Daily Commentaries 31st July 06
posted by nomadhunter at 11:11 PM
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July 30, 2006
July 27, 2006
July 26, 2006
Still Buying Commodities?
Still Buying Commodities? by UBS Investment Research.
posted by nomadhunter at 11:09 PM
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OSK Ventures International Bhd
OSK Ventures International Berhad is valued at RM3.52.
posted by nomadhunter at 7:27 PM
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Your Money Or Your Self-Esteem?
In a classic radio comedy bit, a criminal asked Jack Benny, "Your money or your life?" Mr. Benny had to think about it for a little while. In a recent article in "Personality and Social Psychology Bulletin," psychologists Liqing Zhang and Roy Baumeister conducted a series of experiments to examine the extent to which people would be willing to lose money to save face. Which would you be willing to part with first, your money or your self-esteem? If you are like most traders, you are likely to let your money go before your self-esteem.
Trading lore is replete with traders who gladly fed losing trades to avoid admitting the fact that they made a mistake. They hoped against hope that a losing trade would turn around if they could merely wait long enough. In the end, it's better to cut your losses and to move on, but few traders do so. They lose more and more money. Why? The biggest reason is ego. They don't want to admit they were wrong. They don't want to feel like a loser.
Drs. Zhang and Baumeister (2006) showed how people are willing to lose money in order to protect their self-esteem. Participants played a game of chance that was similar to continuing to invest in a losing trade: they were told they could win a jackpot of $10 if they patiently played long enough by feeding the investment in 25-cent increments. Each participant was given $5 in quarters to play the investment game. They had the choice of continuing to put in quarter after quarter to keep an investment going or cutting their losses. In the experimental group, participants were threatened by being told that most people choke under pressure when playing the game and that if they were prone to crack under strain, they would have difficulty. A control group was not given this "ego threat." These researchers also looked at people's self-esteem to see if it would impact the amount of money participants lost. What did they find? People who were threatened by being told they would choke under pressure lost more money that people who were not threatened. In addition, people who had high self-esteem lost more money than people with low self-esteem.
One might think that people with high self-esteem would handle a warning that they might choke under pressure better than people with low self-esteem, but they did not. One might also expect people with high self-esteem to perform better on the investment task than people with low self-esteem, but people with high self-esteem lost more money than people with low self-esteem. Why? People with high self-esteem tend to want to defend their ego. They want to preserve their self-esteem even if it means continuing to lose money on a game they can't win.
What is the lesson? Don't link your net worth to your inner-worth. If you think you have value as a person because you make money on winning trades, you will believe that an outcome of a trade determines your self-worth. It does not, however. No matter how much you win or lose, you still have value as a person. If you remember this fact, you will be able to trade more rationally and objectively. But on the other hand, if you let your self-worth be defined by how well you do as a trader, you will be putting your self-esteem on the line with your money, and you will be likely to do anything to maintain your high self-esteem, even if it means losing money. So whatever you do, forget about making it personal. Trading is not personal. It is just business. If you keep your self-esteem out of the picture, you will trade more objectively, rationally, and profitably.
Trading lore is replete with traders who gladly fed losing trades to avoid admitting the fact that they made a mistake. They hoped against hope that a losing trade would turn around if they could merely wait long enough. In the end, it's better to cut your losses and to move on, but few traders do so. They lose more and more money. Why? The biggest reason is ego. They don't want to admit they were wrong. They don't want to feel like a loser.
Drs. Zhang and Baumeister (2006) showed how people are willing to lose money in order to protect their self-esteem. Participants played a game of chance that was similar to continuing to invest in a losing trade: they were told they could win a jackpot of $10 if they patiently played long enough by feeding the investment in 25-cent increments. Each participant was given $5 in quarters to play the investment game. They had the choice of continuing to put in quarter after quarter to keep an investment going or cutting their losses. In the experimental group, participants were threatened by being told that most people choke under pressure when playing the game and that if they were prone to crack under strain, they would have difficulty. A control group was not given this "ego threat." These researchers also looked at people's self-esteem to see if it would impact the amount of money participants lost. What did they find? People who were threatened by being told they would choke under pressure lost more money that people who were not threatened. In addition, people who had high self-esteem lost more money than people with low self-esteem.
One might think that people with high self-esteem would handle a warning that they might choke under pressure better than people with low self-esteem, but they did not. One might also expect people with high self-esteem to perform better on the investment task than people with low self-esteem, but people with high self-esteem lost more money than people with low self-esteem. Why? People with high self-esteem tend to want to defend their ego. They want to preserve their self-esteem even if it means continuing to lose money on a game they can't win.
What is the lesson? Don't link your net worth to your inner-worth. If you think you have value as a person because you make money on winning trades, you will believe that an outcome of a trade determines your self-worth. It does not, however. No matter how much you win or lose, you still have value as a person. If you remember this fact, you will be able to trade more rationally and objectively. But on the other hand, if you let your self-worth be defined by how well you do as a trader, you will be putting your self-esteem on the line with your money, and you will be likely to do anything to maintain your high self-esteem, even if it means losing money. So whatever you do, forget about making it personal. Trading is not personal. It is just business. If you keep your self-esteem out of the picture, you will trade more objectively, rationally, and profitably.
posted by nomadhunter at 6:44 PM
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July 25, 2006
July 24, 2006
Dutch Lady Milk Industries
Dutch Lady is valued at RM10.60.
posted by nomadhunter at 11:49 PM
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How Are You Doing?
There are some questions that you just don't want to answer, even to yourself. If you have been struggling with the impact of adverse events on the markets in the last two weeks, you don't want anyone, even a caring loved one, to ask "How are you doing?" Sometimes we just don't want to look at how well we are doing. If we are mounting losses, it's easier to avoid looking at how well you are doing. Indeed, sometimes it can be a distraction. You look at your losses. You feel guilty about them, and then guilt turns into disappointment. You are stuck and paralyzed. You can't think creatively, and now you are in a slump. Unfortunately, everyone eventually must ask and answer the dreaded question, "How well are you doing?" The answer may be unpleasant, but you have to face the facts eventually. You can't live in denial. You can't keep living a life of naive bliss by feeding your account every month to avoid looking at how poorly you are doing. It's natural to take such measures, though. We all want to be successful, and it can be devastating to discover that despite our best efforts, we just aren't trading profitably. Sure, it takes time to hone your trading skills, but if you are losing money every month, you must be doing something wrong. Why not do something right and take home huge profits?
It is vital to monitor your trading performance on a trade-by-trade basis. It is useful to keep track of your dollar-based win-loss ratio. There are many ratios that you could use to gauge your performance, but a win-loss ratio based on dollar amounts is a useful marker of performance. It's simple to calculate if you keep records. Always record the dollars won or lost on each trade, then divide the dollars won by the dollars lost. (You could use a simple win-loss ratio comparing winning trades to losing trades, but if you ignore the dollar amounts, it's possible to obtain a reasonable win-loss ratio, but still mount substantial losses.)
If your dollar-based win-loss ratio is 100% or lower, you are bound to blow out your account over time. In order to survive, you must increase the ratio. Seasoned traders tend to have a ratio of 200%, in other words, for every dollar they lose, they win $2. Some professionals have a ratio of 400%.
Why do some traders have low win-loss ratios? One of the reasons is that they don't look at the potential risk before they make a trade. They take setups that are overly risky and unlikely to produce a profit. Rather than take the trade, they would be better off waiting for a better trading opportunity, a trade setup that potentially could provide large profits and little risk. It's not easy. It takes patience, and a strong commitment to study the markets and identify good setups. But, in the end, it's worth it. If you carefully select high probability setups, you'll trade more profitably and you'll be more satisfied with your performance. Suddenly, you'll find that you'll get on a roll and your profits will increase greatly over time. By carefully monitoring your performance and managing your risk, you'll see your profits reach new highs. So as hard as it is, don't be afraid to ask, "How am I doing?" It's better to find out, change your approach, and make the profits you desire. And when you do, the answer to the question will be an enthusiastic, "I'm doing great!"
It is vital to monitor your trading performance on a trade-by-trade basis. It is useful to keep track of your dollar-based win-loss ratio. There are many ratios that you could use to gauge your performance, but a win-loss ratio based on dollar amounts is a useful marker of performance. It's simple to calculate if you keep records. Always record the dollars won or lost on each trade, then divide the dollars won by the dollars lost. (You could use a simple win-loss ratio comparing winning trades to losing trades, but if you ignore the dollar amounts, it's possible to obtain a reasonable win-loss ratio, but still mount substantial losses.)
If your dollar-based win-loss ratio is 100% or lower, you are bound to blow out your account over time. In order to survive, you must increase the ratio. Seasoned traders tend to have a ratio of 200%, in other words, for every dollar they lose, they win $2. Some professionals have a ratio of 400%.
Why do some traders have low win-loss ratios? One of the reasons is that they don't look at the potential risk before they make a trade. They take setups that are overly risky and unlikely to produce a profit. Rather than take the trade, they would be better off waiting for a better trading opportunity, a trade setup that potentially could provide large profits and little risk. It's not easy. It takes patience, and a strong commitment to study the markets and identify good setups. But, in the end, it's worth it. If you carefully select high probability setups, you'll trade more profitably and you'll be more satisfied with your performance. Suddenly, you'll find that you'll get on a roll and your profits will increase greatly over time. By carefully monitoring your performance and managing your risk, you'll see your profits reach new highs. So as hard as it is, don't be afraid to ask, "How am I doing?" It's better to find out, change your approach, and make the profits you desire. And when you do, the answer to the question will be an enthusiastic, "I'm doing great!"
posted by nomadhunter at 6:29 PM
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July 23, 2006
July 20, 2006
Waiting For the Right Time
Real traders execute trades all day, every day. Don’t they? There are times when it may be useful to stand aside, especially when you cannot cultivate the proper mental edge.
Many traders can’t stand the idea of missing out on trading opportunities. They feel they must always search for a winning trading opportunity and put on trade after trade all day long, regardless of the likelihood of the setups producing a win. There may be a few good reasons to stand aside, however. Market conditions may not be optimal for your style of trading. You may be in a slump and unable to trade in the zone. Or you may just feel like taking the day off. Trading isn’t the same as working on an assembly line. It’s not as if you can put on trade after trade as if you are bolting on wheel after wheel. Trading requires an intuitive feel for the markets. You must be in sync with the market action to the point that you perceive solid high probability setups. High probability setups are not always there, and even when they are there, you may not see them.
A proper mental edge is vital for trading success, and there are times when you just don’t have it. You may be tired and unable to concentrate fully. You may have just faced a series of setbacks and cannot seem to talk yourself out of a slump. You may feel so stressed because of a series of losses you have recently mounted that you have trouble coping with even a minor setback. When you are thrown off your game by these circumstances, it is necessary to stand aside and regain your composure. By taking a break from the markets, you can regain your confidence. Let’s consider a few ways that you can regain your mental edge.
First, make sure you are well rested. When we are tired, we have difficulty coming up with clever solutions to problems. In addition, coping with stress requires energy, and when you are tired, you just don’t have enough energy to cope. The best solution is to make sure that you get enough sleep at night. That may require that you get to bed early, especially if you live on the West coast. Early to bed, early to rise…the old adage is often apt for trading the markets.
Second, reduce your stress levels as much as possible. Entering the zone requires the proper match between your skills and the difficulty of your goals. When you have inadequate skills for the goals that you are trying to achieve, you feel stress, and don’t enter the zone. On the other hand, if you don’t feel challenged, you will feel bored, dull, and unmotivated. Developing realistic trading objectives that are challenging yet achievable will help you enter the zone. For example, don’t expect to make an unrealistic level of profit on each trade. Be realistic. When you try to achieve realistic goals, you will see how you can achieve them and naturally reward yourself as you make progress. If your goals are too difficult, however, you will choke under the pressure.
Third, patiently wait for the right time to trade. You have to go where the markets take you, and sometimes, market conditions are just not optimal. It is necessary to wait for market conditions that suit your trading style. When a host of factors match, from your mindset to market conditions, you will enter the zone and take home enormous profits.
Many traders can’t stand the idea of missing out on trading opportunities. They feel they must always search for a winning trading opportunity and put on trade after trade all day long, regardless of the likelihood of the setups producing a win. There may be a few good reasons to stand aside, however. Market conditions may not be optimal for your style of trading. You may be in a slump and unable to trade in the zone. Or you may just feel like taking the day off. Trading isn’t the same as working on an assembly line. It’s not as if you can put on trade after trade as if you are bolting on wheel after wheel. Trading requires an intuitive feel for the markets. You must be in sync with the market action to the point that you perceive solid high probability setups. High probability setups are not always there, and even when they are there, you may not see them.
A proper mental edge is vital for trading success, and there are times when you just don’t have it. You may be tired and unable to concentrate fully. You may have just faced a series of setbacks and cannot seem to talk yourself out of a slump. You may feel so stressed because of a series of losses you have recently mounted that you have trouble coping with even a minor setback. When you are thrown off your game by these circumstances, it is necessary to stand aside and regain your composure. By taking a break from the markets, you can regain your confidence. Let’s consider a few ways that you can regain your mental edge.
First, make sure you are well rested. When we are tired, we have difficulty coming up with clever solutions to problems. In addition, coping with stress requires energy, and when you are tired, you just don’t have enough energy to cope. The best solution is to make sure that you get enough sleep at night. That may require that you get to bed early, especially if you live on the West coast. Early to bed, early to rise…the old adage is often apt for trading the markets.
Second, reduce your stress levels as much as possible. Entering the zone requires the proper match between your skills and the difficulty of your goals. When you have inadequate skills for the goals that you are trying to achieve, you feel stress, and don’t enter the zone. On the other hand, if you don’t feel challenged, you will feel bored, dull, and unmotivated. Developing realistic trading objectives that are challenging yet achievable will help you enter the zone. For example, don’t expect to make an unrealistic level of profit on each trade. Be realistic. When you try to achieve realistic goals, you will see how you can achieve them and naturally reward yourself as you make progress. If your goals are too difficult, however, you will choke under the pressure.
Third, patiently wait for the right time to trade. You have to go where the markets take you, and sometimes, market conditions are just not optimal. It is necessary to wait for market conditions that suit your trading style. When a host of factors match, from your mindset to market conditions, you will enter the zone and take home enormous profits.
posted by nomadhunter at 6:18 PM
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July 19, 2006
July 18, 2006
Patience
Our patience will achieve more than our force.
Edmund Burke
Edmund Burke
posted by nomadhunter at 6:20 PM
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I Want It Now
In contemporary society, we constantly hear the message, "Don't wait. Get it now!" Credit card debt has skyrocketed in the past decade. Rather than patiently wait, people buy what they want immediately, when they want it. This happens in the trading realm as well. Rather than wait for a trade to come to fruition, traders are infamous for selling prematurely to lock in profits. Or when the slightest dip occurs, many traders sell out of fear. Patience is a virtue while trading, however. Once you execute a trade, you must wait patiently to see what will happen in the end.
Why can we wait patiently? Part of the reason can be found in our belief systems. When we think, "I must have it now," we start to believe that we cannot wait. We believe that we cannot maintain self-control. When we see that a position has a gain on paper, we start to imagine how great it would feel to take home the profits. Even if we don't need the money at the moment, we think of how pleasurable it would be to spend our newfound wealth, and suddenly, we can't wait.
Rather than viewing money in play as actual money, it's useful to mentally transform the money into something else. Rather than thinking of what you can buy with money, it is necessary to view it abstractly, as nothing more than numbers, like temperature readings or gallons of gas you have left in your tank when driving on a long journey. Of course, there is actual money on the line, but it doesn't help to think of it that way. Again, it's vital to view money as percentage points or just abstract numbers that don't relate to anything tangible. If you are able to objectify capital, you can more easily maintain discipline. If you see money as nothing more than a vehicle for making trades, you will be able to avoid acting out of fear and greed. It's just trading capital. Don't see it as car payments, luxury items, or house payments. It may seem like an intellectual exercise, but it works. The more you can objectify the money you put on the line with each trade, the more you can act logically and unemotionally.
Another common reason that traders have trouble reining in their impulses is that they are tired and worn out. Self-control requires psychological energy and when you are tired, it is difficult to devote the proper level of psychological energy to maintaining self-control. You are easily distracted and even the slightest amount of stress can upset you. During these times, you may be prone to impulsive decisions. The best antidote is to get plenty of rest. The more rested you are, the more easily you can control your impulses.
Other strategies for maintaining control are useful. Avoid looking at your screen unnecessarily. It's like looking at a slot machine and trying not to play. In addition, always remember to follow a detailed trading plan; don't leave any aspect unspecified, or you'll be tempted to abandon your plan prematurely.
As much as you may think you need immediate pleasure, you don't. You can wait for a trade to come to fruition. If you wait calmly and follow your trading plan, you will increase your odds of success, and end up with a lot more profits later.
Why can we wait patiently? Part of the reason can be found in our belief systems. When we think, "I must have it now," we start to believe that we cannot wait. We believe that we cannot maintain self-control. When we see that a position has a gain on paper, we start to imagine how great it would feel to take home the profits. Even if we don't need the money at the moment, we think of how pleasurable it would be to spend our newfound wealth, and suddenly, we can't wait.
Rather than viewing money in play as actual money, it's useful to mentally transform the money into something else. Rather than thinking of what you can buy with money, it is necessary to view it abstractly, as nothing more than numbers, like temperature readings or gallons of gas you have left in your tank when driving on a long journey. Of course, there is actual money on the line, but it doesn't help to think of it that way. Again, it's vital to view money as percentage points or just abstract numbers that don't relate to anything tangible. If you are able to objectify capital, you can more easily maintain discipline. If you see money as nothing more than a vehicle for making trades, you will be able to avoid acting out of fear and greed. It's just trading capital. Don't see it as car payments, luxury items, or house payments. It may seem like an intellectual exercise, but it works. The more you can objectify the money you put on the line with each trade, the more you can act logically and unemotionally.
Another common reason that traders have trouble reining in their impulses is that they are tired and worn out. Self-control requires psychological energy and when you are tired, it is difficult to devote the proper level of psychological energy to maintaining self-control. You are easily distracted and even the slightest amount of stress can upset you. During these times, you may be prone to impulsive decisions. The best antidote is to get plenty of rest. The more rested you are, the more easily you can control your impulses.
Other strategies for maintaining control are useful. Avoid looking at your screen unnecessarily. It's like looking at a slot machine and trying not to play. In addition, always remember to follow a detailed trading plan; don't leave any aspect unspecified, or you'll be tempted to abandon your plan prematurely.
As much as you may think you need immediate pleasure, you don't. You can wait for a trade to come to fruition. If you wait calmly and follow your trading plan, you will increase your odds of success, and end up with a lot more profits later.
posted by nomadhunter at 6:18 PM
0 comments
July 17, 2006
A Realistic And Objective View Of The Markets
You sit alone staring at your screens in silence. It's just you and the markets. It can be lonely at times, so lonely that it's tempting to view the markets as a person. Indeed, financial reporters who are fond of covering the market in dramatic ways talk about the markets as if they are alive: "Like a marathon runner, every bull market has to pause and get its breath once in a while before it sprints higher." Or you may hear a reporter say, "The claws of this bear market ripped right through the last shred of resistance. Nothing can stop it when it gets its blood boiling!" Other reporters may imbue the market action with a life force: "The market saw a chance to bolt through some resistance today and dashed for 50 large ones." As much as we have a need to personify the market, it has no eyes. It has no legs. It has no blood to boil. It can't "see" or "bolt" or "gorge" or "claw." As much as we want and need to view the market as a person, it's best to see it as nothing more than changes in prices, which may reflect the actions of a collection of market participants, but essentially is nothing more than abstract movements.
Once you start looking at the markets as a person, you lose your objectivity. You begin to impose your thought process onto the market as if you are interacting with a person. But it's not a person. It's just a thing.
It is hard to stay unemotional and detached, and when you personify markets, you may be prone to allow your emotions to influence the decisions you make about trades. You may feel angry when the markets move against you, or afraid and on edge if you believe the markets can change course as if it were fickle. The more experience you gain as a trader, however, the more you will see that the markets hardly act like people with consistent motives and agendas. The markets are not living beings, so you might as well see the markets realistically as nothing more than a reflection of unpredictable forces. It makes sense to be a little afraid, but it doesn’t make sense to take it all so personally. The market is virtually an inanimate object. There’s no need to get overly upset when things don’t go your way. That isn’t to say that the markets don’t seem to act chaotically at times. The markets may sometimes act like a crazy person. It’s vital to protect yourself. For example, limit your risk. If you make the outcome of a single trade relatively insignificant, you will be able to remain more detached. Similarly, trade with money you can afford to lose. If you know that a loss can actually hurt you, it will be difficult to convince yourself that the outcome of a trade doesn't matter. The more you can believe that an outcome truly doesn't matter, the easier it will be to remain detached and objective. So don’t personify the markets. The markets aren’t alive and you shouldn’t treat them as if they are. When you approach the markets as if it is an inanimate object, you will stay detached and be able to trade freely, effortlessly, and profitably.
Once you start looking at the markets as a person, you lose your objectivity. You begin to impose your thought process onto the market as if you are interacting with a person. But it's not a person. It's just a thing.
It is hard to stay unemotional and detached, and when you personify markets, you may be prone to allow your emotions to influence the decisions you make about trades. You may feel angry when the markets move against you, or afraid and on edge if you believe the markets can change course as if it were fickle. The more experience you gain as a trader, however, the more you will see that the markets hardly act like people with consistent motives and agendas. The markets are not living beings, so you might as well see the markets realistically as nothing more than a reflection of unpredictable forces. It makes sense to be a little afraid, but it doesn’t make sense to take it all so personally. The market is virtually an inanimate object. There’s no need to get overly upset when things don’t go your way. That isn’t to say that the markets don’t seem to act chaotically at times. The markets may sometimes act like a crazy person. It’s vital to protect yourself. For example, limit your risk. If you make the outcome of a single trade relatively insignificant, you will be able to remain more detached. Similarly, trade with money you can afford to lose. If you know that a loss can actually hurt you, it will be difficult to convince yourself that the outcome of a trade doesn't matter. The more you can believe that an outcome truly doesn't matter, the easier it will be to remain detached and objective. So don’t personify the markets. The markets aren’t alive and you shouldn’t treat them as if they are. When you approach the markets as if it is an inanimate object, you will stay detached and be able to trade freely, effortlessly, and profitably.
posted by nomadhunter at 10:57 PM
0 comments
BCT Technology
To be listed BCT Technology is valued at RM1.20.
posted by nomadhunter at 7:40 PM
0 comments
July 16, 2006
July 13, 2006
When You're Stuck, Start Small, And Build Momentum
In the trading business, there is pressure to succeed. Whether you trade part time or are trying to support yourself solely from your trading profits, it's hard not to want success. Think of all the advantages of having enough money to buy whatever you want: new cars, a bigger house, or a lavish lifestyle. If you believe the commercials on television, money can indeed buy happiness. Although we know deep down that money cannot buy happiness, we are often tempted by the values of our consumer society that tell us that it can. And when we are obsessed with making money, we start to believe that we absolutely must make the profits we desire. What usually happens next, however, is that we choke under the pressure. Our mind is consumed with how much money we must make, and we have trouble thinking calmly and clearly. Rather than looking forward to making our next trade, we cower. We dread making that next trade because we know that the actual profits we can make will fall short of our expectations. Suddenly, we are stuck in neutral. We sit motionless, unwilling to put on the next trade. This is a dangerous place to be. When we feel psychologically stuck, we are likely to trade in a lackadaisical state of mind. We don't search for the optimal trading setups, and we are easily discouraged.
When we set goals that exceed our skills, we know deep down that we can't reach them. We believe we will fail even before we try, and so we just give up. When we are obsessed with reaching a high performance standard, we feel uneasy. When this happens, it's necessary to relax, and set more modest goals. Rather than stress yourself out, you can think of goals that you can easily reach and try to build momentum after some initial success. For example, you may think, "I'm going to study a few hours and learn a new trading technique." This specific goal may not make you rich immediately, but it is easy to achieve, and will lead to personal satisfaction upon completion. It will get your mind going and you will start to feel motivated.
Next, you might try to build momentum by trying to do what you do best. Identify your best trading approach, and start doing it to build up some momentum. For example, if you know how to pick, and use, a particular trading method that works under a specific set of market conditions, use this method repeatedly to make progress. If you make the most profitable trades right before lunch, then trade at that moment, which is a time you feel most comfortable and are likely to make a profit. The key is to start small and work from there. Once you achieve a little success, you will start the ball rolling and start to trade more freely and creatively. You'll find that you can transform a slump into a productive work session. So don't get discouraged. Set modest goals, and get to work. You will start making profits in no time.
When we set goals that exceed our skills, we know deep down that we can't reach them. We believe we will fail even before we try, and so we just give up. When we are obsessed with reaching a high performance standard, we feel uneasy. When this happens, it's necessary to relax, and set more modest goals. Rather than stress yourself out, you can think of goals that you can easily reach and try to build momentum after some initial success. For example, you may think, "I'm going to study a few hours and learn a new trading technique." This specific goal may not make you rich immediately, but it is easy to achieve, and will lead to personal satisfaction upon completion. It will get your mind going and you will start to feel motivated.
Next, you might try to build momentum by trying to do what you do best. Identify your best trading approach, and start doing it to build up some momentum. For example, if you know how to pick, and use, a particular trading method that works under a specific set of market conditions, use this method repeatedly to make progress. If you make the most profitable trades right before lunch, then trade at that moment, which is a time you feel most comfortable and are likely to make a profit. The key is to start small and work from there. Once you achieve a little success, you will start the ball rolling and start to trade more freely and creatively. You'll find that you can transform a slump into a productive work session. So don't get discouraged. Set modest goals, and get to work. You will start making profits in no time.
posted by nomadhunter at 6:08 PM
0 comments
July 12, 2006
July 11, 2006
The Price Of Perfection
Striving for excellence motivates you; striving for perfection is demoralizing.
Harriet Braiker
Harriet Braiker
posted by nomadhunter at 6:33 PM
0 comments
Back In The Zone
Trading can be especially enjoyable when you are trading at your peak. There are times when everything just seems to click as you move effortlessly with the ebb and flow of the market. There are various names for this optimal state of mind, such as "trading in the zone" or "flowing with the markets." But whatever you call it, traders in this ideal mental state almost completely lose themselves in what they are doing. They are focused only on the ongoing process of the moment. They are not self-conscious, concerned with how well they are doing or worried about doing poorly. Their complete attention is focused on trading. Unfortunately, we are not always in this optimal state of mind. We get thrown off our game. We experience setbacks, and when we face disappointments, we lose our mental edge. When we are out of sync with the markets, it's useful to get back in the zone. The best way to regain your mental edge is to look at your assumptions about trading. Many times, we put too much pressure on ourselves, expecting miracles when we are merely humans.
It is all right to be naïve. Many times we believe we must have perfect knowledge and know exactly what will happen next. But few people have such a wealth of experience with the markets that they can anticipate every possible market move or adverse event. Always remember that you are human. You cannot know everything, and that is all right.
And because you are human, it is vital to remember that you are not perfect. It's useful to approach trading with the mindset, "I can make occasional mistakes. It's understandable." It's impossible as a trader to be thoroughly competent, adequate, and achieving all the time. Certainly, you should develop an extremely detailed trading plan and try to account for all adverse events that may go against your plan, but there are limits to what you can do. Your trading idea may just not pan out, and there's little you can do about it besides taking proactive steps, such as managing risk and having clearly defined exit strategies to protect your long term financial interests. Holding yourself up to unrealistic standards is just going to make you feel frustrated, fearful, and unnecessarily uptight. By accepting your limitations, and trying to work around them, you'll feel more at ease, and ready to capitalize on a high probability setup when you come across it.
It's also vital to take losses in stride. You can lose money and allow yourself to not feel like a loser. It's hard to take losses, and when you encounter a string of losers, it's natural to feel shaken and uncertain. But the worst thing you can do is stay on the ground after you have taken a fall. It's useful to get back in the zone. You may decide to scale back and make a few small trades to try to regain your edge. Or you may decide to stand aside and merely study the markets in order to get a feel for how the markets are moving. Whatever you do, however, don't stand still. Keep moving, even if it is just thinking rather than acting. If you can keep your mind moving and trying to solve problems, you will regain your mental edge.
It's easy to get thrown off by setbacks and lose your mental edge, but there is a big difference between feeling permanently beaten and temporarily off your game. If you keep problem solving and try to take active steps to get back into the zone, you will get there, and feel like a winning trader once again.
It is all right to be naïve. Many times we believe we must have perfect knowledge and know exactly what will happen next. But few people have such a wealth of experience with the markets that they can anticipate every possible market move or adverse event. Always remember that you are human. You cannot know everything, and that is all right.
And because you are human, it is vital to remember that you are not perfect. It's useful to approach trading with the mindset, "I can make occasional mistakes. It's understandable." It's impossible as a trader to be thoroughly competent, adequate, and achieving all the time. Certainly, you should develop an extremely detailed trading plan and try to account for all adverse events that may go against your plan, but there are limits to what you can do. Your trading idea may just not pan out, and there's little you can do about it besides taking proactive steps, such as managing risk and having clearly defined exit strategies to protect your long term financial interests. Holding yourself up to unrealistic standards is just going to make you feel frustrated, fearful, and unnecessarily uptight. By accepting your limitations, and trying to work around them, you'll feel more at ease, and ready to capitalize on a high probability setup when you come across it.
It's also vital to take losses in stride. You can lose money and allow yourself to not feel like a loser. It's hard to take losses, and when you encounter a string of losers, it's natural to feel shaken and uncertain. But the worst thing you can do is stay on the ground after you have taken a fall. It's useful to get back in the zone. You may decide to scale back and make a few small trades to try to regain your edge. Or you may decide to stand aside and merely study the markets in order to get a feel for how the markets are moving. Whatever you do, however, don't stand still. Keep moving, even if it is just thinking rather than acting. If you can keep your mind moving and trying to solve problems, you will regain your mental edge.
It's easy to get thrown off by setbacks and lose your mental edge, but there is a big difference between feeling permanently beaten and temporarily off your game. If you keep problem solving and try to take active steps to get back into the zone, you will get there, and feel like a winning trader once again.
posted by nomadhunter at 6:24 PM
0 comments
July 10, 2006
Green Packet
Green Packet, turbocharged by SONMetro, is valued at RM4.00.
posted by nomadhunter at 9:07 PM
0 comments
July 7, 2006
Winning At All Costs
"Damn The Torpedoes" was Admiral David Farragut's famous battle cry, and historically speaking, the decision to risk everything for an important victory during the Civil War battle at Mobile Bay worked out very well. But when you're taking risks to trade the markets, allowing yourself to get caught up in the moment and take on more than a prudent level of risk is almost certain to get you burned, sooner or later.
Many people unconsciously adopt a "damn the torpedoes" approach after either a big loss or a big gain in the markets. After a loss, you might hope to win it all back or even get ahead. After a gain, you might feel impervious to market forces. Either way, there's a possibility you're letting your emotions crowd out your more logical, sensible self, which is always a bad idea when trading the markets.
There's nothing more thrilling than anticipating what the markets will do and making a huge profit off of your astute observation. Not only do you feel on top of the world for getting it right, but the feeling of security from realizing a windfall is nice too. After a winning streak, it's tempting to let loose and start making some big trades. It is tempting to start thinking, "What do I have to lose? I'm far ahead of the game. I can take a little more risk." Although it is often useful to take advantage of a hot streak when you hit upon one, it doesn't mean that you should act recklessly. It's essential for long-term survival to maintain discipline and manage risk (for example, through protective stops, options, or risking a minimal amount of your account balance on a single trade). It is essential that you fight the urge to trade impulsively. You must maintain discipline.
What is the harm of taking unnecessary risks? Market uncertainty is the main reason. You really don't know with 100% certainty that your next set of trades will be wins. When you take unnecessary chances, it's as if you are working under the assumption that you will definitely win in the future. But no one has a crystal ball. Trading is about taking advantage of probabilities, and working under the assumption that if you make enough trades (and manage risk with each trade), the law of averages will work in your favor. That said, from the perspective of probability theory, it's possible that you will hit upon a string of wins, and by making larger trades and lowering your limits, you'll reap big rewards. But at the same time, you may also encounter a string of losers. If you act impulsively, or abandon your risk management plan, you'll tend to give back all your profits and more. It's vital for your long-term survival to continue to manage risk, even after a long string of successful trades.
It is tempting to feel you can abandon risk limits and go for the big wins no matter what the costs. Some of the most profitable Market Wizards have put their financial life on the line and made huge profits, but there are also those traders who spent the rest of their lives trying to pay back losses. In the long run, it's better to survive. By managing your risks, you will increase your odds of success.
Many people unconsciously adopt a "damn the torpedoes" approach after either a big loss or a big gain in the markets. After a loss, you might hope to win it all back or even get ahead. After a gain, you might feel impervious to market forces. Either way, there's a possibility you're letting your emotions crowd out your more logical, sensible self, which is always a bad idea when trading the markets.
There's nothing more thrilling than anticipating what the markets will do and making a huge profit off of your astute observation. Not only do you feel on top of the world for getting it right, but the feeling of security from realizing a windfall is nice too. After a winning streak, it's tempting to let loose and start making some big trades. It is tempting to start thinking, "What do I have to lose? I'm far ahead of the game. I can take a little more risk." Although it is often useful to take advantage of a hot streak when you hit upon one, it doesn't mean that you should act recklessly. It's essential for long-term survival to maintain discipline and manage risk (for example, through protective stops, options, or risking a minimal amount of your account balance on a single trade). It is essential that you fight the urge to trade impulsively. You must maintain discipline.
What is the harm of taking unnecessary risks? Market uncertainty is the main reason. You really don't know with 100% certainty that your next set of trades will be wins. When you take unnecessary chances, it's as if you are working under the assumption that you will definitely win in the future. But no one has a crystal ball. Trading is about taking advantage of probabilities, and working under the assumption that if you make enough trades (and manage risk with each trade), the law of averages will work in your favor. That said, from the perspective of probability theory, it's possible that you will hit upon a string of wins, and by making larger trades and lowering your limits, you'll reap big rewards. But at the same time, you may also encounter a string of losers. If you act impulsively, or abandon your risk management plan, you'll tend to give back all your profits and more. It's vital for your long-term survival to continue to manage risk, even after a long string of successful trades.
It is tempting to feel you can abandon risk limits and go for the big wins no matter what the costs. Some of the most profitable Market Wizards have put their financial life on the line and made huge profits, but there are also those traders who spent the rest of their lives trying to pay back losses. In the long run, it's better to survive. By managing your risks, you will increase your odds of success.
posted by nomadhunter at 9:08 AM
0 comments
July 6, 2006
3rd Quarter Strategy
3rd Quarter Strategy by OSK Research.
posted by nomadhunter at 7:49 PM
0 comments
Psychologically Aware And Financially Successful
The vast majority of market participants naively believe that trading is merely about finding profitable market opportunities. Although it is necessary to find high probability setups to make huge profits, shrewd, winning traders know that their personal psychology is the single most important factor in holding onto them. Trading experts will tell you that the proper mental edge makes all the difference. Many traders know what they should do when trading the markets, but somehow they don't do it. Instead, they hesitate. They are overconfident or not confident enough. They are afraid yet deny their fear and mask it with a false sense of omnipotence. They succumb to strong emotions that overpower their rational mind. The possible psychological ailments that prevent trading success seem endless. If we survive in the markets long enough, though, we eventually come to understand the importance of personal psychology.
Psychological ailments are powerful, but most of us can beat them. It isn't always easy. It requires a desire to improve and a long-term effort to let the change sink in and have lasting effect. It is vital for you to be aware of the psychological ailments that may plague you, and work steadily to overcome them.
Winning traders are logical rather than emotional, for example. You must learn the ways in which your emotions can play a significant role in your investment decisions. Fear and greed drive market decisions. When most people are afraid they impulsively sell prematurely or hang on to a losing trade with a sense of false hope. You cannot allow emotions to impact you. You must develop emotional control and self-discipline that keeps you taking the most prudent investment choices instead of the emotionally satisfying ones. Accomplishing this is not impossible, but it does take time and effort.
A successful trader is confident and decisive. Although many traders know exactly what they want to do in critical situations, very few can actually follow through and do it. The rest don't, mostly because they freeze. The disciplined approach is to increase your position sizes slowly, so you're emotionally comfortable at the levels you're trading, and also to consider your alternatives in advance so you know what to do, without having to think on your feet, in response to every market eventuality.
With the pressure and the high stakes involved with trading the markets, even the most well adjusted trader can fall prey to emotional decisions. But allowing emotions to influence you will interfere with following your plan, which will in turn diminish your account balance. To prevent this, psychologically sophisticated traders work to gain self-awareness and use tried and true psychological methods to hone and keep their mental edge. They develop relaxation techniques, for example, and practice them regularly before, during, and after the trading day. They also pay close attention to the reality of the markets, and let the fantasies sent forth by their anxieties wither on the vine. They don't dream of vast riches, but stay focused on day to day issues, such as what setups to take, where to exit, and how to control their risk. Finally, they learn to recognize when their instincts or subliminal perceptions are telling them correctly that something is amiss, and to temporarily step back from trading to deal with the issue. Don't let psychological issues get the better of you. If you gain psychological awareness, you will trade more profitably.
Psychological ailments are powerful, but most of us can beat them. It isn't always easy. It requires a desire to improve and a long-term effort to let the change sink in and have lasting effect. It is vital for you to be aware of the psychological ailments that may plague you, and work steadily to overcome them.
Winning traders are logical rather than emotional, for example. You must learn the ways in which your emotions can play a significant role in your investment decisions. Fear and greed drive market decisions. When most people are afraid they impulsively sell prematurely or hang on to a losing trade with a sense of false hope. You cannot allow emotions to impact you. You must develop emotional control and self-discipline that keeps you taking the most prudent investment choices instead of the emotionally satisfying ones. Accomplishing this is not impossible, but it does take time and effort.
A successful trader is confident and decisive. Although many traders know exactly what they want to do in critical situations, very few can actually follow through and do it. The rest don't, mostly because they freeze. The disciplined approach is to increase your position sizes slowly, so you're emotionally comfortable at the levels you're trading, and also to consider your alternatives in advance so you know what to do, without having to think on your feet, in response to every market eventuality.
With the pressure and the high stakes involved with trading the markets, even the most well adjusted trader can fall prey to emotional decisions. But allowing emotions to influence you will interfere with following your plan, which will in turn diminish your account balance. To prevent this, psychologically sophisticated traders work to gain self-awareness and use tried and true psychological methods to hone and keep their mental edge. They develop relaxation techniques, for example, and practice them regularly before, during, and after the trading day. They also pay close attention to the reality of the markets, and let the fantasies sent forth by their anxieties wither on the vine. They don't dream of vast riches, but stay focused on day to day issues, such as what setups to take, where to exit, and how to control their risk. Finally, they learn to recognize when their instincts or subliminal perceptions are telling them correctly that something is amiss, and to temporarily step back from trading to deal with the issue. Don't let psychological issues get the better of you. If you gain psychological awareness, you will trade more profitably.
posted by nomadhunter at 6:26 PM
0 comments
Crystal Ball
He who lives by the crystal ball soon learns to eat ground glass.
Edgar R. Fiedler
Edgar R. Fiedler
posted by nomadhunter at 1:14 AM
0 comments
Reasoning
He who will not reason, is a bigot; he who cannot, is a fool; and he who dares not, is a slave.
Sir William Drummond
Sir William Drummond
posted by nomadhunter at 1:09 AM
0 comments
July 5, 2006
Rubber Gloves Sector
Rubber Gloves Sector - sustainable growth.
posted by nomadhunter at 7:41 PM
0 comments
July 4, 2006
July 3, 2006
Plan The Trade
When your money is on the line, it's natural to feel afraid. As much as you try to forget, it's hard not to worry about losing money. There are times when you may feel so panicked by the chaotic moves of the markets that you can't think clearly. You may feel agitated and on edge. It is at times like these that you need to do anything you can to keep calm and trade with discipline. One of the best strategies is to trade a detailed trading plan.
A detailed trading plan can help you stay calm during the storm of market action. Before you execute a trade, specify precisely how and when you will enter, the signals that indicate that the market may be going against your trade, and how and when you will exit. Many unprofitable traders don't carefully plan their trades. They impulsively execute a trade and then think they can develop the plan as they go along. What usually happens is that they panic easily because they don't know what to do and when to do it. It's hard to think on your feet, especially when your thinking is blurry because you are afraid of losing money. A detailed trading plan helps you stay focused. The more clearly the plan is laid out, the easier it is to follow, especially when you are agitated and upset. And when the plan is easy to follow, it's likely that you'll stick with it. You'll be disciplined and in control of your emotions and thought processes.
The difference between winning traders and unprofitable ones is the ability to muster unwavering self-control in response to chaotic, ever-changing markets. Trading is serious business. It's not a hobby, but many traders approach the endeavor as if it were recreational gambling. They don't develop a trading plan, and if they do, they tend to abandon it prematurely. Winning traders, however, are methodical. They carefully develop a trading plan, execute it, and stick with their plan. If you want to trade profitably, develop well defined trading plans and follow them.
A detailed trading plan can help you stay calm during the storm of market action. Before you execute a trade, specify precisely how and when you will enter, the signals that indicate that the market may be going against your trade, and how and when you will exit. Many unprofitable traders don't carefully plan their trades. They impulsively execute a trade and then think they can develop the plan as they go along. What usually happens is that they panic easily because they don't know what to do and when to do it. It's hard to think on your feet, especially when your thinking is blurry because you are afraid of losing money. A detailed trading plan helps you stay focused. The more clearly the plan is laid out, the easier it is to follow, especially when you are agitated and upset. And when the plan is easy to follow, it's likely that you'll stick with it. You'll be disciplined and in control of your emotions and thought processes.
The difference between winning traders and unprofitable ones is the ability to muster unwavering self-control in response to chaotic, ever-changing markets. Trading is serious business. It's not a hobby, but many traders approach the endeavor as if it were recreational gambling. They don't develop a trading plan, and if they do, they tend to abandon it prematurely. Winning traders, however, are methodical. They carefully develop a trading plan, execute it, and stick with their plan. If you want to trade profitably, develop well defined trading plans and follow them.
posted by nomadhunter at 7:09 PM
0 comments
July 2, 2006
July 1, 2006
Getting Back Your Winning Edge
Trading is a tough business. Losses are commonplace when trading. It is necessary to make trade after trade and pick yourself up after each setback. The winning trader keeps things in perspective, however. All that matters in the end is the big picture: the profits you make across a series of trades. But picking yourself up after a setback is often easier said than done. When you are beaten down by a series of setbacks, it can be hard to get back up.
When we feel beaten down, it's easy to start mulling over what we did wrong. It's easy to start feeling sorry for yourself. Suddenly all our failures seem to be at the forefront, while all our successes seem like flukes that are of little relevance. Rather than remember our many wins, we tend to remember every single loss, and may start to think that we may never make a winning trade again. Since trading is so challenging, it's easy to fall prey to disappointment. Unless you pick yourself up and start fighting back, you could end up feeling so bad that you stagnate. You don't look for profitable opportunities so you actually do not profit, or you may make so many trading errors that you dig yourself into a financial hole that you cannot climb out of. Before a bad mood sets off a downward spiral, it's vital to feel better, and fast!
How can we feel better? How can we regain our mental edge? Dr. Ari Kiev suggests allowing discouraging thoughts to enter our consciousness briefly, and then letting it go. Trying to ignore or push an unpleasant thought out of your mind often takes more psychological resources than just acknowledging how bad you feel and allowing the thought to leave your mind as quickly as it came in. It's also important to avoid feeling bad about feeling bad. Some people are reluctant to experience unpleasant emotions. They feel guilty about feeling disappointed, but feeling guilty about feeling bad emotions just makes things worse. Don't be afraid to explore your feelings. As long as you don't obsess about them, mulling over them again and again, feeling bad for a little while can be healthy.
Another way to pick yourself up after a defeat is to think of the times you have won. By reading over a list of triumphs, you'll pick yourself up and start to feel better. When feeling disappointed, it can also be useful to try to distract yourself. Try to think of something else besides your bad mood. You might try imaging yourself doing something fun, such as playing your favorite sport or going to your favorite nightclub. The idea is to forget about how bad you are feeling at the moment, and to think about a more pleasant activity that makes you happy. And when you are feeling really bad, it may be necessary to do a physical activity that makes you feel better. Research studies have shown that physical activity is one of the best ways to get rid of a bad mood.
Trading in the proper mindset is vital for success. When you trade in a bad mood, you may make trading errors. It's vital to remain upbeat, calm and relaxed. When you trade in an optimal state of mind, you can concentrate more easily, execute trades flawlessly, and increase your chances of success.
When we feel beaten down, it's easy to start mulling over what we did wrong. It's easy to start feeling sorry for yourself. Suddenly all our failures seem to be at the forefront, while all our successes seem like flukes that are of little relevance. Rather than remember our many wins, we tend to remember every single loss, and may start to think that we may never make a winning trade again. Since trading is so challenging, it's easy to fall prey to disappointment. Unless you pick yourself up and start fighting back, you could end up feeling so bad that you stagnate. You don't look for profitable opportunities so you actually do not profit, or you may make so many trading errors that you dig yourself into a financial hole that you cannot climb out of. Before a bad mood sets off a downward spiral, it's vital to feel better, and fast!
How can we feel better? How can we regain our mental edge? Dr. Ari Kiev suggests allowing discouraging thoughts to enter our consciousness briefly, and then letting it go. Trying to ignore or push an unpleasant thought out of your mind often takes more psychological resources than just acknowledging how bad you feel and allowing the thought to leave your mind as quickly as it came in. It's also important to avoid feeling bad about feeling bad. Some people are reluctant to experience unpleasant emotions. They feel guilty about feeling disappointed, but feeling guilty about feeling bad emotions just makes things worse. Don't be afraid to explore your feelings. As long as you don't obsess about them, mulling over them again and again, feeling bad for a little while can be healthy.
Another way to pick yourself up after a defeat is to think of the times you have won. By reading over a list of triumphs, you'll pick yourself up and start to feel better. When feeling disappointed, it can also be useful to try to distract yourself. Try to think of something else besides your bad mood. You might try imaging yourself doing something fun, such as playing your favorite sport or going to your favorite nightclub. The idea is to forget about how bad you are feeling at the moment, and to think about a more pleasant activity that makes you happy. And when you are feeling really bad, it may be necessary to do a physical activity that makes you feel better. Research studies have shown that physical activity is one of the best ways to get rid of a bad mood.
Trading in the proper mindset is vital for success. When you trade in a bad mood, you may make trading errors. It's vital to remain upbeat, calm and relaxed. When you trade in an optimal state of mind, you can concentrate more easily, execute trades flawlessly, and increase your chances of success.
posted by nomadhunter at 3:07 AM
0 comments
Trading Know How
Previous Posts
- Masteel Signed Agreement With Stemcor Australia
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