the pain fades away. Then they will return to trading, having learned little. They will be fearful,
and their fear will further impair their trading. Very few traders will begin the process of change and growth. For these rare individuals, the pain of hitting rock bottom will interrupt the vicious cycle of getting high from winning and then losing everything and crashing. When you admit that you have a personal problem that causes you to lose, you can begin building a new trading life. You can start developing the discipline of a winner.
p.35

A trader has to admit that he is a loser, just as a drunk has to admit that he is an alcoholic. Then he can begin his journey to recovery. This is why every morning before trading I sit in front of the quote screen in my office and say: "Good morning, my name is Alex, and I am a loser. I have it in me to do serious financial damage to my account." This is like an AA meeting- it keeps my mind focused on the first principles.
p.37

When a monkey hurts its foot on a tree stump, he flies into a rage and kicks the piece of wood. You laugh at a monkey, but do you laugh at yourself when you act like him? If the market drops while you are long, you may double up on your losing trade or else go short, trying to get even. You act emotionally instead of using your intellect. What is the difference between a trader trying to get back at the market and a monkey kicking a tree stump?
p.40

1. Decide that you are in the market for the long haul- that is, you want to be a trader even 20 years from now.
2. Learn as much as you can. Read and listen to experts, but keep a degree of healthy skepticism about everything. Ask questions, and do not accept experts at their word.
3. Do not get greedy and rush to trade - take your time to learn. The markets will be there with more good opportunities in the months and years ahead.
4. Develop a method for analyzing the market- that is, "If A happens, then B is likely to happen." Markets have many dimensions -use several analytic methods to confirm trades. Test everything on historical data and then in the markets, using real money. Markets keep changing - you need different tools for trading bull and bear markets and transitional periods as well as a method for telling the difference (see the sections on technical analysis).
5. Develop a money management plan. Your first goal must be long-term survival; your second goal, a steady growth of capital; and your third goal, making high profits. Most traders put the third goal first and are unaware that goals 1 and 2 exist (see Chapter 10, "Risk Management").
6. Be aware that a trader is the weakest link in any trading system. Go to a meeting of Alcoholics Anonymous to learn how to avoid losses or develop your own method for cutting out impulsive trades.
7. Winners think, feel, and act differently than losers. You must look within yourself, strip away your illusions, and change your old ways of being, thinking, and acting. Change is hard, but if you want to be a professional trader, you have to work on changing your personality.
p.42

The Source of Money
When you try to make money trading, do you ever stop to wonder where your expected profits will come from? Is there money in the markets because of higher company earnings, or lower interest rates, or a good soybean crop? The only reason there is money in the markets is that other traders put it there. The money you want to make belongs to other people who have no intention of giving it to you. Trading means trying to rob other people while they are trying to rob you. It is a hard business. Winning is especially difficult because brokers and floor traders skim money from losers and winners alike. Tim Slater compared trading to a medieval battle. A man used to go on a battlefield with his sword and try to kill his opponent, who was trying to kill him at the same time. The winner took the loser's weapons, his chattels, and his wife, and sold his children into slavery. Now we trade on the exchanges instead of doing battle in an open field. When you take money away from a man, it is not that different from drawing his blood. He may lose his house, his chattels, and his wife, and his children may suffer.
p.49

Newsletters are good entertainment. Your subscription rents you a penpal who sends amusing and interesting letters and never asks you to write back, except for a check at renewal time.
p.54

The market is a loosely organized crowd whose members bet that prices will rise or fall. Since each price represents the consensus of the crowd at the moment of transaction, all traders are in effect betting on the future mood of the crowd. That crowd keeps swinging from indifference to optimism or pessimism and from hope to fear. Most people do not follow their own trading plans because they let the crowd influence their feelings, thoughts, and actions.
p.56

Warren Buffet, one of the most successful investors of our century, commented: "I think it's fascinating how the ruling orthodoxy can cause a lot of people to think the earth is flat. Investing in a market where people believe in efficiency is like playing bridge with someone who's been told it doesn't do any good to look at the cards."
p. 74

It is better to draw support and resistance lines across the edges of congestion areas instead of extreme prices. The edges show where masses of traders
have changed their minds, while the extreme points reflect only panic among the weakest traders. Minor support or resistance causes trends to pause, while major support or resistance causes them to reverse. Traders buy at support and sell at resistance, making their effectiveness a self-fulfilling prophecy.
p.75

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