Tuesday, 22 September 2015

Samurai Summary: Top Tweets 22/09/2015

I thought I'd shake things up today and instead of focusing on news I'd like to put out some pearls of wisdom I found in the Twittersphere relating to trading and ways in which we all can improve ourselves especially in times we are seeing at the moment where trades are hard to come by and turning a buck over takes a little more than just effort, it requires you stretch your trading ability to the maximum.

The market can be a vicious creature exhibiting conditions of absolute calmness to maddening maniac. However it doesn't know who you are, your personality type, your style of trading or even the amount of risk you should be taking. It is merely a platform to contain the chaos it creates from which you and I profit from.

So if you feeling like it's giving you a hard time, it's not. Any given market condition can be changed at a whisper and if you're not prepared you'll get caught up. The market rewards discipline and punishes the unplanned.  The market isn't out to get you, it's there to test your ability.

This is something I'm finding as a common theme amongst traders during these tough times, overtrading. The problem comes in where the market volatility picks up significantly and begins to generate signals for a variety of different systems however because the volatility is severe you get stopped out quite often only for another signal to generate a few periods later. A real frustration that every trader will experience however this is where your trading intuition kicks in.

If you feel that the market isn't producing the quality you'd like to match with your system, there's no crime in sitting out until things settle down again. You sit in the driving seat and dictate what you want to do.

Our attitude to losing makes all the difference when it comes to profiting over the long term in trading. Managing your risk so things don't get out of hand is probably the most understated yet important parts of the trading process.

In different times when everything is turning up nicely with no worries bothering the balance of things, the market leads you into complacency in believing that there is no concerns over your positions not working out because there is nothing to fear. Going back to what Douglas Kass said about the market having no memory, it's exactly this conviction that falls trap to many traders who only realise the error of their mistakes when fear is driven back into the market and they sit with huge losses.

Bravery is not a tool for outsmarting the market, you need humility for that.
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