Trading Wisdom

We don't See Things are they are; We See Things as We Are - Anais Nin

Everytime the price moves to a significant new area (a price level which attracts a Lot of activity) It will change the perception of all the Participants to some degree. If the change in price is enough to cause an urge to action, Sooner or Later he participants will enter an order, Creating an orderflow imbalance You are trying to profit from.

You are either right or wrong in trading and also it's not the most important thing, Far more important is how much money we make, when we are right and how much we lose when we end up being wrong.

Markets absolutely do not move in One direction neither Short Term nor Long Term, They Move from Overbought to Oversold & vice versa. Range Expansion & Mean Reversion (Similar to Breathing) is Beat the True Rhythm of Markets.

Tape is a record of Human nature passing in Review... It gives us the opinion and Hopes of thousands of people... Never fight the Tape You will do Yourself More Good if You, Follow You Stops ( Markets may have caught many traders (including & like US) on the Wrong side & it can Go Higher or Lower than We can Possibly imagine especially if We are Wrong ) ... We need to Swallow the Pill, End it there & Move On

We must attune our Powers of Perception to the Period ahead and never ever everlastingly compare every factor with some occurrence in recent past. As New Conditions will arise, New Trading public will be Born, However The Old cycle of action and reaction will Roll on. We will always have 'Over Bulled" movements & disastrous crashes.

Exiting a Winner Early at a “Good Price” Is a Mistake. After all Your Winners need to makeup for the cost of doing Business ie (Losses & Commissions).If you find a Winner, You must ensure You have a Very Good Reason to Exit the Trade.

The only sure way of telling whether a range (sideways market) is a distribution range or an accumulation range is on a conclusive breakout from the range (it can be in either direction). The following are the Signposts Which can help; Speed of Swings, Volume in the Swings, Prior Trend Age ie Young/Mature, View of DOM (when prices are on Edges), Reaction to Positive / Negative News etc

What I’ve learned is that Taking action is almost always the Gateway into feeling better. Rarely have I been able to think my way into different behaviour or results, instead it’s only when I take action (especially when I don’t want to) that things begin to shift, and I begin feeling better. The program, like life, doesn’t work when I’m into thinking, It works only when I’m into action. Action, harnessed to routine, is The Gateway. - AA

When a leading stock tops, there is a 80% chance that it will go down 50%, and there is a 50% chance that it will go down 80%. - Mark Minervini -->

Mental Capital Trumps Real Capital. Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions costs measurable real capital, but it costs immeasurable mental capital - Dennis Gartman

The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market. - George Soros

Your protective stop is like a red light. You can go through it, but doing so is not very wise. If you go through town running every red light, you probably wont get to your destination quickly or safely - Dr Van K. Tharp

I am mainly concerned with making a multiple of what I risked and doing it repeatedly over and over again ie go for rapid compounding over relatively smaller gains rather than finding a Big Winner. It is much easier to find 4 or 5 names that go up 20% than it is to find a stock that doubles - Mark Minervini

It is nothing short of a miracle that the modern methods of education have not yet entirely strangled the holy curiosity of inquiry… It is a very grave mistake to think that the enjoyment of seeing and searching can be promoted by means of coercion and a sense of duty. - Albert Einstein

In trading, a Zero Sum Market the most important thing is the Loser, as loser in the market is the one who will pay the Winner. Always try to do something different from the loser even if it means adhering to Your Small Losses. You cannot be consistent winner in market unless you are willing to accept that the loser as your source of profit.

A familiar situation occurs in trading, when You have a certain expectation of how the market should behave. E.g. you might for various reasons, think that the market will go in a particular direction. So when the Market does not follow what you expect, you might initially make up excuses for it. However when the market continues to go completely in the opposite direction of what you expect, your logic and reasoning centres would shut down, your fight-or-flight response kicks in, you treat it like a hostile attack on you, and you would do anything to win (or not lose), e.g. keep averaging down. This is a key sequence of events which can tear down your Capital (Physical as well as Emotional. Make sure You have this Situation embedded in You Mind & make sure You side-step the Trap. Always trade what you see, not what you think.

The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade - Bruce Kovners

Small Discoveries, The Building blocks of trading Edge is
1) to build our own set of observations
2) Catalogue the Price swing that catch Your Eye
3) Deconstruct the Price Swing to see How & Where did they Begin
4) How they interacted with the charts & any specific observations or Behaviour
5) Try to check if its fits other instruments & Refine them
6) Anticipate & Try to catch the Next few of them.
7) Take Few Trades & Mark the Outcomes & Observations & Refine ! Repeat ! Repeat ! Repeat
8) Start this process 1-7 again as Markets keep Changing so does their edges inefficiencies.

The fear of "being left behind” is stronger than the “fear of loss / pleasure from not chasing". When you consider the action of “chasing after the price”, there will be relief if the price trends further and further in your direction. This would have been Compounded by the regret (i.e. pain) felt for not chasing after the price if you had maintained your trading discipline. On the other hand, in Most of the cases the Prices crashes against the trend from the Level form where You had Chased & Most of them Do not Book the Stop Loss aggravating the Pain. An Executive Decision approach is required While choosing between a Participation in a Momentum Play or Waiting for a Mean Revision pullback Setup within the Realms of Probability & Discipline.