Why Arrogance is Expensive in the Markets

By: Steve Burns

There are two kinds of traders:

1. Those who are humble.

2. Those who are going to be humbled.

In the markets competence must come before confidence or the market will give you an expensive education. No one can predict the future prices of markets the stronger the belief that you can then the harder it is to exit a position when you are wrong. The future can not be predicted because it does not exist yet and there are endless variables that will play into how prices play out due to news, buyers and sellers motives, along with mass fear and greed. The height of arrogance is in making big risky bets believing you can predict the future when most know variables are already public. The bigger the position size of a trade the more arrogant or ignorant the trader usually is. The bigger the trade the bigger potential loss, the longer you wait to take a stop loss the bigger a loss will grow. The market will charge you a high price to teach you to exit your losing trade for a small loss.

What can a humble trader do in the place of opinions, predictions, and arrogance? Trade a system that reacts to what the market is doing not what you think it will do. Up trends, downtrends, and ranges give you clues as to the nature of a markets price action.

A humble trader looks at the past history of price action to give them a better chance of trading future price action profitably. Backtesting a trading system does not guarantee it will continue to work but it greatly increases the odds. The patterns and trends of the markets do not repeat exactly but they are similar enough to trade with good risk/reward ratios.

Have confidence in your trading system and your discipline to execute your trading plan with discipline. But also be humble and take your planned stop loss when the market shows you that your trade entry is likely not going to work out as a profit.

“There are old traders and there are bold traders, but there are very few old, bold traders.” – Ed Seykota

Source: www.newtraderu.com

Quote for the day

"The unexamined life is not worth living." - Socrates

How to Think More Like a Rich Person (and Actually Become Wealthy)

The right mindset drastically ups the odds of becoming financially set.

By Wanda Thibodeaux 

If you want to be rich, it makes sense to model what wealthy people do. But behaviors are driven by underlying beliefs and ways of thinking, meaning that getting rich often requires a mindset shift, too. To make it super clear where to focus your attention, the infographic below breaks down the key differences in the way rich and poor people tend to view money.

In essence, much of what separates rich people and poor people is a sense of being personally responsible for one's own fate and an unwillingness to accept defeat in the face of failure. Individuals who enjoy wealth also are willing to learn and take help, and they are able to look at life in the long-term rather than being swept away by the emotions of the moment. If you need to get thinking like this, reading classic books like Napoleon Hill's Think and Grow Rich is a great, simple way to start. But be brave, too. Expand your social circle and surround yourself with people who have strong financial sense. The more you're around them, the more their mindset will rub off on you.

Source: www.inc.com

Quote for the day

"Time and tide wait for no man." - Geoffrey Chaucer

Quote for the day

"It doesn't matter how many times you almost get it right. No one is going to know or care about your failures, and neither should you. All you have to do is learn from them and those around you because all that matters in business is that you get it right once. Then everyone can tell you how lucky you are." - Mark Cuban

Colombo Stock Exchange Trade Summary 12-Apr-2018

Quote for the day

"Never apologize for showing feeling. When you do so, you apologize for the truth." - Benjamin Disraeli