I'm gonna back up a bit here and point out the big-picture patterns of how we learn. Obviously, new information must be learned by the beginner in order to get into trading. HOW and WHO you learn this from is vitally important. This unknown knowledge must of course come from someone else, either through direct coaching or through books or other instructional material. Be very aware of WHO you are learning information form and implicit in this transfer is the results that person has achieved. Their information is going to tell you how to get their results, and that's it. That's why there's a focus on the masters, because they have the results we want. Problem with a lot of beginners is that they learn from people who are no better than themselves. Accountants, stockbrokers and financial planners are typically NOT the kinds of people that you want to learn from. That's because if they really knew how to trade successfully and retire as billionaires before they're 40, they would've done it by now instead of working a full-time job managing other people's money. So yes, the stories of the masters are surreal in that they are completely contradictory to the "common sense" notions that you typically pick up about investing. That's because most people's investing track-record is abysmal and those ideas will give you mediocre results. You have to learn the wild and crazy strategies that the masters use in order to get wild and crazy results...
I'm slowly unleashing the power of my mind but I'd like a bit more explaning on how developing yourself netted better trading results. Surely you all spent time trying to understand the <I>market</i> better too right? I understand is it important to set becoming a successful trader as a goal, imagine yourself successful, have self-discipline, perseverance and I also have my theory that the subconcious can be terribly lethal but few people ever use it(not that I know how to either) but how does all that relate to trading? All those things just equal taking your career as a trader more seriously and doing the maximum possible to learn and get better at it, not actually making money. What if the motivation is there, or growing? Also, define creativity as a trader, I read some of the best hedge fund managers and they just have a great understanding and do simple long/shorts. ps. how do you use your subconcious anyway? And what the hell is auto-suggestion to the subconcious mind.
strange... All the mind games don't do shit for me, only time when I became profitable in the markets when I kept stacking knowledge understood why price fell to X understood why price rose to X understood why stock A jumped 5% and stock B didn't move a dime putting the info together for example:Stock A jumping 5% and how price can rise to X understood .. understood.. understood.. <b>aka knowledge.</b> Knowing yourself doesn't mean shit, thats for papertraders who can't get their shit together. Knowing the KNOWLEDGE means the world. Because money no matter if its the stock markets, in business, in real life, anywhere, its all about knowing "information" few other people know about. Know that special market that is unexploitd, Knowing that special route into india where silk is sold for 20 cents and you can bring it back to sell for $20 Knowing the route to america where you can raid for millions of gold. Knowing the knowledge to build the atomic bomb to finish wars. ITs all about the KNOWLEDGE. everything else is secondary. This is what seperates the wheat from the chaff. This is what seperates the einsteins from the high school teachers, This is what seperates Warren buffet from the average value investors. If you had :legal: information that HPQ was going to have blow out earnings and you bought 2000 call options. <b> No understanding of self needed, just hit BUY BUY BUY BUY BUY BUY button. DONE! </b> You just made $500k right there. Extreme knowledge in your niche market.
TRUST YOUR INSTINCTS When you become interested in trading and begin due diligence, you are programmed to fail from day one. Think about it. Here's a sample of what you learn... 95% of all traders fail the market will burn you if you are in it for quick money, go do something else Your mind is very powerful and this negativity is deeply programmed in your subconscious mind. You are learning to fail just as you were taught. I say.... I trust my own judgement I am one of the 5% winners I respect the market but embrace the opportunity it gives me I am in it for the money Every day you are staring at charts. Traders exchanging goods for perceived value. You process information from various sources. Your subconscious mind is working to unfold the mystery. I say.... trust your hunches, your instincts. Give them a chance to unfold. Don't run at the first sign of defeat, but don't get stabbed near the heart either. Don't look to others for an entry or exit level. It is meaningless except for them. Don't sign up for a signal service or log onto a forum looking for entry levels or exit levels. Turn yourself over to yourself. Have confidence in your God given abilities. Forget what everyone else is saying to you about being careful, etc. If you are looking for security, take up badmitten or something. You are a trader. DRT
The DownRiver Trading Company I am the sole proprietor of this shop. Like Wal-Mart, I am open 24 hours a day. I pay the bills, keep the place looking good, have my business plan completed, know where my P&L is at all times, do my own IT work, plan for the future, understand tax laws, maximize my solo 401(k) and profit sharing. Everyday I have millions of potential buyers come to my shop and look at my wares. There are millions of other shops just like mine offering the same exact product. The only thing that separates the profitable shops from the ones that go bankrupt is the ability to buy and sell their wares at a reasonable price. I have no relationship with my customers so they are not loyal. I spend most of my day looking to buy or sell my wares at the best price. I can buy from suppliers easily and have generous credit lines. Prices fluctuate rapidly and it is very risky to hold inventory very long, but if I see an extremely good bargainâ¦then I will stock up for the next season occasionally. I have learned that the key is to spend my time looking for good value on my inventory because the potential buyers and sellers are always there if I do this. Some days are busy. Some days are slow. Some days I make a profit, some days I am in the red. Just like Wal-Mart.
SunTzu said. III.18. Hence the saying: If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle. You are wrong, you need to know the markets and know yourself.
No thank you. The market is a rational place, explicable by rational understanding, open to logical analysis and a willing cornucopia but only to those who can master its field of play. Period.
Ok I finally found the post I was looking for. This is one of my favorites from an ET poster named "lilduckling". If you are having problems....or have no clue about the markets whatsoever.....this may help you, i can relate. First off, i am a new trader also.....i believe i have the record for being the dumbest, most foolish person ever to take up this profession. If you are starting out like i did...take heed...there is hope! I started this 2 years ago. And most of that time, i've been trying to figure out why so many people fail at this. To give you an idea how out of it i was...i figured all you needed to make money in the stock market was an account, a computer, and online access and thats it...you can just quit your day job and start raking it in. (I quit my job) You can imagine to my horror and disbelief when i began reading that it doesn't take a few months to learn the ropes....but years. Worse yet....95% of everyone that starts this...eventually will fail. I was so heart broken i wanted to unplug the computer and close my account ....never to think about trading again. But for some reason i decided it was better to try and fail, then to never to have tried. So if you ever plan on making it someday...you must have the heart for it. OK............heres the deal, the markets are like lions, they are not good nor evil, they just simply feast on the weakest prey. Your job is to stay hidden in the tall grasses long enough so that your lil legs build enough strength so that you can run and keep up with the herd....thats how you will learn! What i mean by this is....risk control....money management...its simple math!! In the beginning, sound money management is not just important....its critical to keep you in the markets until you acquire enough experience to make some money. Forget about making money in the beginning....you need to worry about your money management. I cant stress enough how important this is. Its because of sound money management im still here today. RULE #1: Losses....you must not fear them, or it will mess with your mind...clouding your judgement. RULE #2: Losses....you must fear it like the wrath of God!....or you will be out of this game before you even see it coming. I remember one of my first trades i made....i had no clue...after i figured what button to hit to buy a stock...i promptly saw my stock take a dive....i was down $1000.00 in 10 minutes...then $2000....$3000....after about 30 minutes i couldn't take the pain any more got out with a $4200.00 loss. Odd.....i remember afterwards not being overly concerned about what just happened.... i remembered reading an article about Dan Zanger on how he commented that everyone should wipe out at least once if they are ever to go on and become great traders. I figured "cool" im on my way to greatness............................i was fool. NOTHING, NOTHING is more important that capital preservation!! Once its gone....you're out! You need to stay alive long enough to learn this game..... only way to do it is with strict sound money management....and the discipline to follow it. Listen....this is so important....i had 14 losing months in a row......last 3.5 months was able to win back ALL my money i had lost plus tack on a few grand on top! WOW my batting average must be like 80 or 90% lately right?......its only 42% folks. Forget the idea that you need to have a high batting ave to make $$....someone with a 30% BA can clean the clock out of someone with 70% BA!! Its a combination of both BA and win/loss ratio that matters.....and something you will never stop trying to improve. It can only be done by sound money management! (During the 14 losing months....i never risked more than .02 to .04% of my capital....swing trading.) Yes...losses are part of making money....but ONLY when its an acceptable predetermined amount outlined in your trading plan. I don't have to tell you that before you enter a trade, you should have a predetermined entry, stop, and target, don't TAKE THE TRADE IF IT doesn't FIT YOUR MONEY management PLAN! EX:...Risk/reward ratio...is it acceptable? Position size........can i buy x amount of shares with this stop size? You need to have a max amount of $ your willing to lose for that trade...AND max amount of shares you can buy depending on stock price. Just because your plan calls for a stop loss no more than say...$200 per trade, doesn't mean you can always risk that amount, you may have to scale back depending on price of the stock for safety. (Ex: $20 stock gapping against you 10% one morning...vs a $80 stock gapping against 10% . Your trading plan should have all these rules laid out before hand. If you find these rules to be boring or unnecessary.....you will be the lamb walking towards the lions mouth. I could go on and on about money management..... Next;....looking for / asking around older, successful traders for their exact specific way they make money.....FORGET IT! I remember being in some chat rooms...some traders would be making 10k or 25k in a week.....they wouldn't give me the time of day. They ones that were nice enough to talk would always say the same thing......"you must find a method/ style that works for you"......SCREW THAT.....its working for you.....your making tons of money with it...tell me...tell me!! I just didn't understand.................... I didn't understand what was meant by finding a method that works for you...not someone elses. Just like i didn't understand why for 14 months i couldn't make money...at best come close to break even.....(not realizing how lucky i was to be using sound money management which always kept my losses tiny.) Just like i didn't understand that buying more monitors....using more sophisticated platforms (when the one i was using was already over my head)....would NOT be the trick to money coming in. Everyone thinks...processes information differently.....what works for one guy may not work for you! Its true....YOU MUST FIND THE METHOD / SYSTEM WILL WORK FOR YOU! The biggest obstacle in the way....is that you have to try so many different things to find the right one for you.....while trying to survive the mind games that are played everyday. Markets will make you sell when you should be buying....buy when you should be selling...etc. (After i got out with that $4200 loss....the stock rallied right back up!) The market is covered with traps for newbies! If....and only If, you survive long enough and become wise to the markets little tricks and traps...guess what...market has more sophisticated high-end traps for you....its an endless cycle....no one ever stops learning....if you think you figured out the markets and don't need to learn anymore...you will be left behind....quickly. The road to becoming consistent is very long and difficult. I have almost 4 wining months in a row that are winners......thats not consistent.....4 months isn't squat. Its not even a spec.....think about that if you just entered the markets for a few weeks or months. Its sooo tedious in the beginning....boring paper trades...by the hundreds for months at time.....while hearing how everyone else but you is making money.....you must have the heart and the patience to do the work in the begning. Only a fool jumps right in expecting positive results. Even if you had the best computer...the best broker...the best platform...knew all the chart patterns...YOU WOULD STILL LOSE....because you would be lacking the experience. If your just starting out...and you already found this site ......your very lucky. This is an important site. Why?....Because it has resources that allow you to see and evaluate so many things at once. It prevents you from getting an early idea or method implanted in your head like a baby duck (a reference in one of the Market Wizards books) and believing thats the only way....and not be able to adapt or change with conditions later. Its fatal. Its what almost happened to me................hence my screen name I recommend all new traders help other new/ or newer traders...give them a guiding hand...you will be helping yourself more than you realize. So......after 2 years of trading whats constantly on my mind??? 95% of everyone that tries this fails. Hope some of this was helpful to you new traders. http://www.elitetrader.com/vb/showthread.php?s=&threadid=52060
Sure, you don't remember the tech bubble.... But if you count the madness of the masses as rational, I agree...