Tag Archives: losses

7 dirty words of trading.

This post orignally appeared in January 2011.  Be careful how you use the following words and phrases as they become road blocks or worse take you down the wrong path. Should– Phrases include: “The market should have” and “I should have”. Those phrases are often used to socialize losses. They are a strong signal somethingContinue Reading

Losses: Understanding value versus cost.

In a Bronx Tale, after C loans $20 to a guy who wont pay and he does not even like, Sonny explains that for $20 he never has to see him again. Louie! My grandmother’s sick. I’ll talk to you later, I gotta go do something. Where’s my f*cking money?  You’re fucking dead when I catch you,Continue Reading

Defeating Stockblockers

This post originally appeared Nov. 2010 and is still true.  I am not trying to add insult to injury here just a reminder that the loudest people are not always right.  Joshua Brown, from thereformedbroker.com, wrote an article about stockblockers. Below he illustrates the dangers of stockblockers: Don’t let the ill-informed, click-obsessed bloggers keep you on the sidelines withContinue Reading

Getting undressed by window dressing…

Window dressing occurs when a trader is short and the market rallies and until recently was only limited to the end of month but it now can occur at any point. See many trades tell themselves lies. For example, there is only one way to make money. That if you make money doing one thingContinue Reading

Trading or trading porn?

..if $SPY was up 3 days in a row into a FOMC day, it was also up that day 15/15 times. This is a tweet that was all over my timeline yesterday.  I don’t know the intention of the tweet nor the context.   I didn’t reach out to the guy to find out.  ButContinue Reading

This isn’t show friends it is show business.

It is easy to get caught up in the emotions of the market.  It is easy to take it personal. It is easy to think that the market has it out for you. Do not take the easy way out. The truth is, with the exception of a few big players, the market does notContinue Reading

JPM is not the only one at fault.

Much has been written about JP Morgans blow up and I have read very little with the exception of Kid Dynamite’s post.  The guy is relentless in his research and is way more qualified to talk about it than most people who have.  I did not even want to talk about this but the conversationContinue Reading

How you define an outcome (losing capital), changes future outcomes.

(From the archives) Redefining or changing a word in a sentence can provide the necessary psychological shift to see things in a different way. This different perspective can lead to different results (hopefully positive). Probably the most common redefined word in finance is “Loss” which is turned into “Investment in Education” or “Tuition”. I amContinue Reading

How expectations will destroy you.

In most things success depends on knowing how long it takes to succeed. – Charles de Montesquieu That great quote came across my twitter feed from @PhilosophersSay via @eminiplayer.  It best sums up expectation and is extremely useful in trading.  The most simple thing I can say about expectations in trading is that at first youContinue Reading

Dangers of trading in small and distributed days.

There is danger in every type of market but nothing scares me quite like small and distributed days.  Here are the dangers as I see it: Boredom: I lose that sharpness.  Watching a market trade in a few dollar range is one of the more painful, energy sucking circumstances in trading.  It provides a very false senseContinue Reading

The services and materials provided should not to be interpreted as investment advice, an endorsement of any security, commodity, future, or personal investment advice, or an offer to buy, sell, hold or trade futures, options or commodity interests or a recommendation to buy, sell, hold or trade futures, options or commodity interests. You assume the entire cost and risk of investing and are solely responsible for any and all gains and losses, financial, emotional, or otherwise, experienced, suffered, or incurred by you.