Trading Aspirants

A Minus-Sum Game : Winners in a zero-sum game make as much as losers lose. If you and I bet $20 on the direction of the next 100-point move in the Dow, one of us will collect $20 and the other will lose $20. A single bet has a component of luck, but the more knowledgeable person will keep winning more often than losing over a period of time. People buy the industry’s propaganda about trading being a zero-sum game, take the bait, and open accounts. They don’t realize that trading is a minus-sum game. Winners receive less than what losers lose because the industry drains money from the markets. For example, roulette in a casino is a minus-sum game because the casino sweeps away between three and six percent of every bet. This makes roulette unwinnable in the long run. You and I can get into in a minus-sum game if we make the same $20 bet on the next 100-point move in the Dow through brokers. When we settle, the loser will be out $23, and the winner will collect only $17, ...

The Odds against You!! Why do most traders lose and wash out of the markets? Emotional and mindless trading are big reasons, but there is another. Markets are actually set up so that most traders must lose money. The trading industry slowly kills traders with commissions and slippage. You pay commissions for entering and exiting trades. Slippage is the difference between the price at which you place your order and the price at which it gets filled. When you place a limit order, it is filled at your price or better, or not at all. When you feel eager to enter or exit and place a market order, it’s often filled at a worse price than prevailed when you placed it. Most amateurs are unaware of the harm done by commissions and slippage, just as medieval peasants could not imagine that tiny invisible germs could kill them. If you ignore slippage and deal with a broker who charges high commissions, you’re acting like a peasant who drinks from a communal pool during a cholera epidemic....

Most Important to become successful trader?? Before you begin reading this post, ask  yourself: what’s the single most important step you can take to become a successful trader? Psychology is important. Since I was actively practicing psychiatry while writ- ing the original Trading for a Living, its psychology part stood the test of time and I changed it very little in this new edition. Market analysis is very important—but remember that when we look at a chart, we deal with only five pieces of data—the open, the high, the low, the close and volume. Piling up masses of indicators and patterns on top of those five values only increases confusion. Less is often more. If you’ve read Trading for a Living, you’ll see that I’ve reduced the number of technical chapters and moved some of them into a downloadable addendum. On the other hand, I added several new chapters that focus on new tools, notably the Impulse system. I also added a section on stops, profit targets and other pract...

The Mutual Fund Show: Investors Shouldn’t Be Scared Of Investing In Mid-Cap Funds Taking cues from previous trends while investing in the stock market may not be a wise move. An index that has given consistent returns in the past could be on the verge of a correction and the one...

Why Trade? Trading appears deceptively easy. A beginner may cautiously enter the market, win a few times, and start feeling brilliant and invincible. That’s when he starts taking wild risks and ends up with bad losses. People trade for many reasons—some rational and many irrational. Trading offers an opportunity to make a lot of money in a hurry. Money symbolizes freedom to many people, even though they often don’t know what to do with it. If you know how to trade, you can make your own hours, live and work anywhere you please, and never answer to a boss. Trading is a fascinating game: chess, poker, and a video game rolled into one. Trading attracts people who love challenges. It attracts risk-takers and repels those who avoid risk. An average person gets up in the morning, goes to work, has a lunch break, returns home, has a beer and dinner, watches TV, and goes to sleep. If he makes a few extra dollars, he puts them into a savings account. A trader keeps odd hour...

Psychology Is the Key Remember how you felt the last time you placed an order? Were you anxious to jump in or afraid of losing? Did you procrastinate before entering your order?When you closed out a trade, did you feel elated or humiliated? The feelings of thousands of traders merge into huge psychological tides that move the markets. Getting Off the Roller Coaster The majority of traders spend most of their time looking for good trades. Once they enter a trade, they don’t manage it but either squirm from pain or grin from pleasure. They ride an emotional roller coaster and miss the essential element of winning—the management of their emotions.Their inability to manage themselves leads to poor risk management and losses. If your mind is not in gear with the markets, or if you ignore changes in mass psychology of crowds, you have no chance of making money trading. All winning professionals know the enormous importance of psychology. Most losing amateurs ignore it. Friends and s...

Building Your Go to Market Strategy When you introduce a product or service to a new market, there’s always going to be some risk. Over 30,000 new products are introduced every year, but 95% of new products fail. You don’t want to spend time and resources on a go to market plan that’s going to fall flat. A comprehensive go to market strategy acts as a roadmap, helping you research your market, position your brand, and unveil your new product or service. But before we look at how to build a go to market strategy framework, just what is “go to market” and how do you build a strategy around it? What Is a Go to Market Strategy? So, what does “go to market” mean? A go to market strategy (sometimes called a GTM strategy) is a plan of action that lays out how your company will reach customers in a new target market and gain a competitive advantage over other players in that market. It can also refer to how you’ll reach customers in an existing market with a new produ...