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Trading The Mindset Of The Profitable Trader.

Discussion in 'Shares' started by Tropo, 27th Feb, 2012.

  1. Tropo

    Tropo Well-Known Member

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    I have to admit it is always intriguing to see the ideas that new traders seem to have picked up along the way and often how tenaciously they cling to them.
    This observation has prompted me to revisit some thoughts I jotted down awhile ago on the delineation between the successful and the unsuccessful.

    Is failure inevitable in traders?

    The answer to this is unfortunately yes, the majority of people who attempt to trade will fail and fail dismally.
    They will fail not because they lack a powerful enough computer or they don’t have cable TV or their broker is an idiot or because the new sine wave corrected low fat twin overhead cam moving average doesn’t work properly. They will fail because of the people they are, traders have been failing in their droves ever since there have been markets.
    Markets have seduced the best and the brightest none are immune. Even Isaac Newton one of probably the five smartest humans to have ever lived was caught by the speculative fervour surrounding the South Sea Bubble.

    Don’t be too depressed by this to a degree it is not your fault you have been hard wired to fail. I am not talking about such babble as your mother didn’t hug you enough or you were dropped on your head when young I am referring to the way evolution has hard wired your brain to respond under certain circumstances.
    It is this hardwiring that prompts most traders to engage in behaviour that guarantees their failure. The types of behaviour that guarantee failure can be examined in the context of responses to various situations a trader might find themselves in.

    Loss aversion except when threatened.

    Life for your average cavemen must have been inordinately harsh, each day survival was at the forefront of all activities. As such it was paramount to avoid any form of loss, when you are living a desperate hand to mouth existence to lose a little may mean you lose your life.

    It may seem that this sort of background would naturally predispose us to be adverse to loss. However consider this in a wider context, this would naturally predispose early man to not being a big risk taker.
    If you had just enough to get by why take unnecessary risks, risks that may spell disaster for not only you but also your extended family or tribe. If you came across an unexpected bounty such as a tree in fruit or an abandoned carcass the natural response would be to grab whatever could be carried and then run for shelter.

    Consider the old phrase of you will never go broke taking a profit.
    This phrase has its roots in the actions of our early ancestors. They were risk averse for most of their existence, if they saw a profit in terms of an unexpected bounty they would grab what they could an run.
    This is precisely the behaviour of most traders, if they have a small profit they are inclined to grab it and run.
    One of the most time honoured maxims in trading is to let your profits run. Most traders are completely incapable of doing this the reason they are incapable of doing this is that they have been programmed to behave that way.

    When you make a small gain in trading hundreds of thousands of years of primate evolution come into play forcing you to take tiny profits and exit the market.

    However in doing this you have guaranteed your own destruction.
    The counterpoint to this inability to let your profits runs is to cut your losses. Just as evolution has made it impossible to let profits run it has also made it impossible to cut losses.
    The answer to this lies in the way our ancestors survived.
    Imagine that you are a loss averse cavemen each day you struggle to survive hoarding whatever food comes your way through good luck or good management.
    Sometimes through the course of their lives our ancestors would have experienced a threat by a predator a natural disaster or a competing tribe. It is safe to assume that in these moments of great stress our ancestors became risk seeking doing anything to save themselves from disaster.

    In averaging down this is precisely what the cave man as trader is doing they are becoming risk seeking when they should be risk averse.
    Traditionally as a stock a novice is holding drops away from the price it was purchased at the novice consoles themselves with the thought that their stock is a good stock and that good stocks get better.
    As such when faced with a loss the loss is compounded by buying more, risk is actively being sought out at a time of threat.

    This inability to take losses and let profits run has been termed the disposition effect and it is a well known phenomena among behavioural economists.

    The professional trader understands that when a position moves in the wrong direction then they should become risk averse and exit the position.
    The novice trader hamstrung by primitive behaviour becomes risk seeking and buys more of the stock and completely abandones any pretext of sane money management.
    Conversely, when faced with a bounty in the form of a position moving in their favour the professional becomes risk seeking and engages in pyramiding.
    They add to their already profitable position by buying more.
    The novice exhibiting all the behaviours of our ancestors exits the position early and feels better about letting their profit escape by repeating the time honoured losers mantra of I left something on the table for somebody else.

    Confidence before realism.

    Confidence would have been a key survival strategy in stone age times, those who survived undoubtedly believed they would survive. Confidence would have had an emboldening effect on the individual.
    Such a factor would not seem at first to be a limiting factor in trading since confidence is a feature of not only top traders but also anyone who is successful.

    However this excessive self- confidence leads to an overestimation of ones ability to perform certain tasks. Everyone believes they are an above average driver but simple statistics tell us that this cannot be true.
    This overconfidence permeates the trading arena as well, the interesting thing about over confidence is that it is not gender specific but it does have a distinct gender drift.
    Terrance Odean an Associate Professor in behavioural finance at the University of California Graduate School of Management in analyzing over 35,000 brokerage accounts found that males traded 45% more than women.
    This active trading actually reduced the performance of the males by 2.65% per year whereas in the females it reduced trading returns by 1.72% per year.

    Men traditionally rate their level of confidence as being higher than that of women in what are perceived to be more masculine tasks.
    Men report trading as being a masculine task that they should excel at hence they display a greater degree of overconfidence than women.

    The most striking thing about Odean’s work is that active trading significantly lowered returns from a given pool of funds. This again is a reflection of overconfidence most traders believe that they must be in the market constantly and that their level of skill allows them to engage the market all the time.

    This overconfidence also reflects itself in an interesting side effect.
    Traders believe that they are some how capable of influencing the market. This may seem like a ludicrous suggestion but consider this.
    Have you ever watched people filling out lottery tickets by hand.
    The question is why do people fill out a ticket in a game that is determined purely by chance by hand. The answer curiously enough is that they believe that by doing so they influence they outcome of the event. This may sound irrational but the majority of traders are irrational.

    Gossip.

    Trading is essentially an information management exercise it requires traders to sift through vast reams of data to seek out trading opportunities.
    The most efficient way to undertake this exercise is to engage an objective trading protocol that simply looks for movement in indices or stocks based upon whatever criteria are of interest.
    Unfortunately most traders sabotage their chances of success by having a random set of inputs into their trade selection. The most insidious of which is the tip or the rumour.

    The internet has brought with it a vast increase in the resources available to the trader. There is now simply no limit to the amount of information that can be brought to the desktop PC. But this revolution in communication has brought with it a hidden downside, the ability to either propagate rumor and misinformation on a grand scale.

    The perception of having inside information is one of the most dangerous traps novices can fall into.
    About the only time I would agree with Warren Buffet is that with a million dollars and enough inside information you can go broke.

    Novices are attracted to what they perceive to be a tip or inside information for evolutionary reasons. Early primate societies undoubtedly had rapidly shifting power structures.
    Those who survived were those who understood these shifts in power and swiftly adjusted to them and multiplied. Since there was no evening news to inform individuals of these changes the only way they could be communicated was by very informal mechanism one of which evolved into what we call gossip.

    Humans love to feel as if they are in the loop or they have the inside running.
    The internet has enabled the spreading of gossip at an extraordinary rate, this has largely been facilitated by the evolution of the internet chat room or forum.
    A benign interpretation of these facilities is that they are the 21st century equivalent of the town hall social or perhaps a specialized club where ideas and information are exchanged.

    Much is made of the view that chat rooms are really an extension of the old share club idea.
    But as Terrence Odean has shown so wonderfully in his paper “Too many cooks spoil the profits: the performance of investment clubs”, Financial Analyst Journal January/Februaury 2000. Share clubs conspire to lower the trading performance of the individual trader.

    A more pragmatic view of the chat room is that they are the equivalent of a gossip magazine whereby the gullible are lead by the ignorant. And that they promote a variation on the group think so essential for the formation of a crowd or mob. The unregulated chat room is the hot house for misinformation and the rumor.

    In the past the ability to understand shifts in power structures was of undoubted benefit. Unfortunately it has left us with an evolutionary hang off that makes us vulnerable.
    A simple strategy for dealing with the insidious impact of gossip is to simply ignore it.

    Emotion before reason.

    All situations we encounter are filtered by our emotions first they are then subject to logical interpretation. Powerful instincts were a valuable survival strategy cognitive processing was a luxury that could not be afforded in times of stress.
    The same condition affects traders who react without thinking about or analyzing a given situation.
    This type of response often compounds the responses I have talked about earlier particularly the impact of gossip.
    Poor traders simply do not take time to analyze the situations they find themselves in. They react then they think.
    Chris T.
     
  2. wdongli

    wdongli Well-Known Member

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    Refresh your mind with rules regularly!

    To be survival let alone prosperous in the market, you have to refresh your mind with rules and principles regularly! It could wipe out some insanity and save you in the ruins.

    All of rules are easy to know but hard to follow. The reasons are obvious that we are human, we make human error even when we are normal in the normal market time, we are always lack the necessary knowledge and skills to tell how the winding perform but we could not completely isolate ourselves from the effects of the winding, we could be unlucky to jump up or down to the train in wrong times.

    ***
    Few of us understand the money from the market with bloods which could come from anyone in the market. Few of us, market could find the way to beat you down even you are extremely strong comparing with ordinary people. No one could win in the war without good enough protection on the critical materials or resources.

    It seems we could not just know the rules and principle but we need them in our bloods and bones or each sell. Before they are part of your blood and brain, you could not use them for your profit. Half understanding is much riskier than you don't hear them before at all.

    ***
    1. Markets tend to return to the mean over time

    When stocks go too far in one direction, they tend to come back to their long-term trend. Overly euphoric or pessimistic markets cloud people’s estimation and judgment of what they can reasonably expect.

    Who really don't know this law? This is a time everyone has the chance to educate himself. However education could not automatically make anyone wise even it could give people the chances to get the skills to sell in the labor market. This skills could leave you no worry for your mouth but it could not generate the chances for fortune.

    When all of us are so high specialized, we could lose the brain to use the simple natural laws for the general applications in the market. Big money if you are not absolutely lucky needs the risks and need the risks affordable. Unfortunately the minds within a special box just could not understand the time could make thing affordable or unaffordable.

    ***
    What's the means to you? Why the things return to means? When the price lower than means or higher than means under what conditions and contexts? Most of us understand the relative cheapness but how about the absolute cheapness in the market? Could you buy absolute cheapness with the confidence that the price would come back to the mean and reward you?

    Do you know history? What did the history tell you about the means and your buying and selling? Have you felt inferior since you have found you are not wise and intelligent but just a little bit better to twist the words? Have you tried to push yourself into the rules and rush out from the rules?

    English is not my mother language, which always play the part to push me down. It is not good news to anyone but I have tried to use my improvement in Social English as the benchmark of my efforts to update my mental framework. Could I beat the English when I try to update my mind?

    ***
    Happily to see the improvement in my social English(my precondition is I would not put any efforts to improve my English intentionally except I have to read or write for my mental framework updating) which give me the chances to update my mental framework much more effectively.
     
    Last edited by a moderator: 28th Feb, 2012
  3. wdongli

    wdongli Well-Known Member

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    Refresh your minds with the rules!

    2. Excesses in one direction will lead to an opposite excess in the other direction sooner or later

    Markets in a bubble can seem ready to pop, yet they manage to stretch into unrecognizable shapes. Conversely, markets in free-fall typically spring back.

    Unfortunately before 2002, I did believe that bull or bear would stretch into some recognizable patterns since then I believed my mind was a scientific or engineering one which were skillful and wise in the market. Did I know something of the macro-open or partly closed loop-control system for social matters? Yes I knew something but never thought the wild field just generated some forces we could have any chances to know good enough.

    ***
    "Excesses in one direction will lead to an opposite excess..." is not a scientific definition but an observation or self truism. It is so obvious but why could we not use it properly? Something is just out of our touch and then we all have the records about how we fail ahead of it!

    There are too many people want to use it but few really get it. "Trifling truisms clothed in great, swelling words." No these words we could not understand it deeply enough. Having these words we could be attracted by false truth.

    It is sarcastic to see all of people with this truism have bought when the bubble seems ready to pop out and sold when the fire has been lighted to burn the money!

    ***
    A lot of simple concept is not hard to get but few could follow as we should. Is it too late to know this so deeply? Something if we know when we are young we could make the world for ourselves but when we are aged we also lost some guts.

    It is hard for us to have both wisdom and gut at the same time. If you do have them when you are young, it is the gift! If you have wisdom, gut, and enough resources to go your own way at your, you should achieve something in your life.

    If you are old enough, you may agree that the age after 45 will act as the acid to your gut. You may still be very ambitious but your failure experiences drag your leg backward and your gut becomes smaller and smaller.

    There are too many wise men, in the market, who could not do anything but sit in the sideline to predict all of us would be in the hell. New era becomes hell everywhere, which is the symptom you become aged. It is very true after GFC and crash of the V-shape recovery!

    ***
    3. There are no new eras, human is the same as that a decade ago, and excesses are the result from crowd actions.

    Market players always latch on to the latest hot spots. A fever soon builds up and we all could hear the cheers that “this time it’s different.” It never is, of course.

    When the market cools, we are usually the last to know and sell at lower prices.

    It is so obvious so that you don't need the degree for rocket design. However it is what human really wants to get. We all have the dreams and we all want to get the things most of people could not get.

    Wisdom should not be ended with the Alzheimer disease. New era should not be replaced by the hell. However it is a process you just could not control.

    ***
    How?

    We could not change where we come from. We could not change what others behave. We could not know what market will unfold. So it is reasonable to expect we are in a new eras where we could be the lucky boys.

    However it is impossible for us, the human kind as a whole, to have a new eras, when all of us could make fortune without enough payment. It is very simple in logic but very hard to be accepted by any ambitious people.

    ***
    Why do you play in the market? It is a time all of people in Australia don't have the worry about the food. We want to get much more. We want to get enough money for retirement even we don't really understand what we really need in retirement.

    It is natural if you are greedy. Greed is good and greed pushes the people to use their brain extremely even most of greedy people fail in this wild world. The problem is you have to be greedy but you could not lose the balance between greed and differentiation.

    Most of us tend to go into one way too long and turn the course too late. The cruel fact is in the market you don't need to fail every day but one big loss could break down your nerves and courage forever.

    ***
    It is not easy to know no new eras in the market. It is nearly impossible to get the way for fortune in the ordinary and tasteless practice in the market as we do in our social life.

    For a long time I wondered why 85% of market players would fail in the market. I could not say I don't have any ideas about it but I never get so clear view about it before.

    We naturally are greedy since without it at all we would have the motivation to create the future. However it tends to be excessive and then when we become too greedy we lose the way without notice.

    ***
     
    Last edited by a moderator: 29th Feb, 2012
  4. wdongli

    wdongli Well-Known Member

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    Refresh your mind with the rules!

    4. Rocket-type rising or stone-type falling usually go further than you think, but they do not correct by going sideways.

    A popular matter can stay hot for a long while, but will fall hard when a correction inevitably occurs.

    5. The crowd buys the most at the top and the least at the bottom

    The time to buy stocks is when others are fearful and sell when others are complacent.

    ***
    6. Fear and greed are stronger than long-term trend

    We are our own worst enemy, particularly when emotions take hold.

    1>. To counter fear and greed, practice self-control.
    2>. In down markets, keep enough cash on hand or build your last defensive line so that no tempt to sell on fire.
    3>. In headier times, buy laggards. It will help you to be proactive instead of reactive.

    7. There’s strength in numbers, and broad, powerful market momentum is hard to stop.


    Conversely, when money channels into a shallow stream, people tend to crowd one side of the boat.

    ***
    8. Bear have three stages:

    1> sharp down,
    2> reflexive rebound and
    3> a drawn-out fundamental downtrend

    9. When all agree, something else is going to happen, bad or good.

    Going against the herd can be quite profitable, especially for patient buyers who can raise cash in frothy markets and reinvest it when sentiment is darkest.

    10. Bull markets are more cheerful and then can make hazard more than bear markets.
     
  5. Tropo

    Tropo Well-Known Member

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    Hello and welcome to the Mental Health Hotline.

    If you are obsessive-compulsive: Press 1 repeatedly.

    If you are co-dependent: Ask someone to press 2 for you.

    If you have multiple personalities: Press 3, 4, 5 and 6.

    If you are paranoid: We know who you are and what you want. Stay on the line so we can trace your call.

    If you are delusional: Press 7 and your call will be transferred to the mother ship.

    If you are schizophrenic: Listen carefully and a small voice will tell you which number to press.

    If you are manic-depressive: It doesn't matter what number you press - no-one will answer.

    If you are dyslexic: Press 969696969696969696.

    If you have a nervous disorder: Please fidget with the hash key until a representative comes on the line.

    If you have amnesia: Press 8 and state your name, address, phone number, date of birth, social security number, and your mother's maiden name.

    If you have short-term memory loss: Press 9.

    If you have low self esteem: Please hang up. All our operators are too busy to talk to you.
     
  6. wdongli

    wdongli Well-Known Member

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    Don't worry and don't make too many calls if you have not lost your minds and become a perfect idiots.

    Some good words here or there may give your a way to find the cure. No one could give your a cure if you don't want.
     
  7. Tropo

    Tropo Well-Known Member

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    Are you talking to yourself again? :rolleyes:
     
  8. wdongli

    wdongli Well-Known Member

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    You react based on your feeling again? Quite happy no serious criticism about my poor English from you. The benchmark is saying I am moving forward in the way to update my mental framework. Thank you!

    I did talk to myself and use it as a way to update my mind. People tend to believe they could talk to others of the crowd and become winners. It is a impossible attempt in my view. I just want to beat my enemy, the self with the primary instinct only.

    ***
    A basic fact is I don't have the capability to change my mind quickly enough. I have nothing to change anyone's mind definitely. I don't trust any extreme words without matter how gloriously they appear.

    I have to go down onto the earth to find my own way in this wild field. I could borrow some ideas but I could not be sure I could use them properly without enough knowledge of the context and conditions.

    I fully accept the fact in the market that it is a wild place and self-awareness and protection is must matter in our mental framework. Of course I would like to meet some comrades with the mind different from the crowd but it could happen after I could be good enough in my mental framework.

    ***
    Fortunately I am early bird among the retail market players to study the life logic and common sense.

    Unfortunately no too many in the market could understand the importance of the view of world and market, the mass psychology, and self promotion of their mental framework.

    Base on above observation, I have to go my own way in the market and separate the matters in the market from the social activities.

    ***
    I could not exclude myself from the crowd and no-brain market players, otherwise I would not need to build my last defensive line after sending big paper profit back to Mr. Market.

    No patient whose brains have been damaged, have the capabilities to know they are sick. Fortunately I still know I could be sick and my brain could be damaged by my market experiences.

    ***
    Do you know your brain could be damaged too? No? Have you made some profit when most of market players lost their shirts? No? Have you got enough fortune and plan to contribute for a better society and help your lover for their dreams?

    Do hope you could be one in Australia as Warren Bufftett or George Soros but please put control on yourself not to follow Livermore's full life cycle.

    My defensive line seems work now. The portfolio have been recovered all of capital losses made in this market stampede(April 2011 - present) even I have not got the lost paper profit back.

    ***
    I am not very clever but a stubborn old man. I do believe stubbornness is completely wrong if you choose a right way. I have to admit I started to lose some of guts. I have got some wisdom but less courage to open up a very bright future. Is it good news or bad? Hard to say. One thing is sure that I am talking about myself and really want to beat down the ME with the primary human instinct.

    I have seen your telephone number before 2004 when I tried to figure out what's wrong with my mind in IT booming and busts. I know we could not depend on the external sources to cure our mental ills. They are just the numbers.

    ***
    I don't think you have any mental problems. You could google and talk with good words for yourself. I am very stupid market players sometimes which have recorded in my market practice, and could not win in all of seasons.

    I do hope I could play in the winning seasons only. I do hope I could read your posts and figure out a way which I could use for my winning in the market.

    Could I get my goal? Hard to say but I don't have any better choices except updating my mind. Hope I could finish this cause before I lose the capability to think.
     
    Last edited by a moderator: 29th Feb, 2012
  9. Tropo

    Tropo Well-Known Member

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    Don't you get any attention back home?
    You should do some soul-searching. You might find one.
     
  10. wdongli

    wdongli Well-Known Member

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    It is a rule that no worries in your home, which is what you have to look after and try to protect first under any conditions. It is about your corner to protect you from storm and raining. Soul-searching and mental framework updating for market playing are different matters. We should not mix them together and should not let them affect your loves and families.

    It is a extreme view if you want to jump into soul-searching in the market and would fail. We could not be Gods and market is about jobs and business. All I do to update my mind is to do my job safely and economically. It is wrong to drag any moral matter into your market playing if you don't cheat and don't do inside trading.

    ***
    Don't forget you get profit and then you pay the tax. In this modern society, it is not responsibility-free to be richer. Unfortunately the rich usually work harder than the poor. I see a lot of bums idled in the streets and boarding houses for poor.

    I have not seen too many rich to spoil themselves before they have the money to spend. I don't look down anyone who are poor since they just have not chances. I am in inferior status to sell myself in Australia since English is not my mother language. Inequality for starting point is a wide phenomenon and in some extend you don't need to complain. All of us could change something around us for some lucks.

    It is fine you would like to be perfect but do remember we could not. Don't do anything intentionally to harm anyone, which is good enough. Don't worry about your hurt on my feeling. It is nothing for anyone who is matured mentally.

    ***
    Have you read the reports from W. Buffett? If you do, you would understand why you need to update the mental framework. It is about balance, responsibility, self-interests, and passions to work.

    I know you appreciate Livermore very much. Me too! But he did fail to update his very skillful plugging minds. He doesn't have the mental framework to hoard the fortune for long enough time. He was lucky but unfortunately he put the barrel at his head.

    ***
    I understand you could lower me since my poor English, which is reasonable but you should notice my English has been improved day by day, which encourages me to build my last defensive line rather than crying in the ruins for the sky falling down. It is useless. I still thought it was the action I should take logically and wisely after the damage has been done.

    Don't search for a perfect soul. No anyone in the market and this world could get one. We do need to search our blood and bones to wipe out the primary instinct as much as we can from our market playing.

    How do you do in your social life? You and me should be good people and should have some good or bad perception. Human is full of biases in social life even we make us better collectively. We don't need to be upset too much for it.

    ***
    It is wrong for anyone who try to put the people into a box marked by something based on our own feeling in the market. It is the start point we get lost in the market. Actually when we work hard to categorize the people we lose the senses in interfaces among people and market, which are always the place to fail down, if you have to fall down.

    I like the title "The Mindset Of The Profitable Trader" very much. We do need to search the ways to have the mindset for profit. However if you want to get the profit you have to get out of your boxes first. We are our own enemies only in the market.

    I do understand the difficulties for anyone who would like to behave properly and safely in the market. Hope you could overcome your primary instinct and read my post to trigger wise ideas for your profit.

    ***
    If my words could annoy you very much, market would wipe you out sooner or later. Trust me it is very true and obvious.

    In the human world only the market doesn't tolerate any biases and insanities.

    If I could win I have to get a good mental framework.

    If I lose I have to be the member of the crowd.

    Thanks whom? You have to go your way in the market!

    ***
    I don't expect revolution for my mind. Revolution is notorious to destroy the money. Evolution makes the future safe and promising if we could be survival.

    We all hate the life logic from any one whose name is not big enough and annoyed by the life logic even we spend days or months to get them from some remote places or great names.

    The cost is huge since we act inconsistently. Who care where the life logic and wisdom comes from? The losers! They are brainless and attracted by the glory appearances.
     
    Last edited by a moderator: 1st Mar, 2012
  11. wdongli

    wdongli Well-Known Member

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    Get ready before booming!

    In all of human fields, it is important for us to have some good experiences with some satisfied achievements. Here two words are very important: good and satisfied. We are naturally emotional and we could not deny it.

    Just think about a extreme case, a man was beaten and abused everyday since his birth, which has given his human experiences until now. What could you expect for the future of this man? Everything should be affordable. Pains if too much in your experiences, would lead you nowhere but more pains.

    ***
    Just think about our experiences of the retail market players, including me and you. A lot of market players have experiences in the market but just those to lose the shirts for years if not decades. Could you expect them happy in the market since their painful memories?

    Just cruelly face yourselves and think about your own experiences. Could you say the consequences from your market playing make you happy rather than painful? Could you tell yourself the truth: you are a experienced loser or winner? Great winning needs courage to know the truth. However how many mates here really have this courage?

    Most of failures and successes start from the impulses for successes. Do you agree that? Could you figure out the underneath logic? If you could not get right answer for this simple but vital question, how could you be successful.

    ***
    Do you agree it is not hard if you work hard and get what you want? Do you agree it is terrible if you work hard but you just could not get what you want? Do you know the answers for these two questions would decide if you are happy or crying tearfully and hopelessly since all you think and do are toward the same goal, failure, unintentionally?

    Sometimes my friends just wondered why I could get a job after stopping work as an Engineer. I wondered too but thought about it with the life logic and common senses it seemed obvious. I have broad experiences in what I could be happy and get some achievement and I tend to lower my expectation for salaries since I never believe I could break down culture and language barriers without big enough lucks.

    ***
    I really want to protect my feeling after I have worked to realize the dreams which were available for my generations who born in China. A cat in the box could not run far enough without matter what he wants. Feeling defines your happiness of life and what you do just for the background of the happiness.

    However I was a risk taker naturally and I never stop to look for the chances to break down the barriers of my box. When I run very quickly for a few days I could make myself believe I have got out of the box forever. This is a very tricky mental matters. When I start or before my start, usually I put a lot of efforts to prepare, which usually could open the new chances and helped me tour around the world legally with financial support from others.

    However I am hungry for successes since my heart was young. A simple logic has been broken, that is you spread the seeds, work hard for the success tree up, and harvest hard for what from the tree. Along the road, I was attracted by some new things and ignore the harvest time. The problem is no harvest what could you get the necessities for the winters.

    ***
    Some of my friends wondered how I could buy ERG at its $1 and hold it at $40 until it comes down to $0.20 around. Something definitely is logic and the causes! Seriously saying it was greedy and over confident about myself. I did forget "nothing could grow into the moon" and refused to harvest when I should.

    I have to say I become wiser than before but I also have to agree that my gut become smaller for the right opportunities. To my personality it is not bad news. Actually I harvested very well in the GFC ruins since I sold nearly all before the GFC crash, bought back in the ruins between Dec 2008 - March 2009, and sold a lot at the peak of V-shape recovery. All of these actions come from my efforts to update my mind and rebuild my mental framework but unfortunately the evolution could not be finished in years let alone months.

    ***
    2011 - present was the time period very important for my mind updating. The harvest made me greedy and ignore the basics again. Nothing could make you lose but insanity and unaffordable risk do make you be the loser. I lost all of paper profit which had been built between Oct 2010 - March 2011 plus 15% capital losses. It shocked me very much. It is not just about the losses but the difficulties to keep us to be wise when the whole market is crazy.

    I need the time and space to let me cool down. I need to hold my position without extra exposure to the market for new risks and burning on the fire. I need the last defensive line in case the market could be in the ruins much longer we could assume. All are not anything but logic.

    If you lose, it means some of your systems, skills, and experiences are problematic. Before you could figure out the causes, the safest way is to stay at where you are with what available protection you could get. I felt funny to see the crying tearfully by our mates. I felt hopeless to see the googling used for supporting the biases and personal showing off!

    ***
    What am I thinking about?

    Not too much but hold my position until everyone here could feel the hotness of the market and more jump in to the cheerful team, build my defensive lines and update my mental framework for the market, buy more with affordable risks, and be ready to harvest if they are good enough.

    Simplicity is beauty even it is not easy to get the simplicity. Simplicity and working need the persistence and passion. Most of market players fail to get long term goal logically and then they may be very skillful but not focus on the let the last defensive line go ahead with them.
     
    Last edited by a moderator: 2nd Mar, 2012
  12. voigtstr

    voigtstr Well-Known Member

    Joined:
    24th Jan, 2007
    Posts:
    679
    Location:
    Hobart
    top left of screen, click Settings.
    Edit ignore list (about half the way down).

    It's brought clarity to my forum reading experience :)

    I'm actually happy to read the forums now. Whereas before it was more like "here we go again :confused: :( "
     
  13. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    Seconded.

    At one point I thought it was getting so bad I was thinking about starting my own investment forum.
     
  14. voigtstr

    voigtstr Well-Known Member

    Joined:
    24th Jan, 2007
    Posts:
    679
    Location:
    Hobart
    At the moment I'm a break even investor. Starting monday I'll be tracking the daily close making sure I havent hit my stop loss. If that causes me to drop out of bhp and take a 25% hit then so be it... (another share I have MND, is at 21% in the black, it just needs to keep trending and any loss in bhp is covered)

    One thing we have an advantage on over most managed funds is if we are stopped out, we dont need to re-enter the market until its heading the right way.

    cheers
    Voigtstr