Secrets of Market Wizards
- Thread starter Ituglobal
- Start date
the secrets of trading is talk is cheap.
profit will not take care of itself. if the guy who bought NFLX at 100, it ran up to 300+, he did not take profit, and let it slide to 50.
loss will not take care of itself too. if another guy bought NFLX at new low at 45 (NFLX to the above guy a loser), and ignore it, it printed 67.
trading is an intelligent game, you must actively take action to let you become a winner or loser.
if you do not take care of your profit, your profit "puff" in blink of eye
if you do not take care of your loss, your loss may magically become a piles of cash.
either way, it is your own choice.
the right way is: take care of both profit and loss.
the efficeint way to take care of profit is: trail
the efficient way to take care of loss is: prepare the worst scienio before hand, so you know when you are wrong and cut loss short, move on. most people use cheating method:wait, it is ok. if you are just an investor, not a trader using margin, you do not need care about the up/down. to investors, TIME is his friend. to traders, margin/leverage is his enemy.
profit will not take care of itself. if the guy who bought NFLX at 100, it ran up to 300+, he did not take profit, and let it slide to 50.
loss will not take care of itself too. if another guy bought NFLX at new low at 45 (NFLX to the above guy a loser), and ignore it, it printed 67.
trading is an intelligent game, you must actively take action to let you become a winner or loser.
if you do not take care of your profit, your profit "puff" in blink of eye
if you do not take care of your loss, your loss may magically become a piles of cash.
either way, it is your own choice.
the right way is: take care of both profit and loss.
the efficeint way to take care of profit is: trail
the efficient way to take care of loss is: prepare the worst scienio before hand, so you know when you are wrong and cut loss short, move on. most people use cheating method:wait, it is ok. if you are just an investor, not a trader using margin, you do not need care about the up/down. to investors, TIME is his friend. to traders, margin/leverage is his enemy.
the fact is:
whether you take care of profit or not, there is three possibles:
1. the market will not give you profit any more, stuck there
2. the market will keep giving you more profit
3.the market will rudely reverse and take away your profit, and if you do not take action, take away more even wipe your out
my wife always asked me about trades. she wanted to buy some stuff in her IRA. often I gave her the right time to buy, she will buy , most time immediately green, she is happy, then I realzied she bought something, I noticed the sell signals, and ordered her to liqidate the holding, she suddenly changed her mind, "no, it is going up, why sell, I want my money doubled". then the funny thing happened, she did not sell. after weeks, she noticed her holdings become red, she started to panic and ask for my suggestion. I said " you are not trading, just investment, you do not need pay attention to the daily ups/downs, just hold on, be patient". she started to frequently check the quotes, login her account and bother me about her holding, worried about the drop. I keep telling her " it is ok to ignore the drop and hold". after months of this struggle, the market comes back, and just I want to tell her to add, she could not wait and dump at the exact entry, see the market shoots like a rocket. then she may try to chase or the bad past horrible experience hold her and concluded :" investment is hard". In reality trading is not hard, just mouse click.
my wife's mistake is she does not know the market, she has no understanding of "TIME is her friend to an investor", the critical mistakes is: do not prepare beforehand, she wants to be a trader to timing or an investor to divendend and captical apprication, how long to hold, when up, what she do, when down, what she do, what indicators/clues/patterns to judge direction/reversal, before she bought her holding, she had no plan at all.
there are no secrets in the market. some market trends, always, just like MDVN, very nicely. FB too
some market cluelessly bizaare,.
to me, I know the trending market the most, so I just trade trending market. that is my secret.
whether you take care of profit or not, there is three possibles:
1. the market will not give you profit any more, stuck there
2. the market will keep giving you more profit
3.the market will rudely reverse and take away your profit, and if you do not take action, take away more even wipe your out
my wife always asked me about trades. she wanted to buy some stuff in her IRA. often I gave her the right time to buy, she will buy , most time immediately green, she is happy, then I realzied she bought something, I noticed the sell signals, and ordered her to liqidate the holding, she suddenly changed her mind, "no, it is going up, why sell, I want my money doubled". then the funny thing happened, she did not sell. after weeks, she noticed her holdings become red, she started to panic and ask for my suggestion. I said " you are not trading, just investment, you do not need pay attention to the daily ups/downs, just hold on, be patient". she started to frequently check the quotes, login her account and bother me about her holding, worried about the drop. I keep telling her " it is ok to ignore the drop and hold". after months of this struggle, the market comes back, and just I want to tell her to add, she could not wait and dump at the exact entry, see the market shoots like a rocket. then she may try to chase or the bad past horrible experience hold her and concluded :" investment is hard". In reality trading is not hard, just mouse click.
my wife's mistake is she does not know the market, she has no understanding of "TIME is her friend to an investor", the critical mistakes is: do not prepare beforehand, she wants to be a trader to timing or an investor to divendend and captical apprication, how long to hold, when up, what she do, when down, what she do, what indicators/clues/patterns to judge direction/reversal, before she bought her holding, she had no plan at all.
there are no secrets in the market. some market trends, always, just like MDVN, very nicely. FB too
some market cluelessly bizaare,.
to me, I know the trending market the most, so I just trade trending market. that is my secret.
He often talks about the concept of trading around a core. He explains very well the strategy of selling some off every time your stock goes up 3-5%, then just buying more every time it goes down 3-5%.
Basically swing trading, only your are constantly holding on to a core position, while buying and selling on the swings.
You are right, though that Cramer mainly focuses on portfolio investment, but he does throw bones to the traders if you listen enough. He use to do it a lot at his hedge fund. He claims the most money he ever made was buying option calls. Deep in the money, and the next month or two out.
Earned 3X greater gains than Warren Buffett ââ¬â even during a market meltdown. (Paul Tudor Jones earned a 62% return vs. 19.5% for Berkshire Hathaway in 1987.)
Made trading profits in just one year that exceeded the Gross Domestic Product of some small countries.
Raked in a 781% return in a single year of trading.
Turned a $400 grubstake into a $200 million profit windfall. Generated trading profits of over $100,000 a month for 70 consecutive months.
Traded up to $2 billion in face value T-bonds a day.
Made trading profits in just one year that exceeded the Gross Domestic Product of some small countries.
Raked in a 781% return in a single year of trading.
Turned a $400 grubstake into a $200 million profit windfall. Generated trading profits of over $100,000 a month for 70 consecutive months.
Traded up to $2 billion in face value T-bonds a day.
Hetty Green: The Witch of the Wall Street
LEARN FROM MARKET WIZARDS - PART 7
Hetty Green was considered one of the earliest American value investors and the wealthiest female speculator of her own time. She lived from November 21, 1834 until July 3, 1916 (aged 81). She was the first American woman to make a significant effect on the stock market. Her greatest quality is prudent speculation, especially considering the standards of her times. She invested and reaped rewards in unique ways. On the other hand, she was remarkable for being mean and stingy. At the time of her death, she was worth up to $3.8 billion (inflation-adjusted to 2006). Her 2 children inherited her wealth, and after their death, over 50% of the wealth was taken as taxes and the rest went to charity.
Lesson
There are certain lessons you can learn from Hetty Green.
1. Women can become great traders and investors. Successful trading isnât the birthright of men only. In fact, there are many women all over the world who trade successfully and whoâre smarter than some men in the markets.
2. If women are properly educated about the financial markets, theyâll develop very great ability to trade permanently victoriously. Women have certain qualities that can be used to their advantage in the markets; something thatâs very rare in men (unless theyâre discipline). They tend to be cautious and conservative, while they take risk control very serious.
3. Hettyâs trading methodology - just like that of the Oracle of Omaha (Warren) â is to be greedy when people are fearful and to be fearful when people are greedy. No wonder Hetty is known as the Witch of the Wall Street. When people are extremely and irrationally confident about the stock market, then itâs time to sell. When people dread the markets too much, thus becoming apathetic towards it, itâs time to buy. This has become a timeless market principle.
Conclusion: Are there any changes in your personal life that prompt you to consider your tomorrow? Are you ready to start making fortune in the markets, though it doesnât come overnight? Or would you prefer to limit yourself to your monthly salary, including the whims and caprices of your boss? The choice to be a trader may seem daunting, but the future reward makes it worthwhile. If youâre a woman, getting properly educated and making an attempt in trading would really change your perception of the financial markets.
This article is ended by a quote from Hetty:
âThere is no great secret in fortune making. All you do is buy cheap and sell dear, act with thrift and shrewdness and be persistent⦠I buy when things are low and no one wants them. I keep them until they go up, and people are crazy to get them⦠When I see a thing, going cheap because nobody wants it, I buy a lot of it and tuck it away. Then, when the time comes, they have to hunt me up and pay me a good price for my holdings.â
LEARN FROM MARKET WIZARDS - PART 7
Hetty Green was considered one of the earliest American value investors and the wealthiest female speculator of her own time. She lived from November 21, 1834 until July 3, 1916 (aged 81). She was the first American woman to make a significant effect on the stock market. Her greatest quality is prudent speculation, especially considering the standards of her times. She invested and reaped rewards in unique ways. On the other hand, she was remarkable for being mean and stingy. At the time of her death, she was worth up to $3.8 billion (inflation-adjusted to 2006). Her 2 children inherited her wealth, and after their death, over 50% of the wealth was taken as taxes and the rest went to charity.
Lesson
There are certain lessons you can learn from Hetty Green.
1. Women can become great traders and investors. Successful trading isnât the birthright of men only. In fact, there are many women all over the world who trade successfully and whoâre smarter than some men in the markets.
2. If women are properly educated about the financial markets, theyâll develop very great ability to trade permanently victoriously. Women have certain qualities that can be used to their advantage in the markets; something thatâs very rare in men (unless theyâre discipline). They tend to be cautious and conservative, while they take risk control very serious.
3. Hettyâs trading methodology - just like that of the Oracle of Omaha (Warren) â is to be greedy when people are fearful and to be fearful when people are greedy. No wonder Hetty is known as the Witch of the Wall Street. When people are extremely and irrationally confident about the stock market, then itâs time to sell. When people dread the markets too much, thus becoming apathetic towards it, itâs time to buy. This has become a timeless market principle.
Conclusion: Are there any changes in your personal life that prompt you to consider your tomorrow? Are you ready to start making fortune in the markets, though it doesnât come overnight? Or would you prefer to limit yourself to your monthly salary, including the whims and caprices of your boss? The choice to be a trader may seem daunting, but the future reward makes it worthwhile. If youâre a woman, getting properly educated and making an attempt in trading would really change your perception of the financial markets.
This article is ended by a quote from Hetty:
âThere is no great secret in fortune making. All you do is buy cheap and sell dear, act with thrift and shrewdness and be persistent⦠I buy when things are low and no one wants them. I keep them until they go up, and people are crazy to get them⦠When I see a thing, going cheap because nobody wants it, I buy a lot of it and tuck it away. Then, when the time comes, they have to hunt me up and pay me a good price for my holdings.â
Michael Covel: A Smart Turtle Trader
LEARN FROM GENERALS OF THE MARKETS - PART 9
"Frankly, I don't see markets; I see risks, rewards, and money." - Larry Hite
Michael Covel is the head of Trend Following, which is an institution that boasts students in more than 70 countries. Heâs written very popular books, including The Little Book of trading, Trend Commandments, The Complete Turtle Trader, etc. Those books were translated into many tongues. His also made a film whose title is, Broke: The American Dream. Heâs known in most parts of the world, where heâs done live presentations.
For Michael, trading isnât the only calling; teaching also is a calling. His institution has been teaching trend followers since 1996. Michael Covel has vigorously espoused trend following; a great trading and investment strategy. This strategy allows speculators to make money from bear and bull markets. Itâs been proven that the art of following the trend is a permanently successful trading method. For more information on how you can benefit from Michaelâs trading ideas, you can visit his websites at: Michaelcovel.com, Trendfollowing.com and Turtletrader.com.
Lesson
There are many useful trading hints and techniques we can learn from Michael. Below are some points.
A. Itâs possible to imitate top traders, provided weâre disciplined enough to do so. This isnât hypothetical. Top traders have common attributes that are timeless. If you can study their trading styles and apply them, youâll soon become a real trading expert.
B. There are losers and winners in the markets. There are losers who refuse to go out of the market thatâs moving against them. There are winners who know when to buy and when to sell. They also know how to deal with negative positions. Herd mentality isnât always a good thing. Trading alongside the trend remains one of the smartest thing you can do in the market. For example, going long when the markets are predominantly bearish can be suicidal. With that kind of market situation, one will just need to go short. Hundreds of billions of dollars have been made by following the flow of the markets.
C. Personally, I donât believe in the Efficient Markets Hypothesis. Merlin Rohtfield doesnât believe that the theory is correct. Numerous permanently victorious market wizards across the globe have proven that theory wrong. Ultimately, Michael Covel also thinks that theory is against any beneficial trading knowledge. Efficient market dogma has been proven wrong by impressive track records.
D. Great traders are made, not born. You need no unique gene, or heavenly miracle or inborn ability or special secret or PhD to become a consistently winning trader. Your wishes and opinions arenât known or respected by the financial markets. These markets canât be wrong, but you can be wrong. You donât need to wait for a position thatâs moving against you to come back to your entry price. You can manage your risk and minimize your losses in the markets. Thatâs the only thing you can control.
E. The buy-and-hold strategy is no longer useful. Itâs useful only if youâre immortal or youâre a magician who can turn back the hands of the clock.
Review
Going against the trend is very dangerous, no matter what those who think otherwise may say. Many traders feel that an overextended bearish market could be ready to rally and do so protractedly. But the reality is that it might still fall by 600, 800, 1000, 1300 points before it even goes up. One of the major reason traders buy renowned and world-famous stocks is that analysts talk about them and investors are often aware of them. If the overextended market continues in the direction that people donât expect, then investors get whacked. As a result of this, everybody would be looking forward to strangling the prime economic forecaster, as investors holding other instruments are apprehensive. Invariably, youâd see some suave ape whoâs shown on the screen or other type of media, often a forecaster whose studies were published in the previous year and adjusted some days prior to the occurrence, safeguarding his studies by reducing the likelihood while announcing that he still prefers the scenario since it remains overextended. Or it might be that the stock displays a temporary halt in its journey and some speculators feel itâs now great to enter contrary to the established trend and realize gains in counter-trend or mean reversion trading. They may not realized, yet theyâve fallen in love with a wrong direction and would go on opening positions against the trend, usually with heavy losses, till they receive a margin call or forfeit their portfolio.
This article is ended by a few quotes from Michael:
1. âSpeculation isnât evil. Think about what drives a market: millions of investors speculating to make money. Thatâs evil? Thatâs life! Recent college graduates speculate that a high-paying job will come after graduation. Thatâs evil.â
2. âZero sum battles are life. Someone has to lose for you to win. Forget trying to be loved. Need a friend? Get a dog. If youâre going to win, someone else will lose. Does survival of the fittest make you uneasy? Stay out of the zero sum game.â
LEARN FROM GENERALS OF THE MARKETS - PART 9
"Frankly, I don't see markets; I see risks, rewards, and money." - Larry Hite
Michael Covel is the head of Trend Following, which is an institution that boasts students in more than 70 countries. Heâs written very popular books, including The Little Book of trading, Trend Commandments, The Complete Turtle Trader, etc. Those books were translated into many tongues. His also made a film whose title is, Broke: The American Dream. Heâs known in most parts of the world, where heâs done live presentations.
For Michael, trading isnât the only calling; teaching also is a calling. His institution has been teaching trend followers since 1996. Michael Covel has vigorously espoused trend following; a great trading and investment strategy. This strategy allows speculators to make money from bear and bull markets. Itâs been proven that the art of following the trend is a permanently successful trading method. For more information on how you can benefit from Michaelâs trading ideas, you can visit his websites at: Michaelcovel.com, Trendfollowing.com and Turtletrader.com.
Lesson
There are many useful trading hints and techniques we can learn from Michael. Below are some points.
A. Itâs possible to imitate top traders, provided weâre disciplined enough to do so. This isnât hypothetical. Top traders have common attributes that are timeless. If you can study their trading styles and apply them, youâll soon become a real trading expert.
B. There are losers and winners in the markets. There are losers who refuse to go out of the market thatâs moving against them. There are winners who know when to buy and when to sell. They also know how to deal with negative positions. Herd mentality isnât always a good thing. Trading alongside the trend remains one of the smartest thing you can do in the market. For example, going long when the markets are predominantly bearish can be suicidal. With that kind of market situation, one will just need to go short. Hundreds of billions of dollars have been made by following the flow of the markets.
C. Personally, I donât believe in the Efficient Markets Hypothesis. Merlin Rohtfield doesnât believe that the theory is correct. Numerous permanently victorious market wizards across the globe have proven that theory wrong. Ultimately, Michael Covel also thinks that theory is against any beneficial trading knowledge. Efficient market dogma has been proven wrong by impressive track records.
D. Great traders are made, not born. You need no unique gene, or heavenly miracle or inborn ability or special secret or PhD to become a consistently winning trader. Your wishes and opinions arenât known or respected by the financial markets. These markets canât be wrong, but you can be wrong. You donât need to wait for a position thatâs moving against you to come back to your entry price. You can manage your risk and minimize your losses in the markets. Thatâs the only thing you can control.
E. The buy-and-hold strategy is no longer useful. Itâs useful only if youâre immortal or youâre a magician who can turn back the hands of the clock.
Review
Going against the trend is very dangerous, no matter what those who think otherwise may say. Many traders feel that an overextended bearish market could be ready to rally and do so protractedly. But the reality is that it might still fall by 600, 800, 1000, 1300 points before it even goes up. One of the major reason traders buy renowned and world-famous stocks is that analysts talk about them and investors are often aware of them. If the overextended market continues in the direction that people donât expect, then investors get whacked. As a result of this, everybody would be looking forward to strangling the prime economic forecaster, as investors holding other instruments are apprehensive. Invariably, youâd see some suave ape whoâs shown on the screen or other type of media, often a forecaster whose studies were published in the previous year and adjusted some days prior to the occurrence, safeguarding his studies by reducing the likelihood while announcing that he still prefers the scenario since it remains overextended. Or it might be that the stock displays a temporary halt in its journey and some speculators feel itâs now great to enter contrary to the established trend and realize gains in counter-trend or mean reversion trading. They may not realized, yet theyâve fallen in love with a wrong direction and would go on opening positions against the trend, usually with heavy losses, till they receive a margin call or forfeit their portfolio.
This article is ended by a few quotes from Michael:
1. âSpeculation isnât evil. Think about what drives a market: millions of investors speculating to make money. Thatâs evil? Thatâs life! Recent college graduates speculate that a high-paying job will come after graduation. Thatâs evil.â
2. âZero sum battles are life. Someone has to lose for you to win. Forget trying to be loved. Need a friend? Get a dog. If youâre going to win, someone else will lose. Does survival of the fittest make you uneasy? Stay out of the zero sum game.â