mental-trading

"successful traders possess rich mental maps

- all successful trading boils down to

pattern recognition

and the development of mental maps

that help us translate our perceptions of patterns

into concrete trading behaviors.

without such mental maps,

traders become lost in complexity."


Brett N Steenbarger, Ph.D.

japanese candlestick charting techniques (ebook)

http://www.4shared.com/get/yOLV1cNR/Japanese_Candlestick_Charting_.html

how mindset effects understanding and action

http://media.wiley.com/product_data/excerpt/33/15766037/1576603733-97.pdf

cheetahs and sparrows

(excerpts from interview with mark weinstein)

"........i have a real fear of the markets.

i have found that the greatest traders are the ones

who are most afraid of the markets.

my fear of the markets has forced me

to hone my timing with great precision.

when I am trading properly,

it is like a pool player running racks.

if my gut feel of market conditions is not right,

i don't trade.

my timing is a combination of experience

and my nervous system.

if my nervous system tells me to get out of the position,

it is because the market action triggers something in my knowledge

and experience that I have seen before.

i also don't lose much on my trades,

because I wait for the exact right moment.

most people will not wait for an environment to tip itself off.

they will walk into the forest when it is still dark,

while I wait until it gets light.

although the cheetah is the fastest animal in the world

and can catch any animal on the plains,

it will wait until it is absolutely sure it can catch its prey.

it may hide in the bush for a week,

waiting for just the right moment.

it will wait for a baby antelope,

and not just any baby antelope,

preferably one that is sick or lame.

only then, when there is no chance it can lose it's prey,

does it attack.

that, to me, is the epitome of professional trading.

when I trade at home, I often watch the sparrows in my garden.
when feed them bread, they take just a little piece at a time

and fly away.

they keep on flying back and forth, taking small bits of bread.

they may have to make a hunderd stabs at a piece of bread to get what a
pigeon gets at one time,

but that is why a pigeon is a pigeon.

you will never be able to shoot a sparrow,

it is just too fast.

that is the way I day trade."

(the cheetah is the analogy to position trading
and the sparrow for day trading.
both animals will wait for the can't-lose circumstances.)

trading essentials - I

"being wrong is acceptable.

but staying wrong is totally unacceptable.

being wrong isn’t a choice,

but staying wrong is.

to play any game successfully,

you have to have some skill,

an edge,

but beyond that it is money management.

good traders manage the downside;

they don’t worry the upside."


- mark minervini

who bought whom?

traders lie

when they say

"i have bought so and so shares"

or

"i have shorted so and so stock"

in reality

the trader has not bought the shares

the shares have bought the trader.


the trader has not shorted the stock

the stock has shorted the trader.



this is the only explanation that can be given

to justify the trader behaviour

when he keeps clinging on to

a sinking stock

unless ofcourse,

like the captain of a sinking ship

he is the promoter of the company.

(even promotors these days

are found to have "pledged out"

their stake!)

psychology of tippers - II

(reminiscences of stock operator)



"tips! how people want tips!

they crave not only to get them

but to give them.

there is greed involved, and vanity.

it is very amusing, at times, to watch really intelligent people

fish for them.

and the tip-giver need not hesitate about the quality,

for the tip-seeker is not really after good tips,

but after any tip.

if it makes good, fine!

if it doesn't, better luck with the next.

..........tip-seekers and tip-takers are invariably tip-passers,

tip-broadcasting becomes a sort of endless chain advertising."