There are two things that are absolutely critical: You must have confidence, and you have to be willing to make mistakes regularly; there is nothing wrong with it.
– Bruce Kovner
On September 28, 2009, In Thought of the Day, by ElfLord
On September 28, 2009, In Good Articles, by ElfLord
FROM DRUGS TO drag racing, slot machines to Sycamore Networks (SCMR), we are a species that loves external stimuli. And when it comes to investing, seek and ye shall find. With a casino of stocks, options, exchange-traded funds, mutual funds and futures out there, there are more than a few places to find fast action. The problem is, fast action is usually losing action.
Patience is always a virtue, but in trading it’s a requirement. Despite the fact that traders are often thought to be constantly jumping in and out of stocks, the real money is made by holding on for the big moves. In trading as in life, good things come to those who wait.
So although I am a trader, I want to play the major moves. Short-term fluctuations are fodder for the talking heads, but trying to constantly scalp a half point out of a news headline is usually more trouble (read: risk) than it’s worth. My own results improved substantially once I stopped making big bets on small movements and focused on the converse. Small bets on big movements make much more sense. (more…)
On September 27, 2009, In Thought of the Day, by ElfLord
When initiating a trade, enter as if it has the potential to be the biggest trade of the year. In other words, plan your trade. Don’t enter a trade until it has been well thought-out. Devise a campaign for adding to the trade (pyramiding). Set contingency plans for exiting the trade. Unless, of course, you need to lose money.
– StoryTeller, TMF Boards
On September 26, 2009, In Thought of the Day, by ElfLord
The trouble with self-fulfillment is that many people have a self-destructive streak. Accident-prone drivers keep destroying their cars, and self-destructive traders keep destroying their accounts. Markets offer unlimited opportunities for self-sabotage, as well as for self-fulfillment. Acting out your internal conflicts in the marketplace is a very expensive proposition.
Traders who are not at peace with themselves often try to fulfill their contradictory wishes in the market. If you do not know where you are going, you will wind up somewhere you never wanted to be.
– Alexander Elder, Trading for a Living
On September 25, 2009, In Thought of the Day, by ElfLord
It is precisely when the market looks worst that the opportunities are best; precisely when things are good again that the opportunities are slimmest and the risks greatest.
– Andrew Tobias, The Only Investment Guide You’ll Ever Need
On September 25, 2009, In Good Articles, by ElfLord
MORE THAN CRUDE OIL or corn, gold or gas, the scarcest and most valuable commodity we hold is our time on this earth. And while longevity is a highly prized asset, it is, alas, one in which we can’t effectively hedge. We are all options. All wasting assets. There’s an expiration day with each of our names on it.
And while the length of our lives is somewhat arbitrary, the focus of our attentions is decidedly within our control. Our lives are ours and ours alone. Each precious moment is ours to spend as we wish.
And because there are only so many hours in the day, both our time and conscious attention carry a high price. What makes your attention so valuable is that capturing it is the only way that I, or anybody else in advertising, can encourage you to make a purchase decision. From stocks to shocks, lox to clocks, it’s hard to buy something you’ve never heard of.
Did I just say that I was in the advertising business? You bet. As a trader, I can buy a stock and hope it will go up, or I can buy a stock and help it along the way. You do this by moving the market and advertising the attractiveness of your position. Allow me to explain. (more…)
On September 24, 2009, In Thought of the Day, by ElfLord
Before you enter any trade, think that you will have to explain this trade to the world in a case study format. Trade as if the world was standing behind your shoulders.
– Tony Oz, The Stock Trader