Title: Developing a Trading Plan
Hc - May 29, 2005 02:16 PM (GMT)
Developing a Trading Plan
"Nobody cares about your money as much as you do."
Interest read here:
http://www.learninvesting.com/modules.php?...showpage&pid=22
"Nobody cares about your money as much as you do."
Interest read here:
http://www.learninvesting.com/modules.php?...showpage&pid=22
Hc - May 30, 2005 02:04 PM (GMT)
A message from someone lived 2000+ years ago for all, not just stock traders:
The art of war is of vital importance to the State. It is a matter of life and death, a road either to safety or to ruin. Hence it is a subject of inquiry which can on no account be neglected.
Sun Tzu
And his thought on planning which apply to trading too:
The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose.
Sun Tzu
The art of war is of vital importance to the State. It is a matter of life and death, a road either to safety or to ruin. Hence it is a subject of inquiry which can on no account be neglected.
Sun Tzu
And his thought on planning which apply to trading too:
The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose.
Sun Tzu
csk - July 2, 2005 03:30 AM (GMT)
Reposting... from "TA Books Recommendation & Discussion"
I was once asked what were the best indicators. I answered that you would have
to find out what work and what won't work for you.
The response quickly shot back like this:
"I don't want to re-invent the wheel! Just tell me what are the indicators that work."
I had to answer, "I don't know".
Until you come to the realization that human beings are born losers when it comes
to finance and investment, until you come to accept this, your search will be
fruitless no matter how many books you read. The mind play tricks with us. The
first thing to conquer is your mind. For within it are found greed and fear. These
two will destroy you even when you have the best arsenal.
I paid a lot of money to the market just to learn this and also wasted a lot of time.
But then I call this real-life experience that one accumlates day-to-day, month-to
-month, year-toyear.
I don't know of any books on this, I rely on Buddhist teachings of the mind. Books
on Buddhist teaching of the mind are free distribution. Your karmic relation plays
an important role on whether you will learn to tame your mind. For whether you
will search them out depends on your karma. Not mine, not someone else's but
yours.
Many people, including myself, started out by looking for books to learn about
technical indicators. This is the wrong path to take. I don't know which one to place
first; mind or money management. Both are the initial foundation. They must not
only be taught but learned at the kindergarten level. The indicators can come
later. Like in construction of a high rise building, the important stage is the soil
survey and the foundation piling. Not done properly, the building will collapse.
Although he shot himself in the head after failing to make another comeback,
Jesse Livermore left behind valuable teachings. He made and lost multi-million
dollars fortunes four times.
His book, Reminiscences Of A Stock Operator, will show you how the game
is played over and over again. You will also learn why he failed - greed and lack of
proper money management.
Unfortunately, there are no books specialising in money management in a practical
way. Forget about those by academics or Phds if they are not traders themselves.
They are useless. The good ones are found in chapters and usually at the back end.
Sad but true. The market demand is for indicators. That's what people want.
Remember that human beings are born losers in their money thinking. So
indicators books are plenty.
The best I can think of are the money management chapters found in these two
books:
The Dow Jones-Irwin Guide to Trading Systems
Bruce Babcock, Jr.
ISBN 1-55623-126-1
This book might have been renamed.
Trading Systems That Work
Thomas Stridsman
ISBN 0-07-135980-X
"Knowledgeable commodity traders have been suggesting for a number of years
that with proper money management a person could pick his entry points by
chance and still make money. For the average trader, spending hours and hours
refining his analytical techniques to no avail, that is a depressing thought. How
important is money management? Can it really make up for bad predictions? Very,
and yes. For the mechnical system trader, the time to make sure the system
adheres to proper money management principles is while you are creating and
testing your system. Once you start trading, it is too late.
Money management. Nice buzz words - but what do they really mean? There are
four important concepts in speculative money management: 1) Proper account
size, 2) Diversification, 3) Risk management, and 4) Trading multiple contracts."
Bruce Babcock, Jr.
If you did not learn the alphabet and numbers in kindergarten, you will not be able
to learn English, Maths and Science in primary school. If you did not learn English,
Maths and Science in primary school, you will not make it in secondary, JC and
university.
So go to kindergarten first.
I was once asked what were the best indicators. I answered that you would have
to find out what work and what won't work for you.
The response quickly shot back like this:
"I don't want to re-invent the wheel! Just tell me what are the indicators that work."
I had to answer, "I don't know".
Until you come to the realization that human beings are born losers when it comes
to finance and investment, until you come to accept this, your search will be
fruitless no matter how many books you read. The mind play tricks with us. The
first thing to conquer is your mind. For within it are found greed and fear. These
two will destroy you even when you have the best arsenal.
I paid a lot of money to the market just to learn this and also wasted a lot of time.
But then I call this real-life experience that one accumlates day-to-day, month-to
-month, year-toyear.
I don't know of any books on this, I rely on Buddhist teachings of the mind. Books
on Buddhist teaching of the mind are free distribution. Your karmic relation plays
an important role on whether you will learn to tame your mind. For whether you
will search them out depends on your karma. Not mine, not someone else's but
yours.
Many people, including myself, started out by looking for books to learn about
technical indicators. This is the wrong path to take. I don't know which one to place
first; mind or money management. Both are the initial foundation. They must not
only be taught but learned at the kindergarten level. The indicators can come
later. Like in construction of a high rise building, the important stage is the soil
survey and the foundation piling. Not done properly, the building will collapse.
Although he shot himself in the head after failing to make another comeback,
Jesse Livermore left behind valuable teachings. He made and lost multi-million
dollars fortunes four times.
His book, Reminiscences Of A Stock Operator, will show you how the game
is played over and over again. You will also learn why he failed - greed and lack of
proper money management.
Unfortunately, there are no books specialising in money management in a practical
way. Forget about those by academics or Phds if they are not traders themselves.
They are useless. The good ones are found in chapters and usually at the back end.
Sad but true. The market demand is for indicators. That's what people want.
Remember that human beings are born losers in their money thinking. So
indicators books are plenty.
The best I can think of are the money management chapters found in these two
books:
The Dow Jones-Irwin Guide to Trading Systems
Bruce Babcock, Jr.
ISBN 1-55623-126-1
This book might have been renamed.
Trading Systems That Work
Thomas Stridsman
ISBN 0-07-135980-X
"Knowledgeable commodity traders have been suggesting for a number of years
that with proper money management a person could pick his entry points by
chance and still make money. For the average trader, spending hours and hours
refining his analytical techniques to no avail, that is a depressing thought. How
important is money management? Can it really make up for bad predictions? Very,
and yes. For the mechnical system trader, the time to make sure the system
adheres to proper money management principles is while you are creating and
testing your system. Once you start trading, it is too late.
Money management. Nice buzz words - but what do they really mean? There are
four important concepts in speculative money management: 1) Proper account
size, 2) Diversification, 3) Risk management, and 4) Trading multiple contracts."
Bruce Babcock, Jr.
If you did not learn the alphabet and numbers in kindergarten, you will not be able
to learn English, Maths and Science in primary school. If you did not learn English,
Maths and Science in primary school, you will not make it in secondary, JC and
university.
So go to kindergarten first.
csk - July 2, 2005 03:31 AM (GMT)
Reposting... from "TA Books Recommendation & Discussion"
How important is soil survey and piling? How important is the foundation?
You will see this article in today's The Straits Times in the Home section on page H9:
Tilting building: 2 men, firm charged
Concrete piles were not deep enough, contrary to approved piling plan, say charges
"During the piling from Aug 18 to Oct 12 , 2000, the company allegedly deviated in a material way from the piling plan approved by the Commissioner of Bilding Control on Aug 17, 2000."
"Construction at the 27,580 sq ft site began five years ago, in July 2000 and the tilt, the result of soil problems, was discovered in 2002 as it was nearing completion."
So the technical indicators you learn and keep on each storey of the 30-storey building is of no use unless you rectify the foundation problem first.
"Early this year, Samsung made a deal with the building's owners - CapitaLand, the Singapore Chinese Chamber of Commerce and Industry, and the OCBC Group - to do full rectification works, scheduled to be completed by the end of this year."