Post some TRADING PRINCIPLES that might help others (Not TA or systems)

[hilmy83]

I’m in a process of cleaning up my MS OneNote books, and deleting heaps of stuff which I thought might help others.

I’m happy to start off with one post, and then perhaps other members can contribute as well. But please do NOT post any TA and systems, only post trading principles that can be applied irrespective of how one trades so others can use it as reminders, flash cards, etc., to improve themselves.



Lessons from Stock Market Wizards by Jack Schwager (in no order of importance):

1. Successful trader use trading methods that suit their personality
   
   
2. You can't control what the market does, but you can reaction to the market
   
   
3. To be a winner, you have to be willing to take a loss
   
   
4. HOPE should never be in your vocabulary
   
   
5. If you are on a losing streak, reduce your position size
   
   
6. Don't underestimate the time it takes to succeed as a trader
   
   
7. Approach trading as a vocation, not a hobby
   
   
8. Have a business / trading plan
   
   
9. Be honest about your weakness and DEAL with it
   
   
10. Know when to do nothing
    
    
11. Being a great trader is a process. It's a race with no finish line
    
    
12. Never ever listen to other opinions. Make your own trading decisions
    
    
13. Analyze your past trades. Study what happened to the stocks after you closed the position
    
    
14. Don't take on excessive leverage. It only takes one mistake to knock you out of the game
    
    
15. Great traders continue to learn and adapt
    
    
16. Don't just stand there and let the truck roll over you
    
    
17. Being wrong is acceptable, but staying wrong is totally unacceptable
    
    
18. Contain your losses
    
    
19. Good traders manage the downside; They don't worry about the upside
    
    
20. Wall street research reports will tend to be biased
    
    
21. Knowing when to get out of a position is as important as when to get in
    
    
22. To excel, you have to put in hard work
    
    
23. Discipline, Discipline, Discipline!!!

The only limitation in trading is yourself. ~ John Bender ~

JACK SCHWAGER – WINNING METHODS OF THE MARKET WIZARDS

As a DAY trader, you must make money EVERY...SINGLE...DAY. Otherwise you just suck and wasting your life - Paul Tudor Jones' 2nd cousin.

 

[Cabin1111]

I hope you weren't advising SML to go to Community College and learn Accounting?

Secondly, I would love for what you say to be true, I have an Accounting Degree. But Financial Statement Analysis is a very small part of it. There are so many software packages that will spit out all of that information, that the money is made elsewhere in Industry analysis, Management analysis, Product analysis etc etc.

The Stock Market is forward looking - discounting. Accounting is historical.

Historical, but may help you spot future red flags...

Again for INVESTING, knowing a balance sheet is very important...

A company with large debt (when rates are near zero), is so much different than at seven to ten percent...

Just my thoughts...

 

[deaddog]

I answer all my questions before I click buy or sell button.

That's the way to do it.

What would those questions be?

 

[SimpleMeLike]

What would those questions be?

Good Evening deaddog,

Do I think I will win on this trade?

If yes, click Buy or Sell Button.

That is it. Just one question I ask myself per trade. Simple.

 

[deaddog]

Good Evening deaddog,

Do I think I will win on this trade?

If yes, click Buy or Sell Button.

That is it. Just one question I ask myself per trade. Simple.

Good evening SML

That seems simple. Almost too simple.

I have a very complicated plan but it answers the question what do I do next. For every thing I think might happen I have an if/then chain of events that I follow. If ES does that then I will do this.

What makes you think you will win on the next trade? What do you consider a win? What do you do when you don't win? What do I do next???

All these damned questions are a pain in the ass but when you can answer them all you will be able to make your million dollars in a year.

 

[taowave]

Lol!!!!

Good evening SML

That seems simple. Almost too simple.

 

[SimpleMeLike]

Good evening SML

That seems simple. Almost too simple.

I have a very complicated plan but it answers the question what do I do next. For every thing I think might happen I have an if/then chain of events that I follow. If ES does that then I will do this.

What makes you think you will win on the next trade? What do you consider a win? What do you do when you don't win? What do I do next???

All these damned questions are a pain in the ass but when you can answer them all you will be able to make your million dollars in a year.

Hello deaddog,

If Beyonce tell you to come to her house and have sex with her, are you going to ask any questions at ALL?

No, you are not , you going to say "Yes, mam" and go to her house and sex her.

That is how easy trading is for me. When the ES wants to give me money, I take it. I do not ask questions.

So why do I need to ask all those damn questions just to click the buy or sell button on the ES futures market.

I hate working hard in trade, and hate over thinking.

If the trade looks good and I think I can win or feel I can win, I click buy or Sell button. Simple

 

[deaddog]

Hello deaddog,

If Beyonce tell you to come to her house and have sex with her, are you going to ask any questions at ALL?

No, you are not , you going to say "Yes, mam" and go to her house and sex her.

Hey SML
LOL
If Beyonce called i'd have all sorts of questions. Probably why I'll never bed her.

That is how easy trading is for me. When the ES wants to give me money, I take it. I do not ask questions.

So why do I need to ask all those damn questions just to click the buy or sell button on the ES futures market.

You need to ask all those damn questions in order to make that million that seems to alluding you for the past few years.

I hate working hard in trade, and hate over thinking.

But you gotta do that shit to make your million

If the trade looks good and I think I can win or feel I can win, I click buy or Sell button. Simple

Of course it's simple, and it would be great if it helped you achieve your goal but that doesn't seem to be the case.
You want simple.... If you want different results you will have to do things differently... Simple!!

 

[Wide Tailz]

Here's a principle I wish I knew in the beginning:

There are times when the market is basically raining money on you, and all you need to do is get a container and collect it. Buy anything that's going up.

And other times, everything feels like your tail is caught in a screen door, all trades immediately reverse direction, range prevails and so do false breakouts.

"Obviously" you need to know which mode the market is in, before you do anything!

 

[Darc]

Here's a principle I wish I knew in the beginning:

There are times when the market is basically raining money on you, and all you need to do is get a container and collect it. Buy anything that's going up.

And other times, everything feels like your tail is caught in a screen door, all trades immediately reverse direction, range prevails and so do false breakouts.

"Obviously" you need to know which mode the market is in, before you do anything!

Your Post is almost a word for word quote of Al Brooks chapter 1 paragraph somewhere.