Category Archives for "Trading Pyschology"

one of the hardest things to learn

One of the Hardest Things to Learn

Whether you are a trader or an investor, it doesn’t matter.

One of the hardest things to learn is to take a loss. Losses are part of the trading/investing business.

It’s nothing to be ashamed of.  You have to work your plan. (you do have a plan don’t you?) Sometimes it doesn’t work out. Sometimes it doesn’t work out several times in a row.

But you have to learn to take a loss and move on… or Mr. Market will rip you apart…nothing personal.

It doesn’t care about you, your family, your home, or your retirement plan.

One of the greatest books on trading is Reminiscences of a Stock Operator by Edwin Lefevre.  It was dedicated to Jesse Livermore and is supposedly a fictionalized account of his early and rising years.

Ignore the fact that the time-frame for this was at the beginning of the 20th century.  There is so much insight buried in this book that you should read it several times.  Your mind will always pick up something new.

So back to one of the hardest things to learn. Here is what Livermore says in the Reminiscences book,

“Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocketbook and to the soul.”

Today’s Free Video

In today’s video I look at the S&P 500 ETF (SPY) daily and weekly charts, Gold ETF (GLD) and the Gold Miners ETF (GDX). I also check-in on the Baltic Dry Index.  The price of iron ore has collapsed in the last several weeks and there are indications that iron ore is piling up in the ports of China. The canary in the coal mine?

hoping for a miracle

Still Hoping for a Miracle

In the stock market or futures market or any trading/investing environment, if you find yourself hoping for a miracle then you know you are in trouble. Remember,


“hope is not a strategy”


Where the Money Goes

Rule 6, from the “Tao of Poker” by Larry W. Phillips, It’s important that a player starts seeing “staying too long on marginal hands” as where the money goes. Continue reading

If You think you're beat...get out

If You Think You’re Beat…Get Out

Poker or gambling in general has very interesting correlations to trading. In both you are dealing with uncertainty, the ability to handle your emotions and how well you manage your money.  

And doing all of those things gets back to discipline and your ego. Let’s start off with knowing when to fold ’em as they say in poker or as they say in trading…cutting your losses.  Some good basic rules of poker apply to trading.

Know When to Fold ’em

Continue reading

chart's story

Is the Chart’s Story Clear or Confusing?

This post is a repeat of one I published over two years ago.  The title of that July 2014 post was “When you look at the chart, what do you see?” Some of the details might not be current but the idea sure is.  So what is the chart’s story?

It’s interesting to read the financial press. They always give a reason for the market’s action.  I can almost picture them sitting around and trying to figure out what they are going to say for any given day.  So the Dow was up 28.7 pts yesterday, what did they say?

Reuters: “Stocks managed to score modest gains on Friday, but the S&P 500 posted its biggest weekly drop since April as investors showed only mild enthusiasm after getting their first glimpses of earnings.”

Bloomberg: “U.S. Stocks advance as Internet rally offsets Portugal”

MarketWatch: “The U.S. stock market closed higher on Friday after the main benchmarks picked up steam in late afternoon, trimming weekly losses.” Continue reading

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