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sync: yes, but this is just a small fraction of the material i use.You can find more for the time being at : http://radio.weblogs.com/0133588/ and www.deltat1.commainly relating to trading index futures
chico: hey there, i appreciate your exegesis on communication as it relates to economics. does this approach to stock analysis really help you predict specific stock movements, or do you have to be invested before you can make the analysis?
Hailey: What a sweet picture! Your site is very unique, neat material! Welcome to Bravenet!

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Sunday, June 27th 2004

10:50 PM

Mental Torture and Self Destructive Trades, Negative Intentions

Mental Torture and Self Destructive Trades, Negative Intentions
 




Someone who does not wish you well can poison your trading, to say the least.

People can be meek, helpful, caring, overbearing, gentle, gruff, controlling, hysterical or any number of descriptive phrases could summarize them at different times. Such personality traits don't all by themselves negatively affect someone.

Where a trader is concerned about self destructive tendencies in trading it is a good bet that that trader has someone in his life who intends that he fail.

Much like a mistuned musical instrument strained by abuse or neglect, such a person produces trades which are disturbing, as he knows he could do much better, and apparently for no reason doesn't.

Mental torture is a past time for some individuals. Insults and name calling intended only to disturb the genuine peace or state of mind of another carry with them distress.

In such an instance the originator of such disturbances must be dealt with, at which point the self destructive behavior in the trader may disappear.

Happiness is acheived through the attainment of goals. Almost any worthwhile goal ever stated has been opposed and belittled. The trick is, not to resist the belittlement, but to resolve it or remove its source.

Anyone discouraging you on a steady basis will establish a foothold in your psyche. The question is: do you want that?

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Sunday, June 27th 2004

10:37 PM

Mental Balance

  • Mood:

Mental Balance





Every trader can have a certain routine he establishes to get himself ready to trade. Many involve waking up with coffee or breakfast and looking over current market conditions.

Every trade is more or less prepared for in one way or another even if it is just clicking the mouse he just put his hand on.

There is a mental balance he establishes to convince himself to enter and also exit a trade. Every trade has two sides so every trade must have some decision seemingly beneficial to both sides of the trade.

If you look at this exact point you will see two opposing views of *every* trade. So it stands to reason that if you listen to other traders long enough you will get conflicting points of view on everything.

If you study everything with equal weight you will eventually be exposed to a complete conflict of views on any trade you could possibly make. Such a state of mind is described by some as "paralysis by analysis". It could simply be called mental confusion, or indecision.

If you were to assume that this is an undesirable state for a trader, what that trader would need to do would be to select his own method of approach to a trade and test them for his own satisfaction that they will be workable, if not perfect and use these methods exclusive of everyone else's viewpoint.

A trader without a viewpoint will end up without his own mental balance.

Daily tinkering with a working system due to someone's bright ideas is likely to lead a trader down a road to paralysis. Don't tinker with a working system.
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Sunday, June 27th 2004

10:33 PM

Risk Management: Patience and success in trading

Patience and success in trading
Risk Management: Patience and success in trading

"In the land of the blind, the one eyed man is King" - Erasmus

In entering trades consider beforehand what vision and edge you truely have. Getting caught up in a buy of a mature trend hoping that others will be greater fools than you takes no patience.

Sometimes a trade will present itself which you could not have waited for or expected and the thing not to do would be to pass on it, waiting for it to become perfect. Perfect opportunities rarely exist. Waiting for perfection on earth or in the markets might exceed anyone's patience.

It would be prudent in your trading approaches to find situations where you are the one eyed man in the land of the blind.

Don't trade where you need the vision of an eagle on a crisp autumn day, you seldom will have the reflexes to match your vision anyway.

Look for opportunities where you can profit from the exhausted sight of others.

Another analogy might badly mix with this one: don't attempt to pick up nickles in front of Bulldozers with a blindfold on. If you can't see and understand an opportunity, wait for the next one.

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Sunday, June 27th 2004

7:57 PM

Wave Theory and Basic Economics, more notes on Technical Analysis


Wave Theory and Basic Economics, more notes on Technical Analysis

Imagine personal relations in this way: Its the interchange of particles created in a space where a flow exists from one individual to the other. Goods and services likewise flow as well as money on established lines of transit and interchange.

Purchases of stock require the buyer and seller to agree to a price for the security and communicate about such a sale in some way - usually through stock exchanges. The Stock Market is thus a collection of communication channels from buyer to seller.

Examine a simple form of communication such as talking to someone. Two people must be present and agree in some slight way on part of the communication for it to truely exist. A slight attraction to the communication of some sort must exist on the person receiving it and a slight impulse towards sending such must have been created by the person doing the talking.

Breaking it down further recognition of each other had to occur prior to any talking.

A saying that has had some staying power is "If looks could kill". If someone wants to generate enough ill will and project it towards another that would cause a disruption of that communication and while it wouldn't kill it certainly would disrupt.

 

The collapse of a smooth interchange of ideas would be brought about.

The market as a whole is subject to shocks as are individual stock issues, where the turbulence connected to the idea of the stock or the market and the reality of the them has been disrupted.

Thus where you have easily defineable interchange flows from the public to each other and the company to its shareholders you get predictable and rather measureable and constant price patterns - and where they have been disrupted you should find in one form or another a "look that kills", and a collapse of the wave function of interchange.

In using technical analysis this is theory that might be speculated about as to causes and effects.

http://www.kettering.edu/~drussell/Demos/waves-intro/waves-intro.html

http://www.kettering.edu/~drussell/Demos/Dispersion/Flexural.html

 http://www.colorado.edu/physics/2000/waves_particles/

 

 

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Sunday, June 27th 2004

7:49 PM

The Vital Role Repetition plays in Understanding


The Vital role of Repetition in Understanding

In trading a number of different understandings help a trader become successful.

My experience is that most traders underestimate the practice and repetition that it takes

to fully integrate an understanding with the practice of trading. I have heard alot of stories and seen

traders go through only a couple of weeks or no practice with their tools and start trading

and empty their account.

 

 

I have also talked with a number of traders who have spent years paper trading and

developing their strategies without ever trading real time, or without finding a way to speed

up the process. If a plane was in danger of running out of jet fuel before take off, possibly the

pilot has been on too long a runway.

 

My solution to this is to drill and practice intensively, until the actions and recognition and

understanding of the trading system are fully understood so as to be automatic. What has been

in most cases overanalyzed and excused as emotional trading really usually is a failure to have

a fully understood and practiced trading plan in the first place.

 

Further I would suggest that it is really not possible to fully understand a plan without practicing its

execution in strenuous conditions, and repeatedly - until that execution is flawless. Most traders I

have been associated with seem to think it could be a good idea to practice, then either practice on

runway of simulated live trading, waiting endless hours for something to happen, and never really fully

doing all the simulations possible, or they do a few orientation type exercises such as pushing buy and sell

buttons, and leave it to that.

A professional does everything that is necessary to bring up his understanding and skill.

 

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Sunday, June 27th 2004

7:28 PM

Learning concepts


Learning concepts

Learning concepts

Getting it to stick.



Sometimes a full understanding of words is enhanced markedly by pictures illustrating and expanding on a point being made.

"In one ear and out the other" is a common problem.

Not only do sometimes people study from a viewpoint of being a spectator - not really learning something for application,

but almost anyone suffers from a lack of being able to picture or experience an abstract topic or lesson and make it real enough to use.

Besides the addition of pictures to get a better understanding of some subject you can always use the object

being discussed where it is an object. One way of teaching risk management is to have a trader do various things

with real money representing his entire account.



You could take out 1 dollar bills and have each represent 100 or 1000 or a practical representation and add or

subtract them from your total as you trade. If your maximum loss for the day is $500 you would move the bills

if you had losses and quit if that 500 is off your table. A number a variations on this same theme could be used,

but the overall goal of any would be to make learning more real to the new or even experienced trader.

 

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Sunday, June 27th 2004

7:21 PM

Risky business

  • Mood:
Chasing Runaways
RISK Management Strategy: Chasing runaways

Chasing the wrong animal could result in an unpleasant experience.


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Sunday, June 27th 2004

5:22 PM

  • Mood:

"Style"

 

Different people have different styles. Comfort can be a personal preference. Risks are seen differently from different points of view.

 

In Trading one main difference in style is how often a trader trades. Some traders trade 100 times a day and are quite comfortable with their style of trading. Others trade twice a day and this suits them. Then there are swing traders who may open and close a position over a period of days or weeks. And of course investors.

 

Here is a chart showing intraday price swings:

View Picture

A different style of trading might see only 2 trades or even 1 trade worthwhile for that style. A purely scalping mode of trading might involve even more round trips in a day.

Looking at how much gain is available on this chart, compared with what an investor who was long may have made gives a trader an idea of how much his risk/reward may have been changed ... if he can take advantage of the style of intraday trading.

 

I have seen "traders" who intended to trade according to market turns, but who then changed their style mid trade when it was moving against them. This actually leaves them without a style, they are trading on hope or gambling.

 

Discipline involves trading with a consistent style. You don't have to get married to a trade, but you should be consistent with your style that you have developed.

 

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Sunday, June 27th 2004

1:39 PM

Steps


Steps
A Step by Step approach to Learning to Trade
As with any complex or technical subject a step by step approach towards learning to
successfully invest in or trade stocks is necessary. For instance before someone new to
the subject can successfully understand complex option trading strategies, he must first
become familiar with basic terminology and actions he would take to buy or sell stocks.

In other words a new trader needs to crawl before he walks.


Thus education in stock trading must start with the most basic concepts and actions
involved in trading and ensure they are fully understood and practice the actions
connected to these basics before trying to master further more complex approaches.

The steps to master are:


Understanding all the basic words and actions necessary to set up an account and to purchase a security.
Understanding Money management.
Formulating a strategy for buying and selling.
Understanding how news events affect stocks and markets.
Understanding and Use of Technical indicators.
Understanding and Use of Fundamentals and their relationship to stock price movements.
Setting up information, charting and other needed services as to be able to quickly obtain Technical and
Fundamental Information.
Determining the needed technical requirements of any on line computer including Internet service provider,
bandwidth, Memory needed and computer speed needed and taking the actions to set these up and maintain
them in good order.
Finding a suitable broker and establishing an account.
Becoming fully familiar with and proficient in operating that brokers trading platform.
Fully testing any trading strategy formulated in real time.
Ensuring that the Trading area is free from distractions so that a trader can concentrate on his actions.
Handling any major distractions in the traders’ life so that he can concentrate on trading while he is doing it.
Buying and selling on line in accordance to the tested trading strategies.
A full review of results and correction of any flawed strategy.
Study of other strategies that can then be implemented into the trading plan.
Understanding basic option terms and strategies and Execution of these.
A review of and handling any tendency to lack discipline in trading and trade outside of tested strategies
or the traders’ plan.
A correction of any tendency to accept and use misinformation for trading purposes, being able to evaluate
what is important in their trading success.
Understanding how markets such as Stocks, Stock Options, Financial futures, Bonds and Commodities affect each other and how these affect
the traders’ strategy and plan.
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