The Inner Voice of Trading by Michael Martin
Ed Seykota, well known technical trader, in his foreward to the book says "Traders know the essential principles of trading: ride your winners; cut your losers; manage your risk; use stops; stick to your system and ingore the news. These principles work well in
trading and in life in general- when you follow them
consistently. Many people, however, find that following rules is not always a whole lot of fun"
The Author explains the book's objective - "The heart and soul of this book examines trading decisions from an emotional standpoint and helps you gain insight into your behavior."
The underlying message is to manage your risk - keep losses small. Exit a position if it goes against you. But, as traders we start thinking - suppose the position comes back then what do we do? The answer is simple - You can always get back in if you exit too soon.
Readers should think about this one.
As I trader, I have one clear principle which I follow - go with the market flow. Michael tells traders to 'Surrender and accept market movements' which is roughly equivalent to going with the market flow.
Traders are faced with whipsaws and losing trades almost every day. Accept these whipsaws, and, explore your feelings about frustration and despondency. "By allowing yourself to feel frustration, you eliminate the feeling of despondency for the rest of your life. That's a great trade.
Ed Seykota, well known technical trader, in his foreward to the book says "Traders know the essential principles of trading: ride your winners; cut your losers; manage your risk; use stops; stick to your system and ingore the news. These principles work well in
trading and in life in general- when you follow them
consistently. Many people, however, find that following rules is not always a whole lot of fun"
The Author explains the book's objective - "The heart and soul of this book examines trading decisions from an emotional standpoint and helps you gain insight into your behavior."
The underlying message is to manage your risk - keep losses small. Exit a position if it goes against you. But, as traders we start thinking - suppose the position comes back then what do we do? The answer is simple - You can always get back in if you exit too soon.
Readers should think about this one.
As I trader, I have one clear principle which I follow - go with the market flow. Michael tells traders to 'Surrender and accept market movements' which is roughly equivalent to going with the market flow.
Traders are faced with whipsaws and losing trades almost every day. Accept these whipsaws, and, explore your feelings about frustration and despondency. "By allowing yourself to feel frustration, you eliminate the feeling of despondency for the rest of your life. That's a great trade.
1 comment:
Hey, thanks for the information. your posts are informative and useful.
Jtekt India
Post a Comment