- Always use stops. Risk control is the true measure of a good consistent trader. If you lose all your capital on the lemons, you can’t play when the great trades set up. Consider cash as having an option value.
- Don’t over trade. This is the number one reason why individual traders and investors lose money. Look at your trades of the past year and apply the 90/10 rule. Dump the least profitable 90% and watch your performance skyrocket. Then aim for that 10%. Over trading is a great early retirement plan for your broker, not you.
- Don’t forget to sell. Date, don’t marry your positions. Remember, pigs get slaughtered. Always leave the last 10%-15% of a move for the next guy.
- Don’t chase the market. If you do, it will turn back and bite you. Wait for it to come to you. If your miss the train, there will be another one along in hours, days, weeks, or months. Patience is truly a virtue in this business.
- When I put on a position, I calculate how much I am willing to lose to keep it. I then put a stop just below there. If I get triggered, I just walk away. Only enter a trade when the risk/ reward is in your favor. You can start at 2:1. That means only risk a dollar to potentially make two.
- Always be willing to go Long (Buy) and Short (Sell). You have to be flexible and dynamic in your trading…one minute I could be long the market and the very next minute I may be short the market. You need to be able to flip flop and be quick and nimble in your trading.
- You don’t have to be a genius to play this came. If that was required, Wall Street would have run out of players a long time ago. If you employ risk control and stops, then you can be wrong 40% of the time, and still make a living. That’s little better than a coin toss. If you’re wrong only 30% of the time, you can make millions. If you’re wrong only 20% of the time, you are heading a trading desk at Goldman Sachs. If you’re wrong a mere 10% of the time, you’re running a $20 billion hedge fund that the public only hears about when you pay/invest $100 million. And if someone tells you they’re never wrong, as is often claimed on the Internet, run a mile, because it’s simply impossible!
- Trading is hard work. Trading attracts a lot of wide eyed, naïve, but lazy people because it appears so easy from the outside. You buy a stock (futures contract, forex, option, etf, etc.), watch it go up, and make money. How hard is that? The reality is that successful trading and or investing requires twice as much work as a normal job. The more research you put into a trade, the more comfortable you will become, and the more profitable it will be.
- Don’t confuse a bull market with brilliance. When the market goes straight up (i.e. 1995 to 2000) anybody and their grandmother can make money.
- John Maynard Keynes, the great economist and early hedge fund trader of the thirties, once said: “Markets can remain illogical longer than you can remain solvent.” Hang around long enough, and you will see this proven time and time again.
- Don’t believe the media. Look for the hard data, the numbers, and you’ll see that often the talking heads, the paid industry apologists, and politicians don’t know what they’re talking about.
- Sometimes the conventional wisdom is right.
- INVEST like a fundamentalist, execute like a technical analyst. (Swing) TRADE using technical analysis…then by understanding basic fundamentals will make you even better.
- Technical analysis…knowing how to read charts like a daily newspaper is key to successful trading. That said, learn what an “outside vertical bar” is, and who the hell is Leonardo Fibonacci.
- The simpler a market approach, the better it works (the ‘KISS’ method). Everyone talks about “buy low and sell high”, but few actually do it. All black boxes eventually blow up, if they were ever there in the first place.
- Markets are made up of people. Understand and anticipate how traders think, and you will make a lot of money. The market is made up of peoples fear and greed…it’s all psychological…learn how to read people and you’ll certainly be ahead of everybody else.
- Understand what information is in the market and what isn’t and you will make more money.
- Do the hard trade, the one that everyone tells you that you are “Crazy” to do. If you add a position and then throw up or feel sick afterwards, then you know you’ve done the right thing.
- If you are trying to get out of a hole, the first thing to do is quit digging and throw away the shovel – exit your trade asap. A blank/neutral/flat position can be invigorating.
- Making money in the market is an unnatural act. We humans are predators and hunters evolved to track game on the horizon of an African savanna. Modern humans are maybe 5 million years old, but civilization has been around for only 10,000 years. Our brains have not had time to make the adjustment. In the market, this means that if a stock has gone up, you believe it will continue. This is why market tops and bottoms see volume spikes. To make money, you have to go against these innate instincts. Some people are born with this ability, while others can only learn it through decades of training.
Monday, May 21, 2012
Todd Mitchell’s 20 Rules for Trading Success
Thursday, May 17, 2012
Tuesday, May 15, 2012
Monday, May 14, 2012
Thursday, May 10, 2012
Saturday, May 05, 2012
SPY price error
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-- SPY price error? (http://www.elitetrader.com/vb/showthread.php?threadid=150322)
Posted by BullAlert on 01-10-09 08:34 PM:
SPY price error?
Why is the 1/09/09 low for SPY reported as 85.36? It clearly did not fall below 88.81 during the normal session. Any ideas?
Posted by Landis82 on 01-10-09 09:08 PM:
A bad "print".
Should be eventually corrected.
Posted by murray t turtle on 01-10-09 09:39 PM:
Re: SPY price error?
Quote from BullAlert:
Why is the 1/09/09 low for SPY reported as 85.36? It clearly did not fall below 88.81 during the normal session. Any ideas?
==================
Good question, Bull alert;
i watch this one much, noticed this happens occasionaly & with qqqq also, moreso than others.
Strange, it happens notably more with SPY,QQQ,than with other high vol stocks;
GM,GE C.....................................................................................
Interesting yahoo, prophetnet charts, daily carried the bad quote;
prophet.net charts intraday charts, bloomberg.com intraday charts carried correct data.
Actually have a few theories why SPY/QQQQ[and WHERE on charts] it happens;
but prefer not to mention it a public forum.
__________________
murray t turtle,nickname,not an alias
Posted by BullAlert on 01-11-09 12:31 AM:
Re: Re: SPY price error?
Quote from murray t turtle:
Actually have a few theories why SPY/QQQQ[and WHERE on charts] it happens;
but prefer not to mention it a public forum.
Dark pools? I'd love to hear your theory. PM me if you like.
Posted by murray t turtle on 01-11-09 01:32 AM:
Re: Re: Re: SPY price error?
Quote from BullAlert:
Dark pools? I'd love to hear your theory....
==========================
Well lets put it this way, Bull alert , some traders make money in a strict sideways trend, but this type ''error'' seldom if ever helps that. Can think of several different people/groups liking it to go up or down big, including me,LOL
Its also usually a ''thoughtful'' or planned SPY,QQQ error perhaps wih some support or resistance logic to it.
Think i 'll leave it at that, good error catch;
===============================
if this had happened in OCT, many may have missed it,if not watching. Common move then.
__________________
murray t turtle,nickname,not an alias
Posted by BullAlert on 01-11-09 02:15 AM:
Re: Re: Re: Re: SPY price error?
Quote from murray t turtle:
==========================
Well lets put it this way, Bull alert , some traders make money in a strict sideways trend, but this type ''error'' seldom if ever helps that. Can think of several different people/groups liking it to go up or down big, including me,LOL
Its also usually a ''thoughtful'' or planned SPY,QQQ error perhaps wih some support or resistance logic to it.
Think i 'll leave it at that, good error catch;
===============================
if this had happened in OCT, many may have missed it,if not watching. Common move then.
I read your post about a dozen times and am sincerely trying to read between the lines. In particular the part about the planned error. If something happens that is planned, it is not an error, right?
Perhaps market makers or dark pools executed a trade at that price to get a hugely lower print, therfore throwing off pivot points or other hi/low indicators?
Posted by karol88 on 01-11-09 08:21 PM:
Re: Re: Re: Re: SPY price error?
Quote from murray t turtle:
==========================
Its also usually a ''thoughtful'' or planned SPY,QQQ error perhaps wih some support or resistance logic to it.
I thought it could have something to do with the above...plus from time to time I found it useful to connect some of the prints with tops and bottoms to get the right trendline angle to use with the next move...(a little hard to explain)
Posted by murray t turtle on 01-12-09 02:42 PM:
Re: Re: Re: Re: Re: SPY price error?
Quote from karol88:
I thought it could have something to do with the above...plus from time to time I found it useful to connect some of the prints with tops and bottoms to get the right trendline angle to use with the next move...(a little hard to explain)
=========================
Karol88,BullAlert;
Probably, not an accident, that SPY quote.
============================
But even possibly if it is an ''accident'' ??;
my banker DAD always used to say''accidents do NOT just happen , they are are caused!!.''
And comparing this like a proverb,
SPY,QQQQ quotes;
tend to be much more fair & helpful than your average new car dealer ''quote''.LOL
__________________
murray t turtle,nickname,not an alias
Posted by BullAlert on 01-12-09 10:30 PM:
Still not corrected
I see that this price "error" still has not been corrected and it may be reasonable to assume the powers that be across the clearing firms and regulatory bodies are not overly interested in this. Hell, it is just the most utilized ETF to gauge the broad market we have.
I happen to keep some spreadsheets for various purposes that utilize intraday SPY data and will ensure that this noise is filtered out.
85.36 fits nicely in the late December support area, doesn't it?
Posted by stock777 on 01-13-09 04:36 AM:
There's no question its a secret code used by all the profitable Wall St giants to communicate quickly and cheaply.
You see the price of postage these days? This is way cheaper and faster too.
__________________
"Those that know ain't saying, and those saying don't know." - E. A. Neumann
A bear since 1958 and proud of it.
Posted by karol88 on 01-13-09 04:38 AM:
Quote from stock777:
There's no question its a secret code used by all the profitable Wall St giants to communicate quickly and cheaply.
You see the price of postage these days? This is way cheaper and faster too.
Posted by BullAlert on 01-13-09 03:46 PM:
Quote from stock777:
There's no question its a secret code used by all the profitable Wall St giants to communicate quickly and cheaply.
You see the price of postage these days? This is way cheaper and faster too.
I'll give you credit - that was funny.
But, can anyone be serious and offer a legitimate reason for this?
Posted by murray t turtle on 01-13-09 07:27 PM:
Quote from stock777:
There's no question its a secret code used by all the profitable Wall St giants to communicate quickly and cheaply.
You see the price of postage these days? This is way cheaper and faster too.
=====================
See your points,Stock777.
This maybe another innacurate/error quote;
maybe not, SPY is an important benchmark.
Speaking of cheaper & faster & giant;
if its Citigroup doing that, not many buying that Citigroup quote.
__________________
murray t turtle,nickname,not an alias
Posted by Landis82 on 01-13-09 08:45 PM:
These INTRA-DAY quotes are calculated based as if every single stock in the SPY is trading at its low, are they not?
Perhaps a bank stock or an oil stock or two that got crushed on the day in question and that is what facilitated such a deep print?
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