Trading Wisdom

success is a series of failures. A LOT OF FAILURES!! thats one thing that keeps me going,

Average Up is an important Strategy Only When an Important Advance is Expected
--> But buying at first moderately, and as the market advances in Your direction adding slowly and cautiously to the line — this is a way of speculating that requires great care and watchfulness, for the market will often react to the point of the average.
--> Failure to close out at the point of average destroys the safety of the whole operation.
--> This method should only be employed when an important advance or decline is expected, and with a moderate capital can be used with comparative safety.

Successful trading depends on a systematic control of losses and the securing of profits in excess of those losses.

Make a practice of looking over your commitments on a regular basis may be every day, or twice every week and selling out, at the market, all those showing a loss. That will keep your sheet clean and allow your profitable trades to run until the time comes to close them out.

The Bar (ie OHLC), Range of the Bar, Direction of Swing, Length of the Swing, The Angle of the Swing, The Trend, The Timeframe, The Market Environment, The Stage Cycle are all an important aspects of information on the Price Chart.

Always Look to buy the strongest instrument and sell the weakest instrument, with the bias that they will 'continue to Trend'.

My winners almost always turns to losers whenever I let the profit run in order to make up for my losers! What is to be done about this?

To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes. In a sense, they generally are correct. In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. – Victor Sperandeo

The game of making money in the stock market is deceptively simple. It is one of the few businesses where one makes offensive decisions and is not forced into making defensive ones. You play the game only when and where you wish to. You need only swing at the fat pitches which are over the plate and belly-button height. – Warren Buffett

Even great traders fight the constant battle over fear and greed. If it were easy, everyone would trade, and everyone would win. Wheres the sport in that? Michael Covel

Because trading involves inherent uncertainty that creates anxiety, it is best to focus on attending process goals versus focusing on outcome. By focusing on process goals you are focused on doing what is right versus trying to be right. - Andrew Menaker

People are always saying that the market is down because of profit taking. The fact is, the market goes down not only on profit taking, but on a lot of loss taking as well. – Mark Weinstein

Ty Cobb once was asked why he never had slumps. He said that whenever he felt himself getting into a slump, he wouldn’t try to get a hit, but he would simply try to make contact with the ball. To relate that concept to trading, when you’re in a slump, try to be patient and wait for a trade that you feel very confident about and keep the bet size small. Your goal should not be to make lots of money but rather to get your confidence back by making correct decisions.- Victor Sperandeo

Price & Perception of its market Value move Prices. The Best way is to, Separate Market Value from Market Perception & note when the Later is changing as the Former (Market Value) does not move Prices it is only the Later (Market Perception) that change Prices. Charts details the day to day, or even Minute to Minute Changes in (Price Discovery)What people think something is worth.

Charts are where Perception meets Reality. On Charts We look at 'What is Happening Right Now' & how it came to be. From there We make educated Guesses about the Future but the Goal is not to predict where the prices will be. The Goal is to determine What we do about it right now. If we decide to buy based on a chart, We already know What has to happen to prove us a) Right & that help us benefit from it or b) Wrong & that help us limit losses.

While performing Sentiment analysis, We must remember that The Crowd is Right for bulk of the Trend. We must limit 'an Exception' to extreme readings only.

Our minds delete, distort and generalize 99.99% of all the information out there. The brain does this because it has to. There’s so much information coming at us that if we consciously paid attention to just 5% of what’s going on without filtering the information, we would literally go crazy in a matter of moments.

This gives us an extremely limited focus to work with, much more limited than we think, making where we put that focus is extremely important. This is especially true when you realize that your brain takes an extremely small portion of reality and then literally makes up and fills in the surrounding information in a manner that it supports what we believe to be true.

Always remember before 'Being Sure' that Our Mind Plays Games with Us & Creates our Reality. The Truth is Relative.

By just being aware that we have a limited focus and that we’re making up most of our reality, we can vastly improve our trading.

You see, we have this trading plan that we were going to follow. We said we were going to focus on certain things and make certain moves when those things happened. That’s great! But the market has a way of distracting you. It hangs scary pictures and shiny objects in front of you to get your imagination of fear and greed going, hoping you’ll shift your focus. And if you let your focus shift to what you’re imagining, before you know it, your limited focus is no longer in the real world. You see dangers where they don’t exist and opportunities that aren’t there. When this happens the snowball effect kicks in and your imagination goes wild, whipping you up into a frenzy of poor decisions based off of imagination. Before you know it, the market has taken your money.

To avoid this, know what you need to focus on in advance of starting the trade and keep your focus there. Create a detailed plan and follow it. When the market tries to distract you with fake out moves, keep your head down and your focus on your plan

All Big Losses begin as Small Losses. When The initial Premise / Reason for Buying is Gone, Get Out. If Your are Stumped on the Premise, chances are that others Might be stumped Too & they may have clear Money management rules to take them out, Which is Executed with a Iron Discipline. Hence, Prices Can Move far away against your Position / expectation (without even a retracement).Pros will Book out & i) Stay out & ii) Would also be to Flexible Enough to get back in later, if prices confirm.

During Bubbles, it seems that the psychological ambiance is rather one of public inattention to the thought that prices could fall, rather than firm belief that they can never fall."