Thought For The Day

[novice101]

These are my own thoughts based on what I see from the "HOME PAGE" poll as the biggest problem traders face: Hesitating when they need to act.

Otherwise known as: I'll stop procrastinating tomorrow. :cheesy:




You lose because you are afraid to lose. You feel it diminishes you. Your ego hates losing.

1. You fail to cut your losses quickly. Why? You're afraid to admit you've lost.
2. You hesitate before taking a trade. Why? You're afraid it might be a loser.
3. You take profits too early on a trade. Why? You're afraid your win will turn to a loss.
4. You fiddle with your trading strategy. Why? You're trying to avoid a loss like the last one.
5. You break your trading rules. Why? You're trying to outsmart what might become a loss.


In every instance, the fear of losing leads to failure.

Losses should be regarded as the fixed overhead of doing business or ,to use a poker analogy, forsaking your ante when you are dealt a bad hand.Every business invovles fixed costs. Losses are yours. Limit them as far as you can without derailing your business plan.

Any experienced trader will tell you that the set up for a good trade looks identical to the one for a bad trade. If it didn't you would make one trade and retire.


You can't know until you bet, so place your order and then take your medicine.


I have been trading for 15 years. It took me five to realise what I'm telling you now. ACCEPT that you are going to have losers. This is what will make you a winner.In this business, losing is OK. Losses are your humbling friends. Embrace them. :-0 Profits are the sycophants around you. Ignore them.

If you don't place the trade you have nothing to worry about, so just do it and fret later. CLICK then SWEAT. The worst that can happen is that you will lose your ante. On the other hand.........


If you risk nothing, you risk everything.

Be brave enough to face the continual prospect of loss, and you'll have the courage to be a good trader.


C

p.s Of course If you just bet on your personal predictions of the future, rather than a tested technique that allows you to bet with the odds in your favour, then I suggest you invest in the crystal ball market. It's probably more forgiving. Comments welcomed.

Many thanks for that!! Just what I need

Andi

 

[Salty Gibbon]

When all hope is lost, go out and buy a dozen lottery tickets

 

[oatman]

Or one? :cheesy:

 

[chump]

Perhaps those learning to trade might wish to think about this...

"Do not believe in traditions because they have been handed down for many generations.
Do not believe in anything because it is spoken and rumoured by many.
Do not believe in anything simply because it is written in your books.
Do not believe in anything merely on the authority of your teachers and elders.
But after observation and analysis,when you find that anything agrees with reason..then accept it and live up to it. "

Not an original of mine though I try to practice the sentiment...attribution The Buddha

 

[chump]

What is really happening here

Quiet time ....a little story....

2 little boys in the park..1 a bully...the bully hits the smaller boy..the smaller boy does nothing,simply looks at the bully..the bully says.."so hit me back if you dare"..the small boy just replies "no I won't fight you"..to which the bully replies by hitting the small boy again..once again the small boy does absolutely nothing..the bully is now beginning to feel frustrated so he tells the small boy " I am going to hit you every time I see you"....the small boy ponders this and replies " I will allow you to do that,but understand this..you mean nothing to me..what you do means nothing to me..one second after you have hit me I will have forgotten you exist and I will continue on my way...and remember this..you need something from me which is why you wish to hit me therefore every day you will be waiting for me to arrive so you can get what you need..but on some days I may decide not to be here..what will you do then.....how will you feel on that day when you do not have what you need..."

 

[llew]

i'm glad i read that

Quiet time ....a little story....

2 little boys in the park..1 a bully...the bully hits the smaller boy..the smaller boy does nothing,simply looks at the bully..the bully says.."so hit me back if you dare"..the small boy just replies "no I won't fight you"..to which the bully replies by hitting the small boy again..once again the small boy does absolutely nothing..the bully is now beginning to feel frustrated so he tells the small boy " I am going to hit you every time I see you"....the small boy ponders this and replies " I will allow you to do that,but understand this..you mean nothing to me..what you do means nothing to me..one second after you have hit me I will have forgotten you exist and I will continue on my way...and remember this..you need something from me which is why you wish to hit me therefore every day you will be waiting for me to arrive so you can get what you need..but on some days I may decide not to be here..what will you do then.....how will you feel on that day when you do not have what you need..."

I'm glad i read that,it will help a lot in a situation i have at this moment.
Thank you

 

[pkfryer]

If only life was so simple! But when in real life you get a gang of thugs beating you up... it means a lot to you! A HELL of a lot! It also torments you for days, weeks, months and years after.

For in truth... the victim needs the bully as much as the bully needs the victim!

I've been watching some prestine seminars on CD, and he mentioned something that suddenly made a lot of sense! He said: "We are making money off people that dont know what their doing. I hope that doesn't make you feel too bad about yourselves"

Is a successful trader the bully in the market, punching and causing pain to the little weakling amateur trader/gambler? And maybe its also true that the loser needs to be bullied... and if you dont do it to them, they will gladly let someone else do it to them. Should we feel bad about ourselves in a zero sum game, especially if we consider ourselves: nice people?

 

[trendie]

Interesting perspective on trading pk!

The one aspect of trading that has bothered me is that it appears essentially non-productive.
As a trader, I am not contributing to society, ( except in taxes ).
I am not helping my neighbours, making anything for anyone to buy, or providing a service for others to utilise.
The activity is profoundly selfish.
This has bothered me.

With regards to bullying / victims.

NOBODY is forced to trade. You have a choice to walk away. ( and get a normal ( ?! ) ) job.
So I dont see where the bullying comes from.
I win when I interpret the market correctly.
I lose when I dont.
If I fail, it is my own fault for not being prepared sufficiently.
If I take money from the market, I do not walk up to a specific individual and empty their wallets.
The amateurs empty their wallets - for us - all by themselves. ( God bless them )

 

[oatman]

You are part of a market to which you are adding liquidity.
You are not taking anything off some poor person.

 

[chump]

Interesting,but so far this is not what the story was meant to illustrate...see if we get anymore views...

 

[Salty Gibbon]

The worst social disease you can get from a dog is fleas

 

[frugi]

Trendie,

"The one aspect of trading that has bothered me is that it appears essentially non-productive.
As a trader, I am not contributing to society, ( except in taxes ).
I am not helping my neighbours, making anything for anyone to buy, or providing a service for others to utilise.
The activity is profoundly selfish.
This has bothered me."

(In the literal economic sense of the word, profitable traders certainly are productive. In its most basic form one can define production as "the application of reason to the problem of survival". Trading is the purest means of being productive that there is IMHO. Reason, risk capital and a counterparty is all that we need. This places little burden on society when compared to other more conventional means of production. I believe Adam Smith also postulated the famous paradox that even if we all pursue selfish economic interests the majority often still benefits - that famous "invisible hand" quote. Here - http://plus.maths.org/issue14/features/smith/)

But I digress and I know exactly where you're coming from.

Consider the percentage of jobs that do clearly confer benefits on society. It is probably smaller than one might imagine.

Then consider those that damage society, at least indirectly (i.e. working for McDonalds and contributing to their global activities) There's a lot more of them than one might imagine.

The rest probably do a little bit of both, enriching some at the expense of others.

"Making something to buy" or "providing a service for others to utilise" is by no means a good thing. There are many damaging things to buy and many services that damage horribly. Cigarettes and cheap loan shark firms spring to mind, but there are countless more.

So at least trading is "benefit neutral". Then have the opportunity to -

1. Do something charitable/neighbourly/voluntary etc. in one's spare time. This is probably easier to achieve when one hasn't sold one's soul to a multinational!
2. Spend our profits in altruistic ways. The better we are at our jobs the more we can do this. To improve one's trading does not necessarily imply greed as a prime motive, or indeed a motive at all.

Silly point to end: Perhaps by trading from home you are helping your neighbours by looking out for burglars while they're out at work!

Sorry if any of this appears patronising BTW, tis all off the top of me head.

 

[pkfryer]

Trendie!
I had exactly the same thought. It bothered me that I felt trading was essentially non-productive and there is still a bit in the back of my mind that feels that. But frugi has a point! Most jobs are completely non-pruductive to society, humanity as a whole. For instance, Im a software engineer and I do feel a great sense of satisfaction when I complete a project. But I haven't contributed to anything more than lining the pocket of the overpaid managers, directors and the fat controller who owns the company and is lounging around on his luxury yaht somewhere!

The software I create does nothing profound, at times it has been satelite tv GUIs, other times the backend to a betting website. I've done nothing to contribute to humanity!

But I do have this feeling that I 'need' to do something, and give something back! So when my trading profits get beyond a certain point Im going to start tithing. The bizzar thing is, by tithing a percentage of my profit to good charities and causes, I'll probably do more for humanity and the greater good than I ever did in a so called 'useful' profession!

I do believe there is a victimisation in the markets. Lots of novice traders get lured in under the impression that its easy money, and then they get slaughted by the trained experience traders which we either are now, or will become in the future. In a zero sum game, we are banking on their being a fresh supply of loser. We can't all get profit if we are all winners can we? If I get £10K that means somebody lost £10K. So we are shorting rallys and going long on declines etc to catch out the less informed traders! So that is one of the reasons that I would like to give something back... in the form of charities etc.

 

[frugi]

But at least the victims elect to be victimised. Nobody forces them to throw their cash into the market and if they believe trading is a piece of pyss then I'm afraid they deserve to discover the truth in short order. I say that as one who has done just that, in the past, and I blame only myself.

 

[chump]

The central theme of the story is to illustrate two contrasting emotional states and how one leads to dependancy and the other to control..and PK I would take the apposite view to that which you took..the victim is the 'bully' not vice a versa..but when I say 'victim' I mean he is a 'victim' to his own 'needs'..when I look around I see so many people who build 'cages' for themselves based on 'needs' which add nothing of persisting value to their life...I'll leave it there..

 

[jpwone]

We seem to be making the assumption that the losers are unhappy about losing. I doubt very much that the liquidity of the Forex market is significantly altered by Joe Bloggs trading from his study. The market as a whole does not care if he wins or loses only he cares.

Lets take an example. A UK manufacturer enters a supply contract with a firm in the USA. This is a fixed price contract and will be billed in GBP. The firm in the USA is now exposed to currency risk as they will be buying there widgets for a fixed price in GBP but will need dollars to buy GBP to pay. They do the sensible thing and hedge their currency exposure. Now if the dollar falls against the pound they profit on the hedge and use this profit to pay for the now more expensive widgets. If the dollar rises against the pound they take a loss on the currency trade but get the widgets cheaper as there dollar now buys more pounds.

The nice bit for the small Forex trader is that companies are doing this all the time and really don't care if they make a profit or loss on the trade. The money you take out of this market is probably not coming from Joe Bloggs but is coming from a corporate which is happy to win or lose so long as they effectively get the price they quoted for their widgets.

I don't lose sleep over taking money from the market and I'm quite happy that the money I do take is not coming from some naive trader. It would take one hell of a lot of naive traders to fund the Forex market

 

[chump]

A second issue is also to be found in the story, or at least in the reactions to it..that is people tried to explain it according to a set of beliefs that have been formed on the basis of what they have read or been told perhaps by parents or peers...yet if you analyse the story you might see it is about being willing to tear up those rules/beliefs..the smaller boy did not react in a stereotypical way..he had 'pondered' and created a different mind set about what was happening and in doing so was capable of bringing about a different outcome...

 

[jpwone]

In real life the bully would have knocked seven bells out of him for being lippy and then told him to be there every day waiting for him and if he was not there he would get him. A real bully would have firmly got control of the situation and the little hero would have a few more bruises and would know that there was a lot more waiting for him if he did not do as the bully wanted.

It would be nice to think it would not be like this but in the real world with real bullies thats the way it works.

 

[chump]

"real world "...who's real world ?

and that is a true story from the real world...the language has simply been dumbed up

 

[jpwone]

My real world is probably different to yours.

In my 'nice' part of London (an old village which has become part of Greater London) gangs of youths stroll around looking for easy pickings, the local high school has serious problems with violence, there have been two muggings in the past two months on my doorstep, in the 6 years I have been here there have been at least 5 murders within 10 minutes walk of my house, a young girl was shot in both arms for her mobile phone, a youth was shot dead by a friend messing around with his gun in the next street, my car has been vandalised 4 times, we have been burgled once (whilst in the house), offensive language is the norm, people peeing in the street is a regular occurence.

I moved here because it was far better than the old house in Hackney and strange as it might seem people are queuing up to buy houses in 'the village'.

My own experience of bullies dates back to my early/mid teens when gangs of youths had their own turf in and out of school. Being an indivual was not an option, you belonged to a gang or you were a target. I had my share of fights and it was soon realised that I would not fight fair. I would not wait till break time or after school to be attacked, I would pick indivuals when they thought they were safe (in class usually) and attack them with anything I could get my hands on (chairs etc.). It did not take too long before I was left alone