.Backtest a system.Whenever u build a system,backtest it to atleast 150 days of intraday data. .

Use Market Profile to judge the condition of demand and supply. .Use statistics and probabilty to the software packages like Amibroker or Tradestation or Metastock. u sharing ur system would not make u loose money..i gain or not is different..it all depends on how well i adopt to ur system..a system might be good but adoption might not be..that decided whether u loose or u gain sanmen > I was saying that sharing a system the public will weaken the system.

1. Beware of acting immediately on a widespread public opinion. Even if correct, it will usually delay the move.

2. From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases. 3. Limit losses and ride profits, irrespective of all other rules. 4. Light commitments are advisable when market position is not certain. Clearly defined moves are signaled frequently enough to make life interesting and concentration on these moves will prevent unprofitable whip-sawing. 5. Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.

Every winner needs three essential components of trading: a sound individual psychology, a logical trading system and a good money management. These essentials are three legs of a stool remove one and the stool will fall together with the person who sits on it.

Losers try to build a stool with only one leg, or two at the most. They usually focus exclusively on trading systems. Your trade must be based on clearly defined rules. You have to analyze your feelings as you trade, to make sure that your decisions are intellectually sound. You have to structure your money management so that no string of losses can kick you out of the game.

WISDOM QUOTE: Hide your smile when people around you are sad and hide your sadness when people around you are happy. Then, your life remains always respectable."

Get Out When Youre Wrong

Successful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when theyre wrong. Being right is not the problem. What you do when youre wrong is the crucial issue. There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way. Most traders average down and wait for the market to turn their way. Trading my way, I always have defined amount of money that I am willing to lose. I let the market decide how much money Im going to make.

WISDOM QUOTE: " Don't be like the Key-holder who carries the key but never
opens the door. You are the key, the very solution to the world's problem. You bear rule. Don't look down on yourself."

Human emotion is both the source of opportunity in trading and the greatest challenge.

Master it and you will succeed.

Ignore it at your peril.

WISDOM QUOTE: " Always remember God's will, will never take you to a place where His grace won't protect you."

. Anything can happen. 2. You dont need to know what is going to happen next in order to make money. since you cant know what is going to happen...everybody has to make money under the condition of uncertainty. without exeption. 3. There is a random distribution between wins and losses for any given set of variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing happening over another. 5. Every moment in the market is unique.

From 815.........2375 in just

13

DAYS !!

Fibonacci ....NUMBER 13 !!
WISDOM QUOTE: " For the wakeful one whose mind is quiet, whose thoughts are undisturbed, who has relinquished judgment and blame, there is no fear."

Trading too much Traders that do this have some personal need to "conquer" the market. The sole motivation here is greed and about "getting even" with the market. It is impossible to get "even" with the market.

Wishing, hoping, or praying Do this in church, but leave this out of the market. Traders do not take control of their trades and cannot accept the present reality of what's happening in the market. WISDOM QUOTE: " You can sit there and talk about all the bad things that are happening, or you can do something. I'm trying to do something."

Its time to sell a stock when: 1. It reaches its target pricehowever, be sure to adjust the target price as company fundamentals evolve. 2. It makes you an offer you cant refusesuch as a sudden price rise on news that may or may not pan out. 3. You realize you made a mistakeeven diligent analysis can turn out to be wrong. 4. You find a better relative value elsewhere a stock trading at a smaller percentage of estimated value provides a better margin of safety than a stock you own that has already risen and is close to its estimated worth.
WISDOM QUOTE: " You can sit there and talk about all the bad things that are happening, or you can do something. I'm trying to do something."

1) Think in terms of the long run when trading. 2) Avoid outcome bias. 3) Believe in the effects of trading with positive expectation. 4) The secret of trading and of the Turtles' success is that you can trade successfully by using ideas and concepts that are well known and have been around for years. But you have to follow those rules consistently. 5) Trade with an Edge : Find a trading strategy that will produce positive returns over the long run because it has a positive expectation. 6) Forget the past, don't berate for mistakes you made.Avoid recency bias.The ability to avoid recency bias is an important component of successful trading.

-Always live to fight another day -Entries must have a statistical edge -Patience and discipline -Be a jellyfish (swim with the current) -Trade only liquid securities -Focus on trying to capture the middle 80% of a move -Know your exit points when you open a position (and stick to them!) -When in doubt, reduce position size by 50% -Limit losses to 2% of total equity for any single trade -Start each day with a clean financial and emotional slate The above list is relatively generic, but it helped provide me with a framework for organizing how I would approach trading as a business, what strategies I should adopt, how those strategies should be executed, and ultimately defining what success should look like.

WISDOM QUOTE: "Every day, ordinary people prove that cynicism is a

deplorable lie. Stories of courage, heroism, self-sacrifice, and compassion inspire and elevate us because they confirm our extraordinary capacity for nobility."

Remember, the market is designed to fool most of the people most of the time. Sometimes, the market will go contrary to what speculators have predicted. At these times, speculators must abandon their predictions and follow the action of the market. Never argue with the tape. Markets are never wrong, but opinions often are. I only try to react to what the market is telling me by its behavior.------

Jesse Livermore

WISDOM QUOTE: " The two things that cannot always happen: The thing you want and the thing which you think is good for you."
WEDNESDAY, MARCH 25, 2009

The Challenge of Market Engagement

A very experienced trader I was meeting with at a prop firm in Chicago mentioned the challenge of "sustaining your engagement" with markets. His phrase so caught my notice that I whipped out my laptop (thank goodness for wireless broadband) and posted a note to Twitter on the topic, along with a

link to a relevant blog post. What does it mean to "sustain your engagement" with markets? Many of the traders at this firm will place 100 trades or more per day. To put that into perspective, the stock index futures markets are open from 8:30 AM CT to 15:15 PM CT. That's a little less than seven hours. The trader who places 100 trades in a day is averaging about 15 trades an hour or a trade every four minutes. The only way you can trade with such frequency is if you have a very low commission structure (a very major advantage of prop firms that are exchange members), superior technology (getting orders into the book quickly can make the difference between getting filled and not getting filled), and an ability to concentrate on--not just the tick by tick movement of prices--but the movement of orders in and out of the book. It's not just paying attention that matters; it's an active processing of information, in which the trader is alert to minute events, such as a series of large trades that are lifting offers. In a flash, the trader sees those transactions, realizes that they are occurring at a key price level, and places the action in the broader context of the day structure (trending/non-trending). Little wonder that my trader performance book (which features two traders from this firm) compares active electronic trading with air traffic control: lots of things to watch continuously, and real risks of lapsed concentration. Think of all the factors that can interfere with this active market engagement: 1) Distractions, from phone calls to conversations around you; 2) Fatigue, and normal lapses of concentration after long periods of focus; 3) Frustration following bad trades, missed trades, and difficult markets; 4) Worries about losses during slumps; 5) Overconfidence following profits during hot periods; 6) Information overload; 7) Getting caught in fixed views of markets; 8) Equipment failure; 9) Boredom during slow markets;

10) Tunnel vision and loss of big picture perspective Active traders need strategies that they can use during the trading day to help them sustain their market engagement. My next post in this series will outline some of these strategies.

RELEVANT POSTS: Self-Regulation and Biofeedback The Most Important Psychological Trading Skill

Do not blame anybody for your mistakes and failures. Never follow the crowd. Every man has a right to be wrong in his opinions. But no man has a right to be wrong in his facts. Take the obvious, add a cupful of brains, a generous pinch of imagination, a bucketful of courage and daring, stir well and bring to a boil.

A speculator is a man who observes the future, and acts before it occurs.
I'm not smart, but I like to observe. Millions saw the apple fall, but Newton was the one who asked why.

WISDOM QUOTE: " Every day, ordinary people prove that cynicism is a
deplorable lie. Stories of courage, heroism, self-sacrifice, and compassion inspire and elevate us because they confirm our extraordinary capacity for nobility."

When I get hurt in the market, I get the hell out. It doesn't matter at all where the market is trading. I just get out, because I believe that once you're hurt in the market, your decisions are going to be far less objective than they are when you're doing well... If you stick around when the market is severely against you, sooner or later they are going to carry you out. I'll keep reducing my trading size as long as I'm losing... My money management techniques are extremely conservative. I never risk anything approaching the total amount of money in my account, let alone my total funds.

WISDOM QUOTE: "Two people can have the same circumstances, but they pull different meanings from it, and therefore a different set of emotions, actions, and a different life."

Discipline and Comfortable With Yourself

You dont need complicated Einstein formulas to make money in the markets. You do need to be disciplined and comfortable with yourself. No matter how good of a trader you think you are, the markets are always going to screw with your head and test your mental fortitude. Remember, the survivors are also the ones who make up the markets success stories.

Just u need these two thing and u can also Mint unexpected Money. -Always remember ...Future Trading is not Day TradingWISDOM QUOTE: "Life is not what it's supposed to be. Its what it is. The way you cope with it is what makes the difference."

"Common Mistakes in Trading"

Four 4-letter words that will kill you! HOPE--WISH--FEAR--PRAY

If you ever find yourself doing one or more of the above while in a trade then you are in big trouble! Markets has own system of moving up & down. All the hoping, wishing and praying or being fearful in the world is not going to turn a losing trade into a winning one. When you are wrong just use a simple 4-letter word to correct the situation-GET OUT! WISDOM QUOTE: "Happiness always looks small while you hold it in your hands, but let it go, and you learn at once how big and precious it is."

Proper money management is essential for successful trading. A disciplined trader cuts his losses short and outperforms a loser who keeps hanging on and hoping. As soon as you buy, place a stop-loss order. Greed and fear destroy traders by clouding their minds. The only way to succeed in trading is to use your intellect. The goal of a successful trader is to make the best trades. Money is secondary. If this surprises you, think how good professionals in any field operate. Good teachers, doctors, lawyers, farmers and others make money - but they do not count it while they work. If they do, the quality of their work suffers. Serious traders place stops the moment they enter a trade. We all like to hope that a trade will succeed - and a stop is a piece of reality that prevents traders from hanging on to empty hope. Learning to place stops is like learning to drive defensively. A stop is not a perfect tool but it is the best defensive tool we have. WISDOM QUOTE: " I will! I am! I can! I will actualize my dream. I will press
ahead. I will settle down and see it through. I will solve the problems. I will pay the

price. I will never walk away from my dream until I see my dream walk away: Alert! Alive! Achieved!"

A nice piece on trading psychology. An excerpt: Ervolini says market losses affect the brain in the same way excrement or a foul smell does. We recoil without thinking, as if were confronted with a disgusting and possibly harmful physical presence. This reaction stems from our unconscious desire to immediately end the pain. The experience of losing $1 is three times more emotionally impacting than the experience of winning $1, Ervolini says. We learn more intensely when we lose. Because the pain of loss is so much greater than the joy of gains, which Ervolini says affect the same parts of the brain as sex and certain narcotics, people are more likely to hang onto losing investments as they drop and to sell winners before they should. The joy of riding an investmentn the way up isnt enough to overcome the fear we have of losing money if it turns. If it goes up $3, but then drops $1 from its high before we sell it, we feel pain even though were able to sell at a profit. That $2 net gain just isnt enough.

WISDOM QUOTE: " The purpose of forgiveness is to allow yourself the

permission to move on without the hurtthe memory lasts as a reminder not to allow the hurt back in."

The hardest lesson I have had to learn is to "Act in my own best interest". And to overcome and correct things like: 1) trading without a stop 2) refusing to admit I am wrong and to get out of a losing position 3) trading for the sake of trading 4) chasing entries (going long on the top tick, shorting on the bottom tick) 5) revenge trading (after a series of losses) 6) trading while sick or tired 7) trading without a plan (entry, exit, money management rules) 8) ... Anytime that I am in a position and either don't know why I am, or what my profit target is, or what my stop loss is, etc. - I am not acting in my own best interest and have always struggled to close out the position immediately. The times I have without any further hesitation, it turned out to be a wise choice and saved my butt from significant losses (more so than I already incurred). The bottom line is that you will do much better in this profession if you can answer YES to the question - "Am I acting in my own best interest"?

WISDOM QUOTE: " When you want something, all the universe conspires in
helping you to achieve it."

1. Need to internalize lots of trading simulation of specific set-ups in real-time to trade effortlessly 2. Need to trust money management system to weather +10 losses in a row 3. Tuff to internalize that its the 5-6 huge monthly runners that is the big pay-off days 4. Must master +3 trade set-ups to make money consistently month to month. 5. It takes considerable time to mathematically think and act like a trader 6. Trading is a performance skill which requires mastery of every element of trading 7. It requires time capital and considerable effort to achieve the experience to make it effortless and automatic 8. It takes several attempts at different trading methodology to sync with a trader's personality and cognitive strengths 9. It takes time to set and internalize specific rules that embed a sense of mastery 10. To survive in trading requires weathering the lengthy learning curve

WISDOM QUOTE: " Happiness is a state of mind. How you feel and how you
behave is how you think. So just change your thoughts and you will be happy."

Be intellectually honest
When you are wrong admit it , learn from it and go on to the next trade. The market rewards intellectual arrogance with losses and pain. If you want to stick to your point of view no matter what the evidence may be to the contrary become a politician.

Be patient
The more profound your ideas the longer it will take for others to see them as well and thus the longer it will take for markets to move your way. Be patient and give yourself and your trades time.

WISDOM QUOTE: "Happy are those who dream dreams and are ready to pay
the price to make them come true."

Hope, Fear and Greed

The spectator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you, you hope that every day will be the last day and you lose more than you should had you not listened to hope. And when the market goes your way you become fearful that the next day will take away your profit, and you get out too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.

WISDOM QUOTE: " Without inspiration, the best powers of the mind remain
dormant. There is a fuel in us which needs to be ignited with sparks."

Trading in Your Zone

Heres is a link to an interview with Mark Douglas covering the topic Mind Over Markets. Well worth the 53 minutes of viewing time if your goal is to consistantly peel profits out of the markets. Click here to watch.

WISDOM QUOTE: " Your strengths are what define you... use them to make
others stronger and you will grow."

WISDOM QUOTE: " Success is not secret; it is a system of your life."

To train your emotions, write down the reasons for making every trade. When you lose, write down what you thought contributed to the loss. Then study and set new rules to avoid making those same mistakes Trade only when the environment is in your favor. Darvas strategy kept him out of poor and bear markets because he wouldnt trade stocks that didnt fit his requirements which were only found in raging bull markets Be aggressive when warranted. Darvas believed in making aggressive trades when his system pointed to a great trade. In fact, sometimes 50% of his capital was devoted to just one stock While his trading approach was very technical, after studying the markets winners he understood the relevance of finding stocks also with good fundamentals. Namely, Darvas thought that earnings and the future estimate of increased earnings were very important

Always remember...no force or single person can move stock.Its a game of mass psychology.We look at chart ,collect information and just spread it ...................free of cost WISDOM QUOTE: " Fear and success go hand in hand. The secret is having the
courage to face your fears to accomplish greatness, and letting fear guide you in through all adversity."

A successful speculation is "a man who observes the future and acts before it occurs." Acting swiftly in the market is important. Be honest with yourself and expect to be wrong as many times as you are right. "If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong." Cutting losses quickly was THE most important trading rule. If your stocks are keeping you awake a night worrying about them, you should sell them to a "sleeping point." According to Baruch, the stock market does not determine the health of the economy but "rather reflects it." The ability to understand this is an important skill.

WISDOM QUOTE: " There is no greater sin than desire, No greater curse than
discontent, No greater misfortune than wanting something for oneself. Therefore he who knows that enough is enough will always have enough.

It was the same with all. They would not take a small loss at first but had held on, in the hope of a recovery that would let them out even. And prices had sunk and sunk until the loss was so great that it seemed only proper to hold on, if need be a year, for sooner or later prices must come back. But the break shook them out, and prices just went so much lower because so many people had to sell, whether they would or not.

WISDOM QUOTE: " To be able to practice five things everywhere under heaven
constitutes perfect virtue... gravity, generosity of soul, sincerity, earnestness, and kindness."

To be successful, a trader must be patient. A successful trader lets winning positions run, but is able to swallow his pride and close the trade when it isn't working. Patience means knowing how to be resilient, courageous, and disciplined when the markets go against you. Speculation is an intricate dance between risk and reward. We are all speculators, except when we lose - then we are all gamblers. Playing the market is the hardest way to make an easy living. Flow with the markets directions. The market is our teacher, and it pays to listen. The market never lies.
The keys to success are an accurate analysis, a willingness to take risk, and the ability to act. The more objective and the less emotionally involved you are, the more successful you tend to be.

WISDOM QUOTE: "Today it's teary and tomorrow it's cheery yet God is taking
them both to remind me He's sovereign and always doing new things and nothing precedes Him."

The great Jesse Livermore once said that it is not our duty to trade upon the bullish side, nor the bearish side, but upon the winning side. This is brilliance of the first order. We must indeed learn to fight/invest on the winning side, and we must be willing to change sides immediately when one side has gained the upper hand. Once, when Lord Keynes was appearing at a conference he had spoken to the year previous, at which he had suggested an investment in a particular stock that he was now suggesting should be shorted, a gentleman in the audience took him to task for having changed his view. This gentleman wondered how it was possible that Lord Keynes could shift in this manner and thought that Keynes was a charlatan for having changed his opinion. Lord Keynes responded in a wonderfully prescient manner when he said, "Sir, the facts have changed regarding this company, and when the facts change, I change. What do you do, Sir?" Lord Keynes understood the rationality of trading as a mercenary guerrilla, choosing to invest/fight upon the winning side. When the facts change, we must change. It is illogical to do otherwise.

WISDOM QUOTE: "Never, if possible, lie down at night without being able to
say: I have made one human being, at least, a little wiser, a little happier, or a little better this day."

SUCCESSFUL TRADING

Successful trading has absolutely nothing to do with making money and everything to do with trading successfully. Making money will only ever be a by-product of successful trading. Successful trading is not a by-product of making money. When you attach trading to money and money to emotions and emotions to money you'll have taken your first loss but you won't know it yet. WISDOM QUOTE: "To live in the presence of great truths and eternal laws, to
be led by permanent ideals - that is what keeps a man patient when the world ignores him, and calm and unspoiled when the world praises him."

Do u remember from...What level we are Bullish ? -Do u know @ 2650 indicated price target of 2950 -Do u remember....we were writing about TRIANGLE Breakout.. Yes ,Height of Triangle was :804 points.

1)Our Target after Triangle Breakout was :

3754

(At 2950 level.....we had written this level of 3754,already NF had kissed 3728 in Yesterday's trade )

2)1:1 Ratio :3566

(This we had written..when it crossed 3299 level )

3) 1.618 Ratio :4227

(Now ,What is 1:1 & What is 1.618 ....if u know Elliott wavethen no problem for u ) -So above are three Targets :We can see very soon. -Believe it or Not...........This is corrective Rally onlyDon't Forget & Don't Ignore : GAPS on NF chart.

Already

GAPS !!

Triangle Target intact :3754

(Day before Yesterday already kissed 3728.....Do u know from what level we were barking that NF will kiss 3750 ?????????? )
Goal Setting - As Important as your trading plan Page: 1 by Don Dawson - May 4, 2009 8.2 (from 9 ratings) Every year at New Year we hear of people making resolutions of all varieties. Have you ever noticed that these resolutions are usually made without any serious thought or planning involved? This is the difference between a resolution and setting goals. Goal setting is:

A focused plan based on proven methods to achieve desired results A predetermined set of rules and regulations

We often hear about having a trading and or business plan to succeed in trading. Then comes the education needed to be successful. Before long we are at the screens trading for a living. Day in and day out we follow all our rules and can actually see our account size growing. We are enjoying our trading career for all that it has to offer. Then, one day you ask yourself, "Where is this taking me and how long should I expect it to take?" The trading career is one of the most unstructured endeavors we can partake in. This is why we need rules and plans to allow for the needed structure to survive. Something we all need to succeed is motivation. Motivation can come from setting goals. Without goals we are just aimlessly drifting through life with no actual destination. Much like a sailboat at sea with a broken mast, not sinking, but not able to navigate its way back to a safe port either.

People talk about their resolutions to lose weight, find a new job, strive for happiness or perhaps start their own business. However, they don't have specific plans to accomplish those resolutions, so they rarely achieve them. If you would like to set some obtainable goals this year, I have listed a few guidelines below for goal setting success.

Choose a goal that you truly want to accomplish: Perhaps setting a goal to treat your trading as a business instead of a hobby. You must be willing to give your new business 100%. Trading takes a huge commitment to be successful. You have to want to succeed! Set specific goals: Saying you want to learn how to trade is too general of a goal. Be more specific such as, "I want to have a trading strategy that fits my personality and risk tolerance." Also, "I want to understand every aspect of my trading plan." Set goals that correspond with your other goals: If you set one of your trading goals to make enough money to put say $60,000 towards your retirement, then don't have another goal that will have you spending excessive amounts of money. Make sure each goal supports the other. Make goals challenging: We learn and grow in life by facing different challenges. Set your goals to challenge yourself. This makes us "reach" for that next rung on the ladder, thereby driving us to succeed. List your priorities: Make a list of all of your goals and decide which ones are your top priorities. Think of your priorities in an order of big rocks, medium rocks, small rocks and sand. Then envision a container (your list) you will be storing these priorities in. Place the big rocks in the container first (they take up the most room), then carefully place the medium rocks in on top of the big rocks, followed by the small rocks. This takes care of your bigger priorities by making sure they are in order and all fit nicely with your goals. The left over sand, your very small priorities not having much significance but still needing your attention,

can be "poured" in over the bigger stones and the sand will fill in the extra space in your container. In trading, your priorities could be items such as continuing education, diversification of your winnings to create new revenue streams, keeping up with technology, networking with fellow traders, keeping your trading plan/journal updated, balancing your family life with your trading life, etc. List each of your goals: As a reminder, you should write down your goals in places that will encourage you to read them on a daily basis. Read them so often that they become subconscious thoughts. Since each goal you have is significant, you must give each energy by "itemizing" them on an index card. Place this card by your bed, on the refrigerator or anyplace you will always see it. Make long-term and short-term goals: If you set goals that are longer than 6 months, make sure you also set some shorter-term goals, also. This will allow you to actually see your progress as you enjoy your journey towards achieving your longer-term goals. Think of the shortertime goals as rewards. We all need to be rewarded for our discipline to follow our own rules. This will motivate us to stay the course for our longer-term goals. Establish realistic goals: Don't make goals that you know are too difficult. This only goes to discourage you right from the beginning of reaching your goals. In the back of your mind you will always be doubting yourself if your goal is too unrealistic. Set smaller goals and as you achieve them and each succeeding goal, you will be compounding your results with more realistic expectations. Set your goals to make a positive statement: Instead of saying "I won't throw things after a bad trade," try to write your goal as, "After a loss I will remember that trading is a probability business and one trade does not make a trader. I have good risk management and this will allow me to come back and trade tomorrow for my chance to make a profit." Visualize your goals: You should be able to see yourself accomplishing your goals and being successful. In the book, "The Secret," the statement goes that "If you can dream it, you can have it." In the trading arena there is little that is not obtainable by us if we "really" want it. Visualizing your success is one of the ways you have for positive reenforcement to achieve your goals.

So next New Year, perhaps you may want to start thinking of some goals for your future in trading. By having dreams and ambitions (goals), we will be more motivated to work hard and diligently each day. Our goals can give us reason to want to succeed in our endeavor of trading. By having a trading plan and goals, we have a much better chance of "loving" what we do as our success grows. "Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful." Albert Schweitzer

Trading has everything to do with personal psychology, rules, systems, discipline, focus and skill. Like anything else that's skill based, once you start it takes time and practice to become skilful. Ultimately trading is about making decisions between two choices, to buy or sell. As simple as these two choices are the variables that effect the decisions surrounding them can be as complex as the human mind can make them. WISDOM QUOTE: "Generally speaking, most people in life and in business do
not follow through. They do not do what they say they are going to do. Become a person who does, and you will separate yourself from the masses."

Payment made on 12/05 11.55PM

We confirm your instruction to make the payment as shown below: Account from which payment is being made Towards Credit Card Number Customer Name Amount to be paid(INR) Transaction Reference Number 59XX9XXX48 4550XXX2XXXX6005 D R RAVIKUMAR 4635.00 9981025256

Your payment will reflect on your Credit Card in 24 hours. Please quote the Transaction Reference Number in case of any queries. Thank you for using Citibank Online.

Be a cynic.
Don't argue with the tape but look at the other side of every coin. I've long noticed that as a group Russian and British traders are better than average. Why? Because by nature they question widely accepted beliefs. New opinions translate to revaluations. Leave your dogma at the door and be open to the unexpected and seemingly illogical. Winning traders have a reason to be in the trade. Even if based on nothing more than a vague, ethereal feel, a good discretionary trader has a profile in his mind and the moment his thesis is no longer provable or valid he is out of the position.

Recognize past mistakes and eliminate them.

This month's Golf Magazine has an article analyzing each shot of Tiger Woods career. Tiger's success is less predicated by the good things he does than by virtue of doing far fewer bad things than other PGA golfers. All of us have a particular bad habit that consistently costs us. You should get an occasional feeling of deja vu when repeating a stressful event. Embrace that personal information as a signal. Your worst habit is potentially your best fade.

WISDOM QUOTE: " It was a high counsel that I once heard given to a young
person, 'Always do what you are afraid to do.'"

I advise you to always use stops. I mean actually put them in, because that commits you to get out at a certain point. Another thing is that if a position doesn't feel right as soon as you put it on, don't be embarrassed to change your mind and get right out. You need discipline, patience, and courage. You must have a willingness to lose, but a strong desire to win. Pride is a great banana peelas are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.

WISDOM QUOTE: "Success is not a game! It is cultivated but can't be

harvested."

Beware of acting immediately on a widespread public opinion. Even if correct, it will usually delay the move. From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases. Limit losses and ride profits, irrespective of all other rules. Light commitments are advisable when market position is not certain. Clearly defined moves are signaled frequently enough to make life interesting and concentration on these moves will prevent unprofitable whip-sawing. Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.

WISDOM QUOTE: " Generally speaking, most people in life and in business do
not follow through. They do not do what they say they are going to do. Become a person who does, and you will separate yourself from the masses."

I dont know what the market will do next. I dont have to know how I will react to anything the market does. I am confident in my ability to react correctly. I have a strategy that works and the discipline to carry it out. I am independent-minded. I dont trade to please others. I am self-reliant. I question any trade I take, but I dont question my ability to make the right decisions. I trade effortlessly and automatically. I manage risk and assume losses. I trust myself.

WISDOM QUOTE: " When an egg breaks by a power outside, a life ends. When
an egg breaks by a power inside, a life begins. Great things always begin from the power inside!"

WISDOM QUOTE: " Knowing one's ability may be the key to overcoming one's
disability."

I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just luck. Rather your position is most likely correct and should not only be held but perhaps added to. -Apart from Minting unexpected money in NIFTY FUTURE...From last 3 days we are getting more then 500-700 mails everyday and everybody thanking us for these stocks.
When u are Getting Free calls with accuracy of more then 80% +.....Sometime our stock fails...but then we give stop & resistance levels too. Always remember...no force or single person can move stock.Its a game of mass psychology.We look at chart ,collect information and just spread it .......free of cost. Always Remember :Never pay money to anybody ..who is asking for it.Just ask any Analyst (TV ,Media ,Print or Website wale Analyst ko pucho............What is their success ratio in Day trading???A Million $ Question ...Doing Bla-Bla on TV ,writing on web is very easy......but while u trade .....u are playing with live wire

Don't ask our FEES or Consultancy charges............!!! We Don't take FEES or make paid Subscribers. Yes ,taking FEES/Consultancy...its Illegal in INDIA

WISDOM QUOTE: " Have great hopes and dare to go all out for them. Have
great dreams and dare to live them. Have tremendous expectations and believe in them."

The difference is that some traders guess market direction without any real plan or guidelines for formulating that decision, with an inadequate appreciation of both risk and opportunity and with an undisciplined, unprofessional and emotionally influenced execution of their trade. And their losses feed the account of those who guess market direction based on a documented, tested and proven plan which is designed to contain risk when they're wrong and maximize opportunity when they're right, combined with consistency in execution of their plan.

WISDOM QUOTE: " Your hopes, dreams and aspirations are legitimate. They
are trying to take you airborne, above the clouds, above the storms, if you only let them."

WISDOM QUOTE: "Instead of thinking about where you are, think of where you
want to be."

WISDOM QUOTE: "Do not view the word through the lens of the world but view
the world through the lens of the word."

To be successful the most important rule is to strive for success. This means you must exert effort and put a lot of hard work into your effort. You must have both the short term and long term charts necessary for trading the markets you trade. They must be always up-to-date and you need to watch them on a daily basis so your mind gets use to their price and time movement. You will then learn the secret of trading and see how the entire price movement continually evolves.

WISDOM QUOTE: " Do not view the word through the lens of the world but
view the world through the lens of the word."

Trade in Private

Never under any circumstances reveal your trading positions to anyone. Your mind must be in complete harmony with your trading positions. When you reveal your positions to someone, they will immediately start to question the trade and start to erode your confidence and concentration in the trade. You will then be a less effective trader and eventually lose.

WISDOM QUOTE: "It isn't always enough to be forgiven by others. Sometimes

were too stubborn to realize it, but we also have to forgive ourselves."

I am currently reading a book called The Day Traders by Millman and there's a bit in the book about a broker who kept a diary. This broker said that he realised when his emotions got in the way, his trades then went bad. However, when he was objective and mechanistic.. he done well. Markets can only go up, down or sideways.... and with a bit of money management you should be able to do ok even if you chance it each time... however, still, 90% people lose. It's the fear and greed emotions into play and cause you to lose!! WISDOM QUOTE: "Yesterday's history... today ain't no more a mystery...
tomorrow lies my destiny... I'm movin' ahead!!"

Trading has everything to do with personal psychology, rules, systems, discipline, focus and skill. Like anything else that's skill based, once you start it takes time and practice to become skilful. Ultimately trading is about making decisions between two choices, to buy or sell. As simple as these two choices are the variables that effect the decisions surrounding them can be as complex as the human mind can make them. WISDOM QUOTE: "Create a life that fits your dreams and you realize your true
soul path and embark on a spiritual journey that nourishes the sacred and embraces the immortal."

In his wonderful book, Pit Bull , Marty Schwartz tells several stories of the times he lost money because his ego got in the way. In the end he has this to say about ego: "I've said it before, and I'm going to say it again, because it cannot be overemphasized: the most important change in my trading career occurred when I learned to DIVORCE MY EGO FROM THE TRADE. Trading is a psychological game. Most people think that they're playing against the market, but the market doesn't care. You're really playing against yourself. You have to stop trying to will things to happen in order to prove that you're right. Listen only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you're right, but to hear the cash register ring."

WISDOM QUOTE: " Your life takes on meaning when you acknowledge your
being and share yourself with others; for no man is an island and God's reflection is through his people... so share yourself."

WISDOM QUOTE: "Life's great moments usually come from doing something
we fear at that moment. And at that very moment, we stepped right up to face that battle. Are you ready to step up?"

Your job is to learn to trade before your capital runs out. The Risk of Ruin, however, increases exponentially for those traders who :

Hesitate to pull the trigger; Enter too high for longs and too low for shorts; Are paralyzed by over-analysis; Can't stay in a winning trade; Can't take a loss in stride and keep losses small; Overtrade and "Revenge" trade; Compulsively trade against the trend , and Can't seem to learn from mistakes. WISDOM QUOTE: "There's no such thing as perfection. But, in striving for
perfection, we can achieve excellence."

Everything in this world involves risk but by far the greatest risk is staying in your comfort zone because this involves the risks of lost opportunities. The secret to risk lies in knowing how to minimise its impacts on you. If you want to be a successful trader you must become passionate about the learning process. You must become totally focused on trading well as opposed to making money. You must learn from someone who can show you how to trade successfully rather than rely on machines and promises of "golden eggs". You must become absolutely disciplined in the activity of trading.

WISDOM QUOTE: "To live in the presence of great truths and eternal laws, to
be led by permanent ideals - that is what keeps a man patient when the world ignores him, and calm and unspoiled when the world praises him."

Percent Volatility Model

Positions are sized based on each stock's volatility -- the more volatile the stock the fewer shares are traded. The most common cause of trading failure, is the loss of confidence caused by equity draw downs! WISDOM QUOTE: " Issue a blanket pardon. Forgive everyone who has ever
hurt you in any way. Forgiveness is a perfectly selfish act. It sets you free from the past."

WISDOM QUOTE: "Sometimes others can see the greatness in us that we cannot
see."

WISDOM QUOTE: "Confidence is elusive only to those that look for it; for
confidence is not found, it's made."

WISDOM QUOTE: " Imagine a world where no one was offended or hurt by
words. As long as you know your truth, they cannot bring you down."

Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on. Some people say, "I was only playing with the market's money." That's the most ridiculous thing I ever heard. -Bill Lipschutz I basically learned that you must get out of your losses immediately. It's not merely a matter of how much you can afford to risk on a given trade, but you also have to consider how many potential future winners you might miss because of the effect of the larger loss on your mental attitude and trading size. -Randy McKay I take the point of view that missing an important trade is a much more serious error than making a bad trade. -William Eckhardt

WISDOM QUOTE: " Faith is the soil in which we plant our dreams so they can
grow."

Exit any trade that doesnt go your way immediately

Forget about the commission, forget about how many hours you waited for the setup, forget everything except this rule. I know its radical, but just do it.Then YOU will be in control of the one factor that most traders dont believe can be controlled the downside outcome of the current trade youre in.

Every trade starts out as a scalp until proven otherwise.

This means that if you get 2 or 3 ticks gain and the market pauses and moves a tick in the wrong direction, you get out immediately with 1 or 2 ticks gain. No questions asked.

WISDOM QUOTE: " Don't worry about the drop don't worry about 'what if'...
keep God in your heart and a prayer in your mind and nothing will hurt you"

"There is only one side to the stock market;....not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock market speculation."

"People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth." "But I can tell you after the market began to go my way I felt for the first time in my life that I had allies - the strongest and truest in the world; underlying conditions." If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit." My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I'd have been right perhaps as often as seven out of ten times." I know from experience that nobody can give me a tip or series of tips that will make money for me than my own judgement." "A man must believe in himself and his judgement if he expects to make a living at this game."

WISDOM QUOTE: " Let others lead small lives, but not you. Let others argue
over small things, but not you. Let others cry over small hurts, but not you. Let others leave their future in someone else's hands, but not you."

As a trader you must understand that you're the weakest link in the system because the complexity will reside with you. Good systems are simple. They are nothing more than a series of instructions called trading rules. The primary thought that should be central in your mind is that it's the system that makes the money, not you. The more skilled you become at reading market conditions and marrying these conditions to your system the better a trader you'll be. Wealth creation is an uncertain activity for most people and, to do something without certainty of outcome, takes courage. It takes courage to do what the majority is not doing. It takes courage to overcome scepticism and cynicism. It takes courage to deal with fear and overcome fear barriers.

WISDOM QUOTE: " The dream was always running ahead of me. To catch up,
to live for a moment in unison with it, that was the miracle."

WISDOM QUOTE: " You can do anything you think you can. This knowledge is
literally the gift of the gods, for through it you can solve every human problem. It should make of you an incurable optimist. It is the open door."

Successful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when theyre wrong.

Being right is not the problem. What you do when youre wrong is the crucial issue. There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way. Most traders average down and wait for the market to turn their way. Trading my way, I always have defined amount of money that I am willing to lose. I let the market decide how much money Im going to make.

WISDOM QUOTE: "When we shuffle out words in a creative way they become a
pathway for Quotes; similarly, when we shuffle out our positive thoughts creatively, they become a pathfinder for life."

How to Stay Objective in Your Trades

One of the most challenging skills in becoming a successful trader is maintaining objectivity in trades. While there are a variety of factors which contribute to you losing objectivity in a given situation, there is a clear and defined path you can follow to re-gaining it. In simple terms, it is called Thinking Backwards. The Issue More times than not, losing objectivity occurs when you micro-manage a situation. It may be in the form of watching the tape or over-thinking a position but in essence, you lose sight of the MACRO picture or WHY you were in the trade in the first place. As a result, you make poor decisions which generate poor results. How Can you Overcome This? Know your reason WHY? and ask yourself frequently:

Why am I in this trade? Why do I like/not like this position?

These questions will help you to continually clear up your picture as data points (or your own bad habits) attempt to fog up your view. Red Flag The more difficult it is for you to answer your reason WHY, the more likely it is that you have lost objectivity in the situation. The Solution - Thinking Backwards

Acknowledge that you have lost objectivity. Now that you are aware of the problem, you can begin to deal with it. Remove yourself from the day-to-day noise and write down what your original thesis was. Clearing off your mirrors will tell you what direction you are moving in. Begin to "Think Backwards" by creating three columns with the following headings (Support, Do Not Support, Undecided). This will force you to objectively lay out and evaluate the situation. Talk to yourself: "Based on the data points I wrote down in each column, if I did not have a position on, what would I do?" Asking yourself this question forces you to re-evaluate the trade from an unbiased perspective. Compare your response with your original position/thesis to create a WINWIN.

WIN #1 is if there is a discrepancy, you can be proactive in creating a new game plan which may involve taking some or all of the risk off or even reversing the position. WIN #2 is if there is no discrepancy, you have instilled deeper conviction in your original thesis and can then hold or even add to the position. In trading, losing your way is not nearly as important as how long it takes you to get back on course. We all get lost from time to time and the skill of "Thinking Backwards" can serve as your map to re-gaining objectivity in your trades. Doug Hirschhorn, Ph.D. is the Founder and CEO of www.DrDoug.com. Dr Doug is a regular contributor for CNBC, has appeared on NBC's Today, Vh1's The Fabulous Life and currently hosts a weekly video blog for CNBC called Office Hours With Dr. Doug. Dr. Doug's client list includes elite athletes as well as many of the largest banks, hedge funds and financial institutions in the world. Dr. Doug is the author of 8 Ways to Great: Peak Performance On The Job and In Your Life (Putnam, 2010) and co-author of The Trading Athlete (Wiley, 2001). >> See more articles by Doug Hirschhorn Related Articles

Intraday Trading High-Quality Stocks, Part 2 5 Steps to Successful Day Trading, Part 2 2 Ways to Determine Trend Strength 2 Ways to Trade a Pullback

How to Use Average True Range for Short-Term Trading

WISDOM QUOTE: "Only the wise can dance the melody of life. We have to
believe that bad things will happen to us and good things will also happen to us. Believe in yourself, believe in your own power and in your own potential and dance the melody of life."

WISDOM QUOTE: "Nothing is this world is so marvelous as the transformation

that a soul undergoes when the light of faith descends upon the light of reason."

The Union of Opposites

"There should always be respect for the person on the other side of the trade. Always ask yourself: Why does he want to sell? What does he know that I don't?" WISDOM QUOTE: "When we shuffle out words in a creative way they become a
pathway for Quotes; similarly, when we shuffle out our positive thoughts creatively, they become a pathfinder for life."

Many new traders simply aren't emotionally resilient. They lose money on an idea and will quickly abandon the idea, rather than try again with refined timing. They will quit trading and leave the screen after several losing trades or after markets turn a bit slow. Instead of observing markets and maybe paper trading some fresh ideas, they exit the learning process altogether. To be sure, there are risks in being stubborn and revenge trading out of frustration. But many developing traders haven't learned to embrace losses and move on: learn from them, then put them behind. The goal of the developing trader should be to become a lean, mean learning machine. How well are you mentoring yourself?

WISDOM QUOTE: "Once you become aware of what stands in your way and
become willing to release it, you signal the universe that you are ready to manifest the life you were meant to live."

The ability to change one's mind is probably a key characteristic of the successful investor. Dogmatic and rigid personalities rarely, if ever, succeed in the markets. The markets are a dynamic process, and sustained investment success requires the ability to modify and even change strategies as markets evolve. WISDOM QUOTE: "Obstacles are only opportunities to succeed or fail; how we
handle them determines what will happen! "

1) Enter a trade that doesn't take off - cut it. I don't care if it takes off after that. 2) Get a gut feeling that I'm on the wrong side of the market - cut it and reverse. 3) Stopped out twice on the same pair - stay flat and don't trade until tomorrow. 4) In a trade that's running well - only look at it towards end of current session and make a decision to stay into the end of the next one or not. 5) Feeling like a stop out is immanent - cut the trade and save a few pips. I don't care if it turns out I was wrong. 6) Missed the start of a run and its well into it, let it go and wait for another day. 7) In a trade and then get a feeling that I don't know whats going on - go flat and stay out until another day.

WISDOM QUOTE: "Life is not a realization of self, but of the realization of the
spirit that moves you."

Learning to do nothing

This is a lesson I keep needing to come back to. I can see that trading for amusement has been my own downfall a thousand times in the last few years, and to just sit at the sidelines can be painful. I just read a brilliant quote by the trader John Piper. "Once able to trade, it is very likely that a person will make the emotional decision to do just that when bored. This timing is unlikely to correspond with a low risk trading opportunity."

WISDOM QUOTE: " Something higher than life is out there; may I say that as
high as you determine that to be."

Small Mistakes = Small Consequences

One of my favorite trading books is Reminiscences of a Stock Operator by Edwin Lefevre. Based on the trading of the famous Jesse Livermore, Reminiscences is full of trading lessons from cover to cover. Although it was written 83 years ago, it still applies to todays market. Learning from the successes and failures of one of the all-time great traders is hard to beat. Among the many lessons embedded in the book, one common theme is that a trader should keep his mistakes small. Livermore developed a probing system in which he would enter small positions to monitor their activity before he built up to a full position. This way, if he was wrong, it only cost him a little. Chapter 10 begins with some great advice: All stock market mistakes wound you in two tender spots - your pocketbook and your vanity.

This is so true! No trader wants to take a loss. It costs money and diminishes pride to know you were wrong. The mistake of losing money is compounded into a shot to your confidence which is so important to keep intact as a trader.

Lefevre goes on to say:

Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong not taking the loss that is what does the damage to the pocketbook and to the soul. I can certainly relate to that. The times when I know I could have gotten out of a bad trade at a better spot but didnt because of a bad decision is always a shot to my pride. Such a feeling can be very detrimental to subsequent trading results, as the need to make it back leads to forced trades and compounded errors. Make it a point to keep your mistakes small this year. Take small losses they are easily overcome with winners, and youll keep your confidence intact!

WISDOM QUOTE: All perceiving is also thinking, all reasoning is also intuition,
all observation is also invention.

Will crash to kiss Rs.1855-1842 Trendline Support @ 1823

At 2500 level ,We had written stock will crash to kiss 1823--1740 level very soon !!!! Last Hope for BULL'S ,MUKESH AMBANI and Stock is at 1740

Remember 1740
If breaks/Closes below this level for 3 days then ??????

NIFTY H&S
Just watch Height of Head :435---440 points

Target :3750---3700

4023 level
Once breaks and closes below this level will take to

3728--3615--3479 level.

I take the point of view that missing an important trade is a much more serious error than making a bad trade! WISDOM QUOTE: Your life is like a cross-stitch pattern. You see the mess of knots and frays on the underside, God sees the perfect stitches on the top.

Take Ownership!

The realization that you are responsible for your results is the key to successful trading. Winners know they are responsible for their results; losers think they are not. WISDOM QUOTE: " Problems in life come free, solutions come with work and giving up comes with a large price...no success."

FIVE Cognitive Biases That Affect Trading

1) Loss Aversion - The tendency for people to have a strong preference for avoiding loses over acquiring gains. 2) Sunk Costs Effect - The tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future. 3) Disposition Effect - The tendency for people to lock in gains and ride losses. 4) Outcome Bias - The tendency to judge a decision by its outcome rather than by the quality of the decision at the time it was made. 5) Recency Bias - The tendency to weigh recent data or experience more than earlier data or experience. WISDOM QUOTE: "Stop complaining about the things God has not done, rather
thank him for the ones already done. That way he is going to know that you appreciate him and he will give you more abundance."

RISK is the possibility of loss. That is, if we own some stock, and there is a
possibility of a price decline, we are at risk. The stock is not the risk, nor is the loss the risk. The possibility of loss is the risk. As long as we own the stock, we are at risk. The only way to control the risk is to buy or sell stock. In the matter of owning stocks, and aiming for profit, risk is fundamentally unavoidable and the best we can do is to manage the risk.

Risk Management
To manage is to direct and control. Risk management is to direct and control the possibility of loss. The activities of a risk manager are to measure risk and to increase and decrease risk by buying and selling stock.

WISDOM QUOTE: " Be not afraid of greatness; some are born great, some
achieve greatness, and others have greatness thrust upon them."

You need discipline, patience, and courage. You must have a willingness to lose, but a strong desire to win. Pride is a great banana peelas are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions. I used to try to will things to happen. My attitude was that I figured it out, therefore it can't be wrong. What is the ultimate rationalization of an investor in a losing position? "Ill get out when I'm even." I became a winner when I was able to say, "To hell with my ego, making money is more important." WISDOM QUOTE: " Your life is like a cross-stitch pattern. You see the mess of
knots and frays on the underside, God sees the perfect stitches on the top."

Remember the tortoise and the hare. Making 10% every month for 6 months is better than making 40% in the the first 3 and losing 20% the last 3. In this age, it seems like everybody wants to make the quick buck, so we are inclined to chase when we see a hint of a rally going. Next thing we know we enter into a position, and then suddenly everything goes down. Stay relaxed and prepared, there are way too many stocks in the market to have to be chasing a few.

WISDOM QUOTE: " Do not view the word through the lens of the world but
view the world through the lens of the word."

Do ONE trade per day. That's it, no more! ONLY ONE TRADE PER DAY!! That's it, ONLY ONE TRADE PER DAY!! Make this damn trade count and give this trade a

personality and a character. Make it special. Does it have a good reasoning or a good story behind it. Is it a TRADE YOU WOULD BE PROUD OF???? Be 100% confident it'll work.

Remember In Trading: Less is ALWAYS More. WISDOM QUOTE: " Half of the troubles of this life can be traced to saying yes
too quickly and not saying no soon enough."

Opinion less State of Mind. The market has no firm link between reason and outcome. I dont have to figure out the future. I dont need the weight of opinion on my shoulders. I am free to react to what happens by relying on my reading of stock action. I keep a flexible state of mind. Nothing prevents me from changing my tactic if the market doesnt act as I expect it to.

WISDOM QUOTE: " Use incredible thoughts to manifest an incredible life. Your
life will follow your thoughts. If you think it, and believe it, then you will see it."

Trading provides one of the last great frontiers of opportunity in our economy. It is one of the very few ways in which an individual can start with a relatively small bankroll and actually become a multimillionaire. Of course, only a handful of individuals succeed in turning this feat, but at least the opportunity exists. A rigid stop-loss rule is an essential ingredient to the trading approach of many successful traders. Winning streaks lead to complacency, and complacency leads to sloppy trading.

WISDOM QUOTE: " We are not held back by the love we didn't receive in the
past, but by the love we're not extending in the present."

You receive your trading signal and then what? You watch it go by, believing that if you hold a bit longer, price will continue the uptrend or will soon change from a loss into a profit. You could be right...or wrong. One thing is clear is that you are ignoring your trading signals, and that is never good. Plan the trade and trade the plan. If you set an exit price and the stock reaches it, then close out the trade either for a profit or loss. Taking a loss should be just as easy as taking a win. If it's not, then keep practicing until it is.

WISDOM QUOTE: "Your life is like a cross-stitch pattern. You see the mess of
knots and frays on the underside, God sees the perfect stitches on the top."

Taking advantage of potential major winning trades is not only important to the mental health of the trader but is also critical to winning. Letting winners ride is every bit as important as cutting losses short. If you don't stay with your winners, you are not going to be able to pay for the losers. In addition to not overtrading, it is important to commit to an exit point on every trade. Protective stops are very important because they force this commitment on the trader.

WISDOM QUOTE: "Our souls are not hungry for fame, comfort, wealth or
power. Those rewards create almost as many problems as they solve. Our souls are hungry for meaning, for the sense that we have figured out how to live so that our lives matter, so that the world will be at least a little bit different for our having passed through it."

When things go bad, traders shouldn't stick their head in the sand and just hope it gets better. You should always have a worst-case point. The only choice should be to get out quicker. The worst mistake a trader can make is to miss a major profit opportunity. 95 percent of profits come from only 5 percent of the trades.

WISDOM QUOTE: "Until you decide that NOTHING will stop you from success,
EVERYTHING will."

1)The market is designed to pay you money - It is designed to give you money, as long as you understand it and have the discipline to live by the trading and risk rules that you make for yourself. 2)A good trade should be easy to spot and should work immediately and decisively 3)Lastly, any trade that does not work immediately is suspect - Be slow to get into trades, but quick to get out of trades WISDOM QUOTE: "If you believe it's too difficult, it will be. If you believe it's
possible, it will be. If you want it to be, you need to believe."

Always Remember :
It isnt what you trade, but how you trade it that matters most
Don't let your beliefs dictate your trade. Only price should do that. When profits come too easily, it is time to reduce risk

What are we working on today?

Set that one goal for the day and take the occasional break from the screens to assess whether or not they're living up to their goal. Not every day can be profitable, but--if you're setting and working your goal--every day can be a success, building confidence, self-efficacy, and mastery. Don't search for valutions and Never talk about Fundamentals...While u trade in stock market. Dont look back on missed opportunities but to look ahead for the next one WISDOM QUOTE: "The people and circumstances around me do not MAKE me
what I am, they REVEAL who I am."

Six Questions Worth Asking at the End of the Trading Day

* What opportunities did I miss and what could have alerted me to those opportunities? * When I took heat on trades, what could I have done to enter at better prices? * Was the level of risk that I took in trades commensurate with my conviction in the trade ideas? * What were the themes and markets driving prices today that I should be alert for tomorrow? * What are the themes, economic reports, and markets that might drive prices overnight that I should be alert for in the morning? * What kind of trades are making me money? Where am I losing my money? What can I do about that?

WISDOM QUOTE: "Better understated than overstated. Let people be surprised

that it was more than you promised and easier than you said."

1. Simplicity - have a simple, well defined way to generate trading ideas. Have a simple approach towards the market. You cant take everything into account when you try to make an educated decision. Filter the noise and focus on several key market components. For me, they are relative strength and earnings growth. 2. Common sense - create a trading system that is designed on the basis of proven trading anomaly. For example, trend following in different time frames. 3. Flexibility - be open to opportunities in both directions of the market. Be ready to get long and short. 4. Selectivity - chose only trades with the best risk/reward ratio; stocks with the best set ups; it doesnt make sense to risk a dollar to make a dollar. 5. Dont overtrade - two or three well planned trades in a week (month) might be more than enough to achieve your income goals. Patiently wait fot the right set up to form and to offer good risk/reward ratio. WISDOM QUOTE: "There's a great joy in my giving. It's thrilling. It's
exhilarating. It's important to be a part of sharing. It is my love. It is my joy."

Winning disrupts the traders emotions as much as losing We are disrupted when we experience events outside our expectation. The method that is 60% accurate will experience four consecutive winners about 13% of the time. Traders are just as susceptible to overconfidence during profitable runs as underconfidence during strings of losers. Size kills The surest path toward emotional damage is to trade size that is too large for ones portfolio. We experience P/L in relation to our portfolio value. When we trade too large, we create exaggerated swings of winning and losing, which in turn create exaggerated emotional swings.

WISDOM QUOTE: "The only thing you should ever surrender to is the power of
your own enthusiasm."

12 Habits of Highly Successful Traders

- Preparedness - Detachment - Willingness to Accept Loss - Taking Controlled Risk - Thinking in Probabilities - Being Comfortable with Uncertainty - Consciousness of Abundance - Optimism - Open Mindedness and larity of Thought and Perception - Courage - Discipline

WISDOM QUOTE: " Physical healing is temporal but God's grace is eternal.
Given the choice, I would choose God's grace every time."

The successful speculator must always have cash in reserve, like a good general who keeps troops in reserve for exactly the right moment, and then moves with great conviction, and commits his reserve armies for final victory, because he has waited until all the odds are in his favor. Reasonable people act unreasonably when they are afraid. And people become afraid when they start to lose money, their judgement becomes impaired. This is our human nature in this stage of our evolution. It cannot be denied. It must be understood. WISDOM QUOTE: "The key to a better life: Complain less, appreciate more.
Whine less, laugh more. Talk less, listen more. Want less, give more. Hate less, love more. Scold less, praise more. Fear less, hope more."

Someone asked a surfer what he does when a big surf comes along, and he goes underwater. The surfer said it was simple. "If I panic, I only have 3-5 seconds of air to breathe. If I stay calm, I have 45-60 seconds of air." Trading Lesson: If you let your emotions get the better of you, you could lose all of your capital. However, if you take a moment and think about your trades, you can have much better results. WISDOM QUOTE: "Every man feels instinctively that all the beautiful
sentiments in the world weigh less than a single lovely action."

"The Fruits of Your Trading Success

I re-read a quote from Jesse Livermore today:
The fruits of your success will be in direct ratio to the honesty and sincerity of your own effort in keeping your own records, doing your own thinking, and reaching your own conclusions.

I find time and time again that losing traders are making the same mistakes:

1. They don't keep any records. 2. They do no testing. 3. They become euphoric about (and increase risk wildly after) wins. 4. They become despondent about (and decrease risk wildly after) losses.

5. They focus on how much money they want. 6. They rarely / never think about how much they stand to lose on a trade. 7. They set their stop loss based on a 1:1 or 1:2 risk to reward ratio, just to make the ratio look good. 8. They discount the importance of psychology. 9. They over-value the importance of the trading "system." 10. They have no routine.

WISDOM QUOTE: " Faith is not the cake for special occasions but the bread for every day living."
7 Different common emotional mistakes:

1. Emotional bias: the tendency to believe the things that make you feel good and to disregard things that make you feel bad. In trading terms, this means ignoring the bad news and focusing on the good news. Its called losing objectivity; you dont recognise when things go wrong because you dont want to. 2. Expectation bias: the tendency to believe in things that you expect. In financial terms this means not bothering to analyse, test, measure or doubt the conclusion you expect or hope for. It is also known as the law of small numbers believing in something with little real evidence.

3. The disposition effect: the tendency to cut your profits and let your losses run the opposite of what a trader should be doing. Making small profits and big losses is a recipe for disaster. 4. Loss aversion: the tendency to value the avoidance of loss more highly than the making of gain. Losses impact on you more than gains. Because of this you become more emotional when making losses, the point at which a rational decision would save you the most money. 5. The sunk-cost fallacy: this is the tendency for our decision-making to be influenced by the size of the loss we have already incurred. The bigger the loss, the more likely we are to persist with a losing trade rather than take the rational decision to cut to a more profitable trade. The size of your loss has no impact on the future share price but a huge impact on your ability to make the right decision. 6. The bandwagon effect: the tendency to think it must be right because everyone else is doing it a thought process guaranteed to get you in when its obvious and get you out when its obvious. Put another way, it has you buying at the top and selling at the bottom. 7. Past-price fixation: the tendency to avoid prudent trading decisions by anchoring your thought process to prices that no longer exist. Ill sell it if it gets back to rS.50. Ill buy it if it gets down to rS50 again. We are all guilty. In trend-following trading, if the price goes up, you dont sell it, you buy it; if it goes down, you dont buy it, you sell it. The old high has gone, the old low has gone. Dont wait for them to come back to do the wrong thing.

Most traders who fail have large egos and cant admit that they are wrong. Even those who are willing to admit that they are wrong early in their career cant admit it later on! Also, some traders fail because they are too worried about losing. Im not afraid to lose. When you start being afraid to lose, youre finished. WISDOM QUOTE: " Going after anything worthwhile in life entailed risk, of course. A man of ambition and courage didn't let that stop or delay him. A man accepted the dangers, the element of chance. If he didn't, he won nothing."

The composite of a losing trader would be someone who is highly stressed and has little protection from stress, has a negative outlook on life and expects the worst, has a lot of conflict in her/her personality, and blames others when things go wrong. Such a person would not have a set of rules to guide their behavior and would be more likely to be a crowd follower. In addition, losing traders tend to be disorganized and impatient. WISDOM QUOTE: " All the interests of my reason, speculative as well as practical, combine in the three following questions:
1. What can I know? 2. What ought I to do? 3. What may I hope?"

The Complexity Curve

The more complexity you add to your trading -- by looking at more time frames, indicators, currency pairs, systems, at all hours of the day -- the more difficult it becomes to actually implement a profitable trading strategy. WISDOM QUOTE: Every great mistake has a halfway moment, a split second when it can be recalled and perhaps remedied.

Trading Wisdom - Winning %

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."
George Soros

WISDOM QUOTE: Your big success will not come from great ideas in outer space. It will come from the little things and little ideas you have been playing with all your life.

5 Trading Pitfalls And How To Solve Them

The following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.

Pitfalls

Focusing on the P & L Losing objectivity while in a trade Becoming emotional about a trade Lacking confidence: exiting early, failing to put a trade on, not sizing up Difficulty adapting to a changing market WISDOM QUOTE: " Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even."

Positive Affirmations

Repeat the words yourself to ingrain them in your brain. Repeat the words yourself to ingrain them in your brain.

-I am a consistent trader. -I have complete confidence in my abilities. -I follow my trading plan. -I know the markets today are capable of doing anything. -I am prepared to trade what I see. -I will have winning and losing trades today. -I set stops immediately after I enter a trade. -I will never add to a losing position. -I have complete confidence in my abilities. -I have supreme concentration. -I will immerse myself into the market flow. -I will take what the market offers up to me. -I know what my trading edge looks like. -I will not hesitate when my system gives me a signal. -I have complete trust in probabilities. -I will buy when my system signals me to buy. -I will sell when my system tells me to sell. -I will trade responsible size, never risking too much. -I am moving closer to my goals everyday. -I am a skillful trader but always striving to do better. -I learn from my mistakes so I do not repeat them. -I have complete confidence in my abilities. -I am an excellent trader

the golf swing explained

7 actions I do

1) Enter a trade that doesnt take off - cut it. I dont care if it takes off after that. 2) Get a gut feeling that Im on the wrong side of the market - cut it and reverse. 3) Stopped out twice on the same pair - stay flat and dont trade until tomorrow. 4) In a trade thats running well - only look at it towards end of current session and make a decision to stay into the end of the next one or not. 5) Feeling like a stop out is immanent - cut the trade and save a few pips. I dont care if it turns out I was wrong. 6) Missed the start of a run and its well into it, let it go and wait for another day. 7) In a trade and then get a feeling that I dont know whats going on - go flat and stay out until another day.

Focus on the things you can change

Take the hours you spend now looking at news events and spend it instead on mental training. Develop your concentration skills. Your order entry skills, your trading plan. Work on the things that need improvement.

WISDOM QUOTE: " Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even."

Novice to Expert.

The key to trading success lies in the cultivation of our own pattern recognition (and our ability to act on patterns); not on a search for external answers or grails. There are no gurus with answers. WISDOM QUOTE: " Sometimes life's unfair. Sometimes you are."

Remember the tortoise and the hare.

Making 10% every month for 6 months is better than making 40% in the the first 3 and losing 20% the last 3. In this age, it seems like everybody wants to make the quick buck, so we are inclined to chase when we see a hint of a rally going. Next thing we know we enter into a position, and then suddenly everything goes down. Stay relaxed and prepared, there are way too many stocks in the market to have to be chasing a few.
Warren Buffet has stated that toll bridge companies are always a good stock to hold in ones portfolio as every time a car passes through, the company earns money and be it recession or boom times, people do travel within the city. So toll bridge companies are always assured of returns, as population always goes up and number of cars plying also only goes up.

WISDOM QUOTE: " Do not view the word through the lens of the world but view the world through the lens of the word."

Worst Fears Not Realized

I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just luck. Rather your position is most likely correct and should not only be held but perhaps added to.

WISDOM QUOTE: " While I know myself as a creation of God, I am also obligated to realize and remember that everyone else and everything else are also God's creation."

Where is your head during the market day?

1) Are you looking through the rear-view mirror, criticizing your last trade? 2) Are you looking at your profit/loss for the day and filtering trades through that? 3) Are you distracted by people or the phone? 4) Are you thinking about yourself and how well or poorly you've been doing? 5) Are you locked in an opinion of what the market "should" be doing instead of observing what it *is* doing? 6) Are you wanting to get your money back after a loss or hold onto it after a gain? 7) Are you focusing more on yourself or on what markets are doing? Many times, our head just isn't in the game. We can't be focused on performance outcomes and immersed in our performance at the same time.

WISDOM QUOTE: "Those who fear rejection will experience it. Those who believe in success will experience success. Your life will follow your dominant mental thoughts."

Quotes from :The Logical Trader

31 August 2009

Recently, I just read a book authored by Mark B. Fisher, The Logical Trader. There are some good trading quotes that I like from that book. So, I think it may be good to share them here too.

Here are the trading quotes:

Have A Plan In trading, as in life, you need a plan. This plan includes not only the micro a strategy for each and every trade you make but also the macro meaning why you trade, how you intend to reach that goal (your means to the desired end), and what youll do as an alternative if that doesnt work out. Know what you want to accomplish, how you intend to get there, and what you will do if it does or does not work out. Have a plan and stick with it. That works in trading, as well as in life.

I Know Who I Am Coming to term with who I am as a trading, knowing my limitations, and doing what I do well and not doing those things that I have no clue about has brought me continued success.

Too many people want to be who they are not, and professionally whether in trading or in another field of business thats where they run into trouble.

Discipline and Comfortable With Yourself You dont need complicated Einstein formulas to make money in the markets. You do need to be disciplined and comfortable with yourself. No matter how good of a trader you think you are, the markets are always going to screw with your head and test your mental fortitude. Remember, the survivors are also the ones who make up the markets success stories.

Time Stop An important rule of trading is that time is much more important than price. Successful trading is a matter of seeking out immediate gratification. If the market doesnt move your way within a short time of putting on a trade, just get out. Most people trade just with Price Stops and not with Time Stops. They think they have to endure some initial pain. You, however, should not.

Get Out When Youre Wrong Successful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when theyre wrong. Being right is not the problem. What you do when youre wrong is the crucial issue. There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way. Most traders average down and wait for the market to turn their way. Trading my way, I always have defined amount of money that I am willing to lose. I let the market decide how much money Im going to make. Good News/Bad When the news is good but the market just does not rise correspondingly, sell. Action

I
trend

Have is not going to

No last very

Clue
market

If a market is making a substantial move and traders seem to understand why, this

long.

However, if the market is moving in one direction and nobody has no clue as to why, then the trend is going to be prolonged.

When a market goes up or down for no apparent reason, it tends to go a lot further in that direction than people can imagine. Be The House The more time you spend at the table, the more bets you are going to place, and the greater the probability that you will eventually walk out of the casino as a loser. The casino would rather not have someone make a single large wager and win or lose, immediately walk away. What the house wants is for you to keep playing. The passage of time is the casinos best friend and the players worst enemy. Money Management If the odds are in your favor of making a profit with your trading system, then keep your trade size consistent, cut your losses short, and know that, over time, youll be successful. Fear and Greed The two key ingredients that every trader needs to posses in the right combination in order to be successful namely, fear and greed. You need to have enough fear in you, meaning a healthy amount of respect for the market that you are participating in. Allowing yourself that you are always right, especially when the market is clearly dictating that you are dead wrong, is a sure path toward trading disaster. However, fear is not enough. A trader must also have a healthy amount of greed. You must be willing and able to press winning trades and allow these once-in-a-bluemoon occurrences to develop into large scale winners. Sometimes it takes an iron will and a great deal of patience to be able to max out on these particular trades. Staying Out Of The Penalty Box The key to the whole puzzle is discipline, the more you have, the better youll trade. The best traders have incredible amounts of discipline when they have a trading position on. They cut their losses and run. Thats the hardest thing on the world for a lot of other traders. Maybe youre bullish on the market, but your indicators say to get out. After you do, the market goes up this one time. Then you question your system. But if you stick with the system, youll be a lot better off.

Dont take too much Risk

31 August 2009

One of the most devastating mistakes any trader can make is risking too much of their capital on a single trade. One thing is certain in trading and that is if you lose all your capital you are out of the game. Why risk so much you could be prevented from continuing? There is a saying in poker than going all-in (risking all your chips) works every time but once. This is true of trading. If you risk all your account on every trade it only takes one loser to wipe you out (and no trading method is 100% accurate), so you will be out of the game at some point it is only a question of time. In general, we only risk 1-3% of the available capital allocated to a system on any individual trade. This is calculated using the size and, the difference between our entry price and our maximum stop price, and the amount of capital allocated to the system. With the win probability and ratio of size of winning trades to losing trades we are almost certain never to lose all of our trading capital. In fact, the chance of us hitting our maximum drawdown for the year is tiny. All trades should be of a size that almost seems insignificant. If you are worried about the size of a trade then it is too big and you should reduce the size immediately. Remember that longevity is the key to making money by trading slowly over a long time with minimal risk, is always preferable to rapidly with too much risk.

Fundamentals that you read about are typically useless as the market has already discounted the price. -I call them "funny-mentals." However, if you catch on early, before others believe, then you might have valuable "surprise-a-mentals" -Ed Seykota Pride is a great banana peelas are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions. -Ed Seykota

WISDOM QUOTE: " People don't change; they adjust. Therefore, don't adjust your life or plans for someone who doesn't appreciate a darn thing you do for them. In other words, be careful of whom you adjust your life for."

I love waves

Survive The Wave

Many Try, Few Succeed In some ways, day trading can be a great job: no boss, potentially large income, take a vacation whenever you wishyou can even work in your pajamas if you want. However, no one wants a job where he or she loses money going to work!. Most day traders do lose, but the high profit potential and flexible lifestyle associated with day trading keeps many people motivated to continue trying. To dance with the devil, remember to: Preserve Your Trading Capital = "Survive To Trade Another Day"

WISDOM QUOTE: "When a great man has some one object in view to be achieved in a given time, it may be absolutely necessary for him to walk out of all the common roads."

As humans we do not come equipped to deal with the variety of randomness that is around us every day. Many professions deal with making processes and things work reliably. We are taught to strive for perfection, for high scores in school and in sports. This can be a handicap to traders. There is no perfection in trading. Instead traders must put probability in their favor." WISDOM QUOTE: "The storm is coming; not all storms are evil. With its raindrops, it can wash away your past and in its flash it can illuminate a new way. This is one of those storms."

Amateur traders always think, How much money can I make on this trade! Professional traders always think, How much money can I lose on this trade? The trader who controls his or her risk takes money from the trader whose head is in the clouds. WISDOM QUOTE: " The one thing that doesn't abide majority rule is a person's conscience."
Creating a game plan is very easy and you can do in a matter of minutes. Here are the key steps to creating a very basic game plan: 1) Write down your reasons for buying or selling a particular market. 2) Write down your entry point for the market youre about to trade. Why are you getting in? Did you see a technical set up? 3) Write down when you are going to exit this market. Why and when are you going exit? Was your profit target reached, or were you stopped out? 4) Do not make market decisions during trading hours. It may sound easier said than done, but watching the daily ticks can cause your emotions to go haywire. 5) Review your game plan every day to see if things are going according to your plan. This allows you to adjust your money management stops and your target zones in a non-emotional way.

It couldnt be easier and its only costs is a sheet of paper and some of your time. So there you have it five easy steps that can both make you money and save you money in the future. Every success in training and in life, Hurdles To Overcome There are three related hurdles for traders. 1. The first is finding a trading method that actually has a statistical edge. 2. Second is following it with consistency. 3. Third is consistently following the method long enough for the edge to manifest itself on the bottom line. Winning Attitude One of the most important tools that a trader possesses is his or her mind. Attitude can either make or break you as a trader. To become a successful trader it begins with believing in yourself and having a winning attitude. Everyone wants to be a winner, at least they think so. Unfortunately, most are not willing to perform the tasks necessary to become a consistent winner. Winners generally achieve success by being focused on a goal. Being focused allows winners to remain committed to the tasks at hand. Most winners perform a lot of hard work, including a willingness to deal with sometimes mundane duties. Most of all, winners perform with an I am responsible for both my failures and successes attitude. So, where does the would-be trader start to become a success? By focusing on the tasks at hand. Most of all, treat trading as a business. And, as in any business, money management is critical. Money management, next to trend, is probably the aspect of trading most overlooked by smaller investors. Man, by nature, is an optimistic creature and the amateur trader often acts instinctively. Unfortunately, this instinct or optimism is often the undoing of the smaller trader. When a person enters a trade, he does so with the hope that it will be a winner. When the position goes against him, he keeps thinking (or hoping) it will come back. He knows he should have a stop in place, but hope keeps telling him to stay just a little longer since everybody knows, you always get stopped out the

day the market turns. Eventually, hope turns into frustration, desperation and, finally panic which prompts the trader to issue a GMO (get me out) order. If the trader hasnt learned his lesson by this point, he develops the I have to get it back syndrome. He generally rushes into another poorly planned trade, throwing good money after bad. Winners show several different characteristics. They enter the market knowing they can be wrong and, in fact are wrong as often as they are right. They have learned markets dont run on hope. They understand markets tell them when they are right or wrong. When a trader is losing money and getting worse, the market is telling them to get out

10 Secrets To Success
23 November 2009

These 10 secrets could be applied to your success as a trader, but more importantly they could be applied to ensure success in your personal life. I thought I would share these 10 tips with you as they made me stop and think about my own life. 1) How You Think Is Everything Always be positive. Think success, not failure. Beware of a negative environment. 2) Decide Upon Your True Dreams & Goals Write down your specific goals and develop a plan to reach them. 3) Take Action Goals are nothing without action. Dont be afraid to get started. Just do it.

4) Never Stop Learning Go back to school or read books. Get training and acquire skills. 5) Be Persistent & Work Hard Success is a marathon, not a sprint. Never give up. 6) Learn To Analyze Details Get all the facts, all the input. Learn from your mistakes. 7) Focus Your Time & Money Dont let other people or things distract you. Dont Be Afraid To Innovate; Be Different Following the herd is a sure way to mediocrity. 9) Deal & Communicate With People Effectively - No person is an island. Learn to understand and motivate others. 10) Be Honest & Dependable; Take Responsibility Otherwise, Nos. 1-9 wont matter. I hope that by applying some of these secrets to your life, you will have a growing brokerage and a joyous personal life

account

38-Steps To Be A Successful Trader

23 November 2009

How successful are you in your trading? Try to gauge which stage you are in below. Source of these 38-steps are unknown to me, but must have been written by a highly successful trader. It does hit a note with me after many years in the market myself. 1. We accumulate informationbuying books, going to seminars and researching. 2. We begin to trade with our new knowledge. 3. We consistently donate and then realize we may need more knowledge or information.

4. 5. 6. 7.

We accumulate more information. We switch the commodities we are currently following. We go back into the market and trade with our updated knowledge. We get beat up again and begin to lose some of our confidence. Fear starts setting in. 8. We start to listen to outside news & other traders. 9. We go back into the market and continue to donate. 10. We switch commodities again. 11. We search for more information. 12. We go back into the market and start to see a little progress. 13. We get overconfident & market humbles us. 14. We start to understand that trading successfully is going to take more time and more knowledge then we anticipated. Most People Will Give up at this Point as They Realize Work Is Involved. 1. We get serious and start concentrating on learning a real methodology. 2. We trade our methodology with some success, but realize that something is missing. 3. We begin to understand the need for having rules to apply our methodology. 4. We take a sabbatical from trading to develop and research our trading rules. 5. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. 6. We add, subtract and modify rules as we see a need to be more proficient with our rules. 7. We feel we are very close to crossing that threshold of successful trading. 8. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology. 9. We continue to trade and become more proficient with our methodology and our rules. 10. As we trade we still have a tendency to violate our rips and our results are still erratic. 11. We know we are close. 12. We go back and research our rules. 13. We build the confidence in our rules and go back into the market and trade. 14. Our trading results are getting better, but we are still hesitating in executing our rules. 15. We now see the importance of following our rules as we see the results of our trades when we dont follow them. 16. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 17. We continue to trade and the market teaches us more and more about ourselves. 18. We master our methodology and trading rules. 19. We begin to consistently make money. 20. We get a little overconfident and the market humbles us.

21. We continue to learn our lessons. 22. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size. 23. We are making more money then we ever dreamed to be possible. 24. We go on with our lives and accomplish many of the goals we had always dreamed of. 25. We know we are close. 26. We go back and research our rules. 27. We build the confidence in our rules and go back into the market and trade. 28. Our trading results are getting better, but we are still hesitating in executing our rules. 29. We now see the importance of following our rules as we see the results of our trades when we dont follow them. 30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 31. We continue to trade and the market teaches us more and more about ourselves. 32. We master our methodology and trading rules. 33. We begin to consistently make money. 34. We get a little overconfident and the market humbles us. 35. We continue to learn our lessons. 36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size. 37. We are making more money then we ever dreamed to be possible. 38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Trading is toil

Trading is toil, especially because its already hard work in the first place to find a model, a setup, a strategy that actually works, but then you must adapt it, which is the very hardest part. Once you have a love (something that makes your trading profitable), whether it is a strategy, model, parameter, or setup, it becomes very painful to watch your love fade and die. I know we shouldnt personalize trading, but the fact is we (or I) develop an emotional relationship to our precious tools every time I come across something worthwhile, after much toil, I feel so glad. I feel a sense of work well done. Its a very pleasant feeling. And I cannot refrain from emotional pain when a market relationship I was profitably trading becomes weaker and eventually non-existent. To adapt, one must have the emotional strength to, after much toil, model a strategy, and say to yourself: you may have no value in the future. Trading is strange, because it demands skills one would probably not wish to nurture if it wasnt necessary

Trading and Behaviour

Gandhi said a person cannot be different from himself in different areas of his life. He meant a person really cannot be someone at work and a entirely different person at home, with his friends, etc. The personality is a whole - you cant have a mask for different occasions. What you do in private life echoes in your business life, and vice-versa. What you do in the different areas of your life (private, professional, friendship, religion, spirituality, fun) echoes in every other part. If you are a fighter in your work, one cannot expect you to be a daisy flower at home - you will treat your family with the same authority and discipline. If you are kind, you will be kind whether at home or at office. One cannot really perform different roles separately. The person is an unity. That means if you are lazy, undisciplined, late, in your behavior, it will reflect in your trading. Have you ever thought your trading problems may not be trading related? If you find yourself 1. Unprepared 2. Getting late 3. Not aware of details 4. Leaving office or desk at crucial times 5. Answering phone calls at trading time 6. Talking aloud as if your office was a party 7. Not taking care of your trading journal Can you honestly say that the problem is with the market?

Your questions -My answers

The Cardinal Sin Of Trading Q: Do you believe in the rule of not letting a winning position turn into a loser? If you do, how do you handle a situation where a stop out at the ATR would cause you to take a loss on a position that was a winner at one time? A: This has been called the cardinal sin of trading to let a profitable position turn into a loser. But, it happens. And, just because it does happen, doesnt mean that it provides you with an excuse not to take your medicine and own the loss. When we are wrong and we do have a good trade go against us, our top priority remains capital preservation. Therefore, if when painful, we cannot let a small loss grow into a larger one. The worst thing in the world is letting a bad trade turn into an investment and being held hostage by the break-even curve. Thats why stops are important and why sticking to them, even if it requires you to exit with a loss, is mandatory. Buy The Dippers Q: You sometimes refer to the buy the dippers in a what seems to me to be a negative tone and yet you also describe part of your style as buying on pullbacks. How do you distinguish these two ideas? A: Thats funny you mention this and I appreciate it especially as you say I fall well within the buy the dip camp. I have no problem with the buy the dippers as long as theyre present and in charge of the tape, well be just fine. But, the problem is, of course, that if every dip gets bought, at some point Mr. Market will figure out a way to roll back that trade and gain back some respect for his ability to cause the most amount of frustration to the majority. This will ultimately lay

the foundation for a nasty bull trap scenario where everyone is long at the wrong time and then caught with their pants down in a sizable reversal. In my experience, when any trade becomes a routine money-maker, you have to expect the market to throw you a monkey wrench. Theres no room for complacency and whenever I have something that works like clockwork and others have figured out the same, I get nervous.

My favourite Tudor Jones quotes

Second, never overtrade

First of all, never play macho with the market.

I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out; If they are going for me, I keep them. Risk control is the most important thing in trading Dont ever average losers. Decrease your trading volume when you are trading poorly, increase your volume when you are trading well. Never trade in situations where you don`t have control. For example I don`t risk significant amounts of money in front of key reports, since that`s gambling, not trading If you have a losing position that is making you uncomfortable, the solutuion is very simple: Get out, because you can always get back in. There is nothing better then a fresh start.

Market Rules to Remember

1) Markets tend to return to the mean over time. 2) Excesses in one direction will lead to an opposite excess in the other direction. 3) There are no new eras excesses are never permanent. 4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways. 5) The public buys the most at the top and the least at the bottom. 6) Fear and greed are stronger than long-term resolve. 7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names. Bear markets have three stages sharp down, reflexive rebound, and a drawn-out fundamental downtrend. 9) When all the experts and forecasts agree something else is going to happen. 10) Bull markets are more fun than bear markets

Perfectionism

Trading is not about perfection. It is about probability and progress. All charts, analyses (fundamental and technical) and trading plans are built on probabilities. Why then, do so many traders strive for perfection? Why do so many traders miss trades, waiting for exactly the right entry and then beat up on themselves when it

doesnt come and the position runs away while they sit there scratching their heads and condemning themselves? Why are so many traders trying to turn a game of probability into one of 100% certainty? The answer lies in one of the cardinal sins of trading which is PERFECTIONISM. Perfectionism can be a great help to people in many professions, but can be fatal to a trader. Perfectionists, always trying to find the Holy Grail of trading go from one service to another, from one system to another, looking for a way that they can be right all the time. YES! Now, I found it. Its this trading room, or this service, or this indicator! Wait something is wrong here. Not all of these trades are working and I have draw downs! How can it be that this particular method failed and I actually had to take a loss? Must be something wrong. I will try harder and look for an even better system, a more expensive service, a new and improved guru, some absolutely no-fail software so that I can have ONLY WINNING TRADES. This is perfectionism in action. Not only does this type of irrational behavior and belief undermine and demoralize a trader, but it takes away all the enjoyment and fun of being in the markets. It leads to depression with depletion of psychic and physical energy, and leaves the perfectionist to confront his basic and overriding fear fear of failure. In the extreme, it leads to physical and mental illness, including addiction to prescription drugs, alcohol, or illegal substances as well as other addictions. The pain of failure or the haunting fear of failure is simply overwhelming, and one turns to whatever works to medicate the pain. If you have a perfectionist mentality when trading, you are setting yourself up for failure, because it is a given that you will experience losses along the way. You must begin to think of trading as a game of probability. Your losses ( that you hope will return to breakeven) will kill you. If you cannot take a loss when it is small ( because of the need to be perfect), then you will watch that small loss grow into a larger loss and so on into a vicious cycle of more and more pain for the perfectionist. Trading on hope does not work. The markets can remain irrational for a lot longer than you can remain solvent. The object should be excellence in trading, not perfection. Moreover, it is essential to strive for excellence over a sustained period, as opposed to judging that each trade must be excellent. This is a marathonnot a sprint. The greatest traders know how to take cut losses and let winning positions run. Perfectionists often do exactly the opposite. They get in at the wrong time, stay in too long and then get out the wrong time. Perfectionists are always striving and never arriving. The market will find the flaw in a perfectionistic trader and exploit it day after day. The market is your greatest teacher and your most demanding critic, so take this wonderful opportunity every day to learn about yourself and make yourself strong.

If you see in yourself this trait of perfectionism rearing its ugly head, its OK to get angry at it and even yell or curse at it. Do whatever it takes to acknowledge it and then find a way to fix it. Here are a few suggestions:

Try to appreciate and enjoy the process as well as the outcome. Set more achievable and realistic goals for your trading. Remember that your self-worth and your worth as a human being to those who love you does not fluctuate from day to day depending on if you win or lose that day. Focus less on achievement and more on enjoyment. Trading is serious, but it should be fun and not something which one approaches with fear and dread. Lighten up. Laugh more (especially at yourself). Learn from your mistakes, and forgive yourself and make peace with your past. Strive to be betternot perfectjust a amazing human work in progress.

If we were always to wait for the most favorable combination of circumstances, no enterprise would ever be undertaken. There can be no end without a beginningthere was never an enterprise in which everything fitted in perfectly, for chance plays a leading part in the affairs of all men. Obedience to rule does not ensure success, but success, on the other hand, furnishes a canon a rule of conduct ~ Napoleon Bonaparte

Livermore quotes

Livermore on irationality

Trying to figure out the why of amarket move can often cause great emotional strife. The simple fact is, the market always precedes economic news, it does not react to economic news. The market lives and operates in future time.

Livermore on knowing yourself

It is my conclusion that playing the market is partly an art form, it is not just pure reason. If it were pure reason, then somebody would have figured it out long ago. Thats why I believe every speculator must analyze his own emotions to find out just what stress level he can endure. Every speculator is different, every human psyche is unique, every personality exclusive to an individual. Learn your own emotional limits before attempting to speculate, that is my advice to any one who has ever asked me what makes a successful speculator. If you cant sleep at night, because of your stock market position than you have gone too far, if this is the case then sell your position down to the sleeping level. On the other hand, I believe everyone who is intelligent, conscientious and willing to put in the necessary time, can be successful on Wall Street. As long as they realize the market is a business like any other business they have a good chance to prosper.

Self Observation and feedback

Three

questions

to

ask

at

the

start

of

the

trading

day:

Am I bringing baggage to the days trade?

Am I carrying over frustrations from losing money or missing opportunity? Am I feeling particular

pressure to make winning trades? Am I locked into a view of markets because those views havent been paying me?

Am I prepared? Have I identified significant price levels for the day? Have I
gained a feel for how various markets have been trading overnight? Do I know if economic reports are scheduled for the day and what the expectations are?

What am I working on? Do I have goals for the day? What have been the
mistakes Ive been making that need to be corrected? What improvements have I made that I want to cement? What kinds of trades have been working best for me, and am I prepared to actively look for those? Solution focused approach What did we do differently on those successful occasions? * I have planned the trade well in advance with research; it is not a spontaneous trade, so Ive had time to think clearly about what I want to do. * I have a clear profit target in mind based on research and refuse to waver from that target unless the market takes me out with a predefined stop. I consider myself a person of integrity, so I tell myself that I have to show integrity and loyalty to my trade idea and target; * I dont follow the position tick for tick. Either the trade will hit my target or it will hit my stop. I make a conscious effort to let go and not micromanage the trade; * I keep myself calm and clearly focused by purposely getting up from my chair, doing some stretches, breathing deeply, and getting away from the screen. I keep myself in a state that is incompatible with anxiety; * I rehearse constructive self-talk during the trade. I tell myself that Ive done my preparation and established my edge. Any individual trade can go against me, but if I take all the good trades I can, eventually Ill benefit from good odds and a good risk-reward ratio. If I lose money on the trade, Ill figure out why and what that might be telling me about the current market. All of these steps, taken together, form a template for how I manage to hold onto positions to maximize profits. Now the key is to turn this template into a habit pattern. I want it to become automatican internalized part of me.

My Business Philosophy

Someone asked about my business philosophies recently. In no particular order here are several original principles developed along my way and some paraphrased thoughts from many of those very bright trailblazers who molded my thinking:

Bring joyful, imaginative and impassioned energy every day. You cant fake it. You dont need to be big to be good, you need to be smart. When there is no market, create one. Engage someone as if your life depended on it. Nothing is more important than the wisdom to help transform someone. Make your vision grounded in your uniqueness. Focused on the unexamined dimensions of your efforts. The race goes to the curious and slightly mad. Dry obligation to anything in life will figuratively kill you. No one gives permission. Seize the mantle. If you cant solve a problem, you are playing by the rules. Hard work, sustained concentration and drive are the so-called secrets. Telling the truth is the best defense for every situation. Winners understand sunk costs and opportunity costs. Plan to win, prepare to win and have every right to expect to win. Its in your power to change your belief systems. No one is stuck.

And for those who complain that they were born without the silver spoon consider:

Money cannot completely compensate for a lack of talent, for sloth or a flawed vision, or for a pedestrian frame of mind. And the absence of cold hard cash cant keep you from making movies (or whatever) if thats what you want to do and youre clever about it. To think otherwise suggests not just a lack of imagination but also a failure of the optimism necessary for attracting good things. If youre paying close attention, there are buoyant, cheerful accidents in life and strange twists of plot to help you on your way. And when you think about it, its much nicer to have pleasant things happen to you than to work out every last bit of your life from a master plan, detail by detail.

Characteristics of Successful Trader

From time to time I have been asked to offer my perspectives on things I have found common in successful traders. I have always struggled with my reply to that question because there are only a few traders of which I have gained enough understanding of what they do every day to achieve their results. However, in Van Tharps latest book Super Trader, he provides 10 common characteristics frequently found among the best of the best among the hundreds of traders hes worked with throughout his career. Like me, I think you may find it of interest! 1. They all have a tested, positive expectancy system thats proved to make money for the market type for which it was designed. 2. They all have systems that fit them and their beliefs. They understand that they make money with their systems because their systems fit them. 3. They totally understand the concepts they are trading and how those concepts generate low-risk ideas. 4. They all understand that when they get into a trade, they must have some idea of when they are wrong and will bail out. 5. They all evaluate the ratio of reward to risk in each trade they take. For mechanical traders, this is part of their system. For discretionary traders, this is part of their evaluation before they take the trade.

6. They all have a business plan to guide their trading. You must treat your trading like any other business. 7. They all use position sizing. They have clear objectives written out, something that most traders/investors do not have. They also understand that position sizing is the key to meeting those objectives and have worked out a position sizing algorithm to meet those objectives. 8. They all understand that performance is a function of personal psychology and spend a lot of time working on themselves. You must become an efficient rather than inefficient decision maker. 9. They take total responsibility for the results they get. They dont blame someone else or something else. They dont justify their results. They dont feel guilty or ashamed about their results. They simply assume that they created them and that they can create better results by eliminating mistakes. 10. They understand that not following their system and business plan rules is a mistake. Do any of these surprise you? Why or why not? How does your own trading measure up against this list? What area(s) do you need to work on the most to take your trading to the next level?

Having a clear mind

I was absolutely unemotional about numbers. Losses did not have an effect on me because I viewed them as purely probability-driven, which meant sometimes you came up with a loss. Bad days, bad weeks, bad months never impacted the way I approached the markets the next day. Jim Leitner

Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes. George Soros

Mental Toughness

You must eliminate Human Emotion as much as possible in this business. It is paramount to success. Unless you are adapt at predicting the future, your mind is a far weaker ally than all the tools in your toolbox. Using a Star Wars analogy: the Jedi were superior in mind control and were able to play tricks with weaker minds. Humans are emotional bunches who are not fully prepared for the forex market.

Really once you overcome fear, self-doubt, emotions, and attachment to money you, will be on your way to long term success. Depending on how much power those words have over you, will determine amount of time needed to develop needed skills for growth. Remember you will learn how to control fear, self-doubt, emotions, and attachment to money as those are human emotions buried inside each of us since birth. Abundance is our birthright, yet many never reach full potential. The market has no concern whatsoever for what your mind thinks; it will go where it wants to go, regardless of what you think. You must overcome and adapt to ever changing market conditions. If you set your stop loss at whatever, then you must be prepared to follow through and accept a loss if it happens. If you have a loss, you must not let the loss damper your enthusiasm. Review your trading plan to figure out what went wrong. Your procedure must become purely mechanical and consistent. Dont waste quality time worrying about losses in practice regimen account, learn to accept and determine solutions on not making same mistakes over and over.

Discipline

Generally, I cant see more than a year ahead because things change so rapidly its very difficult to have a 5-to 10year view. I have a rolling one-year view of the world and I impose discipline on myself by keeping a trading diary. Every morning, I go through the same process: If I have any positions on, I ask why do I have the positions? What has changed?

I wish I could say I follow my own rules 100%. It seems one is constantly relearning the same trading lessons. The market is always there to keep you in check and is a totally objective judge of your performance. The P/L at the end of the day is yours with no one else to blame. One of the most difficult things about trading is not to trade. Thats probably one of the most common mistakes that people starting out in this business make. Overtrading is as bad as running a losing positions for too long.

Cognitive Biases That Affect Traders

Humans have weaknesses that hamper their trading capabilities. Many were developed in ancient times and were important for survival. I will enumerate the most important: 1) Loss Aversion: the strong tendency for people to prefer avoiding losses over acquiring gains 2) Sunk Cost Effect: The tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future 3) Disposition Effect: the tendency for people to lock in gains and ride losses 4) Outcome Bias: The tendency to judge a decision by its outcome rather then by the quality of the decision at the time it was made 5) Recency Bias: the tendency to weigh recent data or experience more than earlier data or experience 6) Anchoring: the tendency to rely too heavily, or anchor, on readily available information

7) Bandwagon Effect: the tendency to believe things because many other people believe them Belief In The Law Of Small Numbers: The tendency to draw unjustified conclusions from too little information All traders have in one or another time been affected by one or several of these biases. Its easy to make mistakes when you are under pressure and dealing with money. As Jesse Livermore once said, above all other things we have to guard against ourselves.