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The beliefs that make a successful trader

Posted February 16, 2012 at 1:59 am

by Janice Dorn

“One bright day in the middle of night two dead boys rose to fight. Back to back they faced each other, drew their swords and shot one another. A deaf policeman heard the noise, and saved the lives of the two dead boys. If you don’t believe this lie is true, ask the blind man, he saw it too…” -Unknown

We are hard-wired to believe and hold to these beliefs, often in the face of contradictory evidence. In life outside the markets, this may achieve many purposes and actually be a source of strength. This does not, however, serve a trader well.

One of the most important questions for the trader to ask every day is “What do I believe that is not true?” And how do we know the truth? The markets tell us. It really is that simple, and yet so difficult for most to accept and practice on a daily basis.

It is important for a trader to assess beliefs regularly, because at any given market moment, the trader is [continue]…

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How To Make Money In the Market Consistently and Not Lose Your Ass & Your Soul

Posted April 28, 2011 at 3:17 am

by Upside Trader

The title of this post is pathetic I know. I have never done a “how to” post in my life. People that do write how to stuff, usually know nothing about anything, they rehash buzzwords and buzz phrases ad nauseum. They probably did poorly in school or didn’t go at all ( which in the new era ain’t a bad idea anyway).

Wharton students are bankrupt before they say “I do” to an employer who isn’t hiring anyway. But Wharton dads have money, so probably not an issue.

But how do you really make money consistently in the market without massive frustration or quitting the game entirely? People do it, I do it. Not many do it, about eighty to ninety percent of traders lose money.

If I have bummed you out, or you have read this type of piece before ( most likely penned by a complete schmuck who never traded) then leave now.

Every “win” I have had is cloaked in a loss. I love winners, but obsess over the losers, I tend to learn from the mistakes. I fool around on Stocktwits all the time, my tweets need subtitles unless you know my humor.

But when it comes to making money in the market I will tear your esophagus out before I let you get in front of me on a trade. I am confident to the point that I feel like the all powerful OZ when I start my day trading.

Am I cocky? Fuck yes and Fuck no.

I’ve lost millions. Made millions too.

I ran money for people from Tangiers to Berlin to Saudi Arabia and all points in between when I ran my hedge fund. I started the fund with fifty cents and grew it to five hundred million bucks. My performance was off the hook. I know stocks. My investors got statements every month, they never busted my balls. When a punk from Wharton at a “fund of funds” (slowly going out of business) who wanted to give me money, who had a daddy that knew somebody started condescending, I politely asked him to leave.

I didn’t need or want his money. I didn’t need him to “suggest” changes to my style. Correction..I wanted the money just not his attitude. Bad business I guess, but I detest condescension from a silver spoon.  I had just had my office explode on the 78th floor of the World trade Center a month before and I felt  happy and safe in my Jersey City headquarters, so he could go play lacrosse.

They were fails and they are the the guys on twitter who’s bio says: “I’m an entrepreneur looking to change the world”.  Ummm….sure you are.

So what do you do?

Find out here…

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How To Lose $250K

Posted May 22, 2010 at 12:00 am

I recently had the pleasure of having dinner with an OEX trader, Floyd, from OEXOPTIONS. com, whose on-line advisory service has been rated in the top five by Stocks and Commodities Magazine for two years running. Floyd flew in from Florida to have dinner with my friend Johnny and his wife.

A trading friend and I were happy to tag along.

During our conversation Floyd mentioned to me that his most popular article is about his losing $250,000 in the stock market over a 6 month period.  He certainly got my attention.

I suggest you read the article in its entirety for it may just offer some important clues about how to make $250,000 in the stock market.

What follows is an amended version.

Full article…

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Top-Traders Trades for 2010

Posted March 3, 2010 at 12:03 am

from The Pragmatic Capitalist:

This week’s Guru Outlook brings you Paolo Pellegrini.  Although he is not the most well known of investment gurus Pellegrini has built quite a name for himself in recent years.  Before founding his own hedge fund PSQR (a play on PP Squared) Pellegrini was John Paulson’s right hand man at Paulson and Co.

Of course, Paulson and Co. made waves during the sub-prime crisis when they made billions shorting the market during the crisis.  Pellegrini was instrumental in devising the strategy.  Like Paulson, however, Pellegrini wasn’t a one trick, short the market, pony.

In 2009 he crushed the market with a 61.6% return in his fund after he made big bets on a rising oil market and a tanking treasury market.

So where does Pellegrini see the market going now?  In a recent letter to shareholders he said:

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Greatness, Creativity, and Trading Success

Posted February 24, 2010 at 12:55 pm

by Brett Steenbarger:

Perhaps my greatest interest in psychology is understanding what differentiates highly productive, successful, and creative individuals from their more ordinary peers. Trading happens to be a worthwhile area to assess factors that lead to success, because success is so quantifiable.

In the next series of posts, I will be exploring factors associated with greatness: superlative achievement across various disciplines. An excellent overview of this area is Dean Keith Simonton’s book Greatness: Who Makes History and Why. Summarizing Simonton’s research, Dutton outlines several characteristics of creative geniuses:

* They have an unusually broad range of interests;

* They are open to novel and complex ways of viewing things;

* They are capable of defocused attention: thinking about one thing while focusing on others;

* They display flexibility in their work habits;

* They tend to be introverted and prosper during periods of relative isolation;

* They generally are independent and unconventional.

In combination, these qualities enable creative geniuses to draw upon a broad range of experience to understand things in new, enlightening ways.

Continue Reading…

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The 9 Characteristics of Great Traders

Posted February 3, 2010 at 7:14 pm

by Aamar Shehzad:
Via TradingMarkets.com

What separates the 10% that make money from the 90% that don’t?

1. 10,000 hours

In his recent book Outliers: The Story of Success, Malcolm Gladwell describes the 10,000-Hour Rule, claiming that the key to success in any cognitively complex field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours. 10,000 hours equates to around 4hrs a day for 10 years.

For some reason most people that ‘try their hand’ at trading view it as a get rich quick scheme. That in a very short space of time, they will be able to turn $500 into $1 million! It is precisely this mindset that has resulted in the current economic mess, a bunch of 20-somethings being handed the red phone for financial weapons of mass destruction.

The greatest traders understand that trading much like being a doctor, engineer or any other focused and technical endeavor requires time to develop and hone the skill set. Now you wouldn’t see a doctor performing open heart surgery after 3 months on a surgery simulator. Why would trading as a technical undertaking require less time?

Trading success, comes from screen time and experience, you have to put the hours in!

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How a Professional “Bear Trader” Trades

Posted January 22, 2010 at 6:03 pm

Here’s some on-the-fly thoughts, from Tim Knight – an active trader who has keen awareness on just how dangerous it can be to be hoplessly long at the moment.

The market is extremely over-bought at the moment as the U.S. recovery is nothing more than a manufactured illusion, fueled by hot money from the fed.

Here’s Tim’s thoughts about his trades over the week:

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The Greatest Trades Of All Time

Posted November 23, 2009 at 11:33 pm

From Clusterstock:

Compared to “investing,” pure trading doesn’t get a whole lot of respect.

The words “trader” or “speculator” are both frequently used as pejoratives, describing people who just want to make money, while being totally indifferent to the underlying asset.

But if you’re willing to…

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