trading rules that i follow
If that is your case it is always good to remember the words of Peter Lynch:
“In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”
Just because a trade doesn’t go in the direction you expected doesn’t mean it won’t be profitable in the long run. You won’t get every trade “right”.
Warren Buffett, to determine whether a trade was good or bad, looks at the company, not the outcome of the trade. So, instead of looking at the outcome of the trade, look at the team you invested in.
Why? It is very unlikely if not impossible that there are 20 excellent trading opportunities in just 1 day.
If you buy what everyone else buys, it is very likely that you are buying expensive. If you sell what everyone else is selling, you are probably selling cheap.
If you want to buy cheap, your only chance is to buy from the majority that is selling. And if you want to sell high, you have to sell to the majority who are buying.
Get used to it, if you want to be a value investor, your opinion will always be the opposite of the market’s.
Buying something or selling something just because someone says so only shows you are a beginner since an experienced investor knows in detail all the reasons that made him invest.
Five Affirmations for Traders
FIVE FUNDAMENTAL TRUTHS OF PROBABILISTIC MIND-SET
Regardless of how much time, effort, or money you’ve invested in your analysis, from the market’s perspecive there are no exceptions to this truth
Trading is a probability / numbers game. You don’t know the sequence of wins and losses or how much money the market is going to make available on the winning trades
If every loss puts you that much closer to a win, you will be looking forward to the next occurence of your edge, ready and waiting to jump in without the slightest reservation or hesitation
Creating consistency requires that you completely accept that trading is not about hoping, wondering, or gathering evidence one way or the other to determine if the next trade is going to work. The only evidence you need to gather is whether your edge is present at any given moment.
There is nothing at the level of your rational experience that can tell you for sure that you “know” what will happen next. So why bother trying to “know”?
Setting up a trade
I AM A CONSISTENT WINNER BECAUSE
WORDS OF WARNING
(investment language that spell trouble)