Quote for the day

"We don’t have to be smarter than the rest. We have to be more disciplined that the rest." - Warren Buffett

Quote for the day

"You are responsible for your life. You can't keep blaming somebody else for your dysfunction. Life is really about moving on." - Oprah Winfrey

Quote for the day

"Your present circumstances don't determine where you can go; they merely determine where you start." - Nido R Qubein

Quote for the day

"Perpetual optimism is a force multiplier." - Colin Powell

The Eight Characteristics of Successful Investors

Is there a reason why so many people make a failure in investing?

Just what IS success and how can it be obtained?

The techniques and the characteristics of the most successful investors are diverse, and there's not a guaranteed formula of success.

Nonetheless, by looking at the mindsets of certain successful investors, we can learn by following 8 of their key traits:

1. Reason:
Arguably the most important characteristic. You need to justify why you hold each company in your portfolio. You must seek out high-quality stocks that are undervalued by the market, and therefore cheap.

2. Commitment:
To exploit your strategy you have to do the research - and keep doing it - including surveying all financial data, online investment resources and company reports. Don't forget that "numbers have no prejudices."

3. Discipline:
The research process doesn't finish once you've bought a stock.You have to obsessively follow your purchases, to make sure they were sensible.

You'll need discipline, because successful investing is about running your profits and cutting your losses. The stockmarket is a rollercoaster, so you have to ride out the peaks and bottoms.

4. Flexibility:
If you're going to have rules you need to be able to break them!" The same stocks won't perform well in all markets.

5. Guts:
The best time to buy stocks is the time of "maximum pessimism" - when everyone is selling and fleeing the markets. To do this takes bravery.

6. Open Mind:
Seeking out opportunities ignored by other investors prevents prejudices coming between you and an opportunity.

7. Patience:
"Unfashionable stocks" are unlikely to turn around overnight, so you need to know when to hold on.

8. Know Your Limits:
This means accepting you won't be the next Warren Buffett. Professional investors spend their whole day researching companies, have analysts to help them, and can visit companies.

That doesn't mean you can't stock-pick successfully as an amateur ...

The best trick is to keep it simple and ...

Stick with what you know!

http://www.greekshares.com

Quote for the day

"When performance exceeds ambition, the overlap is called success." - Cullen Hightower

The Seven Key Emotions of the Winning Trader

One thing that trips up new traders is that they are surprised at the emotions that flood into them when they begin the process of trading with real money. Their ego engages and they do not want to be wrong and they sure don’t want to lose money. The negative downward emotional spiral takes down more traders than the math, risk management, or markets ever will. Once the negativity begins it is hard to stop, so travel down the right emotional road if you truly want to be a winning trader, here is what that looks like:

Choose the emotions that you participate in carefully.

1. Contentment: The trader must be satisfied that they are trading the right system for their risk tolerance and beliefs about the market.

2. Hopefulness: A trader must have the belief that he will win in the long term and it is worth the effort to capture the future profits.

3. Optimism: Winning traders believe that they are always getting closer to that next big winner.

4. Positive Expectations: To be successful the trader must expect that in the long run his robust system will produce profits and not lose faith during drawdowns.

5. Enthusiasm: The winning trader enjoys the trading process and loves playing the game that is the markets.

6. Passion: The traders that end up as the big winners are the ones that have the drive to keep learning, keep growing, and put in the work needed because of the energy that comes from their passion.

7. Empowerment: The best traders in the market can not even imagine doing anything else but trading. They truly get joy from the freedom of being a trader and love what they do.

Source:http://newtraderu.com

Quote for the day

"Failure is only postponed success as long as courage 'coaches' ambition. The habit of persistence is the habit of victory." - Herbert Kaufman

Quote for the day

"The greatest achievement is to outperform yourself." - Denis Waitley

Quote for the day

"Order marches with weighty and measured strides. Disorder is always in a hurry." - Napoleon Bonaparte

Quote for the day

"Excellence is doing ordinary things extraordinarily well." - John W. Gardner

Quote for the day

"Genius... is the capacity to see ten things where the ordinary man sees one." - Ezra Pound

Quote for the day

"A man of knowledge lives by acting, not by thinking about acting." - Carlos Castaneda

Quote for the day

"Learning is the beginning of wealth. Learning is the beginning of health. Learning is the beginning of spirituality. Searching and learning is where the miracle process all begins." - Jim Rohn

The Four Horsemen of the Failed Trader

The Four Horseman of the Failed Trader are Ego, Battling Price Action, Inadequate Homework, and Ruin.

Most traders that fail and leave the markets never learn the lessons that the market was trying to teach them. In all likelihood there were four horsemen that rode through that traders account leaving lost battles, pestilence, famine, and destruction in their wake. What brings this doom upon a traders account? It is the absence of risk management and a trading plan but an abundance of predictions and ego. Most of the time traders learn these lessons the hard way but it is possible to trade from the start with risk management, a trading plan, and trading the price action while staying humble.

Here is how to keep the four horsemen from riding all over you:

RUIN - Never ignore risk:
Some of the best traders in the world only have 50% win rates over the long term and have ten losses in a row regularly. If you want to make it the key is to position size and set stop losses in such a way that you don’t lose more than 1% of your total trading capital in any one trade. If you risk large percentages of your trading capital per trade then it is only a matter of time before your capital is destroyed by a string of losses. One big risky trade can take back the profits from many previous winners at one time.

INADEQUATE HOMEWORK
Successful traders are students of markets, students of successful traders and students of historical price action and trends. From their homework they create systems and choose methodologies that give them an edge over those that have not done the work. Their homework and experience enables them to create a workable trading plan. Without a trading plan you are not a trader you are a gambler, with a trading plan you can become the casino, you can have an edge over the gamblers that trade off fear and greed. Trading plans have an edge over other traders emotions. You can not graduate to profits until you pay the tuition to the markets in time and learning from losing. That is true of any professional field.

BATTLING PRICE ACTION - Stop trying to predict price action and instead follow the action that is actually happening: 

Unless you are a true psychic and can predict the future then you will have to stop trying to predict what will happen and trade with what is actually happening on the chart. Trends, support, resistance, moving averages, chart patterns, and price are facts, give up your opinions for reality. Once the disease of prediction infects your trading your account it will become sick as it coughs up profits and you learn that you can't beat a chart and what is actually happening even if you disagree with it.

EGO
Do not let your ego trade: Your ego just wants to be right, it wants to brag, it wants to look good to your friends and fellow traders. It wants to state opinions as facts. The ego is a terrible trader along with your emotions. Egomaniac trading leads to you letting losses get way out of hand because you believe that you know better than the market does, so your ego wants to avoid admitting you are wrong, your ego demands that you just wait for the trade to turn around so you can eventually be right even as the loss gets out of hand and you lose the war while fighting one battle.
Source: http://newtraderu.com/

Quote for the day

"Growth begins when we start to accept our own weakness" - Jean Vanier

Quote for the day

"No matter what the situation, remind yourself "I have a choice."" - Deepak Chopra

Quote for the day

"Crying with the wise is better than laughing with the fool." - Gautama Buddha

Quote for the day

"The man who asks a question is a fool for a minute, the man who does not ask is a fool for life." - Confucius

Quote for the day

"Develop success from failures, Discouragement and failure are two of the surest stepping stones to success." - Dale Carnegie

Quote for the day

"Life is a series of experiences, each one of which makes us bigger, even though sometimes it is hard to realize this. For the world was built to develop character, and we must learn that the setbacks and grieves which we endure help us in our marching onward." - Henry Ford

Hard Work Beats Talent

“Hard work beats talent when talent doesn’t work hard.” - Tim Notke

There are plenty of people with talent. There are people born with some innate talents naturally over others. As someone enters higher levels of competition whether in sports, business, academics, or investing, talent is not enough. All your competition has some level of skills and abilities. In the long term though in the race to success it’s the work that wins out.

You may not be smarter, faster, better looking, or more talented than others but you can certainly outwork them. It is hard to beat someone with the passion to get up every morning and work for hours on their goals every day. No matter how they feel, they do the work, it doesn’t matter what the weather is outside, they work. They don’t let failure slow them down, it inspires them to work harder. People’s doubts and negativity doesn’t make them quit it lights a fire in them to prove the naysayers wrong. They don’t quit when they’re tired they never stop.

When you invest in doing the work day after day that moves you toward your goals and you will start to benefit from the compounding of efforts. If you get 1% better every day or week that compounds into exponential growth over time. Momentum starts to move you toward your goals faster and faster as you create a positive feedback loop. Winning and improving can give you the motivation to want more of it.

The ultimate winners in any field not only work hard but they put their effort into doing the right things that lead them to their goals. They learn from other’s successes and failures on what to do and what not to do. Work hard at not only doing both the right things and also at not doing the wrong things. Self control and self discipline also take work and are the primary skills in a winners tool box that keep them on their path. Seeing their ultimate goal is what lights their path and the reward that gives them energy to do the work.

1. Your biggest edge over your competition is the amount of work you do.
2. Many times it is the person that wants it the most that wins.
3. The ability to manage mental and physical pain and keep going is a skill.
4. You have to invest the right amount of time if you hope to achieve your goal.
5. Talent just means you are in the race, you have to work hard if you want to win it.
6. At the highest levels of competition it is the amount of work that decides the winner.
7. Understand the amount of work that will be required before you start a journey.
8. Talent may give you a headstart but it is your work that develops your skills and abilities.
9. For maximum results work smart and hard.
10. You have to believe you are likely to succeed before you will be able to commit to the work involved.

The first step to accomplishing anything is to understand the cost of accomplishing your goal and then be willing to pay the price in effort, research, time, and work.

“Here’s how I’m going to beat you. I’m going to outwork you. That’s it. That’s all there is to it.” – Pat Summitt

Source: www.newtraderu.com

Quote for the day

"Temporary success can be achieved in spite of lack of other fundamental qualities, but no advancements can be maintained without hard work." - William Feather

Richard Donchian’s 20 Trading Guides

Donchian's 20 Trading Guides (First publication: 1934)

General Guides:

01. Beware of acting immediately on a widespread public opinion. Even if correct, it will usually delay the move.

02. From a period of dullness and inactivity, watch for and prepare to follow a move in the direction in which volume increases.

03. Limit losses and ride profits, irrespective of all other rules.

04. Light commitments are advisable when market position is not certain. Clearly defined moves are signaled frequently enough to make life interesting and concentration on these moves will prevent unprofitable whip-sawing.

05. Seldom take a position in the direction of an immediately preceding three-day move. Wait for a one-day reversal.

06. Judicious use of stop orders is a valuable aid to profitable trading. Stops may be used to protect profits, to limit losses, and from certain formations such as triangular foci to take positions. Stop orders are apt to be more valuable and less treacherous if used in proper relation the the chart formation.

07. In a market in which upswings are likely to equal or exceed downswings, heavier position should be taken for the upswings for percentage reasons - a decline from 50 to 25 will net only 50% profit, whereas an advance from 25 to 50 will net 100%

08. In taking a position, price orders are allowable. In closing a position, use market orders."

09. Buy strong-acting, strong-background commodities and sell weak ones, subject to all other rules.

10. Moves in which rails lead or participate strongly are usually more worth following than moves in which rails lag.

11. A study of the capitalization of a company, the degree of activity of an issue, and whether an issue is a lethargic truck horse or a spirited race horse is fully as important as a study of statistical reports.

Technical Guides:

01. A move followed by a sideways range often precedes another move of almost equal extent in the same direction as the original move. Generally, when the second move from the sideways range has run its course, a counter move approaching the sideways range may be expected.

02. Reversal or resistance to a move is likely to be encountered
(i) On reaching levels at which in the past, the commodity has fluctuated for a considerable length of time within a narrow range
(ii) On approaching highs or lows

03. Watch for good buying or selling opportunities when trend lines are approached, especially on medium or dull volume. Be sure such a line has not been hugged or hit too frequently.

04. Watch for "crawling along" or repeated bumping of minor or major trend lines and prepare to see such trend lines broken.

05. Breaking of minor trend lines counter to the major trend gives most other important position taking signals. Positions can be taken or reversed on stop at such places.

06. Triangles of ether slope may mean either accumulation or distribution depending on other considerations although triangles are usually broken on the flat side.

07. Watch for volume climax, especially after a long move.

08. Don't count on gaps being closed unless you can distinguish between breakaway gaps, normal gaps and exhaustion gaps.

09. During a move, take or increase positions in the direction of the move at the market the morning following any one-day reversal, however slight the reversal may be, especially if volume declines on the reversal.

Richard Donchian
Richard Donchian graduates from Yale with a BA in economics and begins his Wall Street career in 1930. From 1933-1935 he writes a technical market letter for Hemphill, Noyes & Co. For several years thereafter, he publishes a stock market service, "Security Pilot," and sells it to brokerage houses. During WW II he serves as an Air Force statistical control officer with a group they call the "Whiz Kids." For two years after the war, he acts as economic trend analyst and market letter writer for Shearson Hamill & Co. Quotes from his "Market Outlook" letters appear in the Wall Street Journal and other financial publications. He joins Hayden, Stone in 1960 and becomes VP and Director of Commodity Research. He writes numerous articles including "Trend Following Methods in Commodity Price Analysis." He publishes a weekly "Commodity Trend Timing" letter, based on his 5-20 moving average method and achieves a circulation of over 10.000.

Source: http://www.seykota.com/tribe/resources/donchian/index.htm

Quote for the day

"Leaders think and talk about the solutions. Followers think and talk about the problems." - Brian Tracy

Quote for the day

"Procrastination is the grave in which opportunity is buried." - Alyce Cornyn-Selby

Quote for the day

"Procrastination is opportunity's assassin." - Victor Kiam

Quote for the day

"It doesn't matter where you came from, it doesn't matter how poor you are, it doesn't matter where your family was. It all doesn't matter. You can achieve anything if you have really clear goals and if you work really hard to learn what you need to learn." - Brian Tracy

Quote for the day

"Problems can become opportunities when the right people come together." - Robert Redford

Quote for the day

"The future belongs to the risk-takers, not the comfort-seekers ." - Brian Tracy

6 Steps To Becoming A Master Investor

Here's the formula for success.

1. A growth mindset
Is intelligence fixed from birth? Some would say yes, but psychology professor Carol Dweck argues that intelligence can be developed if we have a growth mindset about it. 

Dweck ran an experiment on elementary students whom school personnel had identified as helpless. Through a series of exercises, the experimenters trained half the students to see insufficient effort as the cause of their struggles and encouraged them to keep going. Those children learned to persist in the face of failure and to succeed, while the control group showed no improvement at all. If we want to improve, we have to believe that we can improve. 


2. Effortful study
Doing things you're comfortable with and already good at allows your abilities to reach a plateau. Effortful study, in contrast, includes taking on challenges just beyond your competence. 

In my case in ADP, this means studying the master investors and reverse-engineering their successes and failures. In addition, master investor Charlie Munger has said that learning the key points in all the major academic disciplines is of great benefit to investors. We need to partake in effortful study on a regular basis, and I try to devote at least two hours per day to my studies.


3. Deliberate practice
It's not enough to sit back and read the Financial Times or watch CNBC and think you're improving as an investor. You actually have to study and value businesses. 

You also have to talk about your ideas and receive feedback so you can adjust and improve your process. This approach is a key part of ADP, and we regularly pitch stocks to other advisors. But remember, study your successes and your failures so you learn not to repeat your mistakes.


4. Self-awareness
To become a master, you must be honest and humble enough to identify your own weaknesses, strengths, and natural tendencies. Improve on your weaknesses so they don't destroy you, and then focus on developing your strengths. After all, your strengths are your competitive advantage -- they're what give you your edge. It's vital to identify them early on and spend as much time as possible strengthening them. 


5. Motivation
Without motivation, everything I've just talked about is worthless. Even the most talented people will fail if they don't have the motivation, desire, and work ethic required to succeed. I've seen amazingly talented No. 1 overall draft picks fail miserably in the National Football League while undrafted and less physically gifted players have earned their way into the Hall of Fame.


6. Time
You don't become an expert overnight. Research has shown that it takes 10 years or 10,000 hours of disciplined practice to become a master -- and performance is often proportional to time spent practicing.
In a study of 20-year-old violinists by psychology professor K. Anders Ericsson, the best group (as judged by conservatory teachers) averaged 10,000 hours of practice over their lives; the next-best averaged 7,500 hours; and the next after that, 5,000. We value experience when evaluating a company's management team.

My challenge to you
Where would you like to be in 10 years? If you're willing to do all of the things I've written about here, I believe you'll be successful as you work toward mastery. So why not start today? A decade-long effort may seem daunting, but remember, the journey of a thousand miles begins with a single step.
Extract from www.fool.co.uk

Quote for the day

"Most of the problems in life are because of two reasons, we act without thinking or we keep thinking without acting." - Zig Ziglar

3 Rules for Safe Trading Strategies

Rule 1 - Never trade with borrowed money.

It's called "leverage" or "margin." Your trading strategies use money you borrow from your broker. Some people even max out their credit cards, or take out home loans. Don't do it!

It sounds so tempting -

*Put up only a little money. Your broker puts up the rest. * You make bigger profits. Get returns on the borrowed money as well as your own.

Until the roof falls in -

* Losses are multiplied as much as profits. If you lose, your loss is much bigger.
* If prices go down, the stock you bought with borrowed money is no longer worth enough to be collateral for the loan.
* Your broker can demand more money as collateral. That's a "margin call."
* If you don't have it, he can sell your stock.
* You lose almost everything.
* "Margin calls" can wipe you out.
* Meanwhile, you have to pay interest on the loan.

Buy shares with your own money, and you can ride out a price dip. Buy shares with borrowed money, and a price dip gets you a margin call. The added profit potential is more than canceled by the added risk.

Smart trading strategies are safe trading strategies. Don't use "leverage."

Rule 2 - Always take part of your winnings off the table.

At a Las Vegas casino, if someone wins at craps, they might "let it all ride." They keep betting everything they have - what they came with and what they've won. You know the end of the story. They win big - until they lose it all.

Using trading strategies like a Las Vegas gambler is a recipe for disaster.

People think "big trades make big money." They want to do the biggest trades they can. So they pile all their winnings into their next trade.

* That works until they lose. Then they lose big because they "let it all ride."
* An investor's job is to lower his risk. The lower his risk, the closer he gets to safe money.

The best trading strategies grow your portfolio slowly.

* Re-invest part of your share trading profits. 50% is a good amount.
* Set aside the rest. It will keep you safe in hard times.
* Take 50% of your profits even if you don't want to close a trade.
* With a $10,000 profit, take $5,000 immediately, and leave the rest invested.
* The $5,000 you saved cushions you against a later fall in the stock.

Rule 3 - Don't buy more when the price is falling.

What are your trading strategies when the price falls?
* Panic and sell at once - always bad.
* Hold on and hope - always bad.
* Stick with the Exit Strategy you decided in advance, and sell if and when the price falls enough - smart.
* Buy more - often bad.

Buying more when the price is falling feels smart -
* Lower your average cost.
* Get more of a good stock.

But remember that smart trading strategies are safe share trading strategies. Buy when the price is falling and you raise your risk.
* Increasing the size of your position raises your risk - automatically.
* The falling price gives you negative feedback about the stock even as you raise your risk.
* "Markets can stay irrational longer than you can remain solvent." ~ John Maynard Keynes.
* You assume the stock will bounce back soon. It may not.

Most people buy more of a falling stock because they don't want to be wrong. Don't let ego ruin your trading strategies.
By Robert Rubin
http://ezinearticles.com

Quote for the day

"When you focus on problems, you get more problems. When you focus on possibilities, you have more opportunities." - Zig Ziglar

Quote for the day

"Sometimes adversity is what you need to face in order to become successful." - Zig Ziglar

Quote for the day

"Having more success allows you more freedom to take more risks and do things." - Mark Wahlberg

Quote for the day

"Our lives improve only when we take chances." - Walter Inglis Anderson