Trading There are days and nights!

Have you ever wondered why we have the nights and days? Have you ever surprised we have boom and bust? Why do you cry for the bust and cheer for the boom only? Have you ever cried in the night and cheered in the days after you grow up? Market players are mad logically and naturally. Who has never cried or cheered in the market?

Do you understand different people at different ages would react or response to the nights and days differently? Do you understand your behavior in the nights and days would decide whom you are in the market? How many old enough market players act as babies without moms around them?

Do you know something can be done by big boys and something can only be done by the little guys? Whom are you? Do you really know? In your offices do you know whom you are? In the market do you know whom you are?

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Most of market players just could guess it is night in darkness and it is days in brightness. How about the time period for the night start or day beginning? It is a too hard question for most market players could dare or have chance for answers.

How about the life? We want to have easy life in the market. Easy life needs resource. If you don't make these resources you have to pay for the resources.

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The fact is that big boys could not do very much better than average. Why? The story is simple enough. Anyone could win in the market sometimes but could not win always. Most of us could be succeeded for a while, garnering considerable profit, and feeling very good.

The aim to get better results always is legitimate enough; unfortunately, it appears that, in the context of human nature, the aim cannot be accomplished without incurring sizable risks. And in a comparatively short time with our hot heads the risks came home to roost.

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Resource booming made fortune for the societies. However most of the market players have been hurt by the crash followed the boom too. The boom in resources caused ominous headshaking by those of us whose experience went far back. We had GFC. The worst in second in the history.

Why don't you now worry about the huge hole after resource have been sold out? Why don't you cheer for the house as life investment option when the crowd run away? Why don't bet now with your guts on the qualities? You are smart but members of the crowd too!

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If you had ever cried since last April, have you checked how your mental framework works? If you are sick you have to admit it and then you could be cured! The problem is that it is very difficult for anyone to admit they are sick in the market.

Could you find enough people in any forum who dare to say they are not good enough? Most of losers complain others. Most of people in the sideline have lost the guts for their market life. Could you refuse to commit suicide in your life if you are completely hopeless?

So people could talk about the rules to market themselves into a category but don't want to change themselves for their market return. Generations of market players come in and wipe out. Most of market players would be the losers in the market!

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Don't tell you hold the truth in future! Once you tell this kind of story, you have put yourselves into the loser team! Don't think so? Check and think about!

You could have the rules and some passive schemes for quick money but if you don't know we would have bust and boom in the market as we have days and nights in this world, could you image what you would get.

I never see anyone, who could not tell the night and day, could make his life. Could you tell the night and day and do you know what would happen if your could not tell the days and nights?

If you don't know the days and night but just know some assertions such as "stop losses" in your office, could you make money for your companies and yourselves? No one is so insane or stupid but in the market you could find most of market players are!

 

Changes and the same thing!

Have you ever heard "the more it changes, the more it’s the same thing before?” Do you know it deeply enough and understand its meaning in the market? It is so easy to know but few could use it in the life and market. Why? Who really care about it? However what your understanding about it would define some of your market behavior.

Have you been in the IT booming and resource booming with some shares then? Have you seen in the booming time, the bright, shrewd, and energetic people usually quite young? Why did you jump into the market? You felt very promised to perform miracles from some marvelous new breakthrough in tech and social environment.

We have usually been able to do it for a while or at least to appear to have done it in the booming time. We tended to share our exciting for our dreams supported by the fades and winds. All of genius and bums could make some money. However you have inevitably brought losses in the end.

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Even the modern regulation become complicated, the market keeps to make some cakes in the sky and the “miracles.” These cakes and miracles were often accompanied by flagrant manipulation, misleading corporate reporting, outrageous capitalization structures, and other semi-fraudulent financial practices.

After losing some shirts and feeling painful, we all tend to think about how to avoid the shirt losses. We have to do so. Market doesn't care about how may posts you post here or how you could show your cleverness and shrewdness. If you are wrong in time and price, it just wipes out your money and chips from the table.

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Without too many changes in our minds and learn too much this or that tech, nearly all of retail market players get lost in their market playing. The more you change your tools the more you turn yourselves to be the same member of the market crowd. You keep wonder why you lose when you have used so many lovely tools.

Why? You change in too many trivial matters but your mental framework are full of the primary instincts. It has been in your blood and your behavior. You just could not win over yourself. You appreciate W. Buffett but you never know how to roll the small ball. You are happy to act as George Soros, but you just don't know reflexivity! You highly evaluate the Plunge Boy in 1990s, Livermore, but you just could not figure out why he put the barrel at his own head.

More and more market players have got nothing from their experiences but two lines plus one stop:

1. Support line
2. Resistance line
3. Stop losses

or some complicated systems based on the similar fragile concepts. Could you expect a glory car with a engine from the wrecking yard to run smoothly and quickly to your destination?
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After every crash or debacle, there were some serious thinking and self checking. However due to the mental framework limitation, most of market would stay at the top only or bottom only. We all like short cut to fix the problems but we simply could not understand some problems have quick solution and some just have not short cut.

All of changes could not change the market result significantly. Genius would be the genius even never stopping to lose the shirts when the crash happen. The shenanigans in generations happens one after another. In nearly all of market forum or corners the old, gut-losing, booming hurt, and genius, were replaced by newer generations with gadgets and gimmicks that produced very similar results in the end.

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Once the new booming take its running at very beginning, outright manipulation of prices disappeared, but there were many other methods of drawing the gullible new crowd’s attention to the profit possibilities in “hot” matters. Most of market players are so easy to change but never could change their behavior. So cold winter let them complain about how their valuable seeds have been destroyed by the wrong policies. Why didn't Reserve Bank reduce the interest rate? It was stupid and was killing the market.

Few could be wise enough and ask wise questions for their own interests in the market. They could not understand Market is the place for Self-Interests. Could you expect Reserve Bank would care about how one sector performs? Market playing means choosing or selection. Most of market players never choose what they buy purposely for their profit. They choose what they buy based on the past charts which let them feel good.

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A very ridiculous thing happen after the crash. More and more worry about "the calm before the storms." Who could see the logic it is better to buy after the crash than to buy at the past peak? Who could see some has to change and some you just don't need to bother?

We tend to paste the popular views from the medias or internet googling. What we could not understand is if we just do the popular things, you could not get any good premiums. Could you find anyone who just follow others' steps to make fortune?

We tend to declare our losses are not caused by our own mental sicks. Have you ever seen a lot of market players to fight against their only one enemies, themselves? We do feel shame to admit we are sick in the market. We have more and more genius while we have more and more losers in the market.

Before we declare our genius and shrewdness we never know to ask a simple question to ourselves: if you are so great why could you not accumulate big enough fortune after a decade market playing?

 

Next great insanity!

Have you tried to get much as possible from the failure of market as a whole? Could you prepare for your daily jobs after you wake up in the very early morning?

The modern societies are so rich and then no too many bother to do so. We wake up, turn the computers on, check the share price from the lovely charts, and then go to work or google in the net or do things we love or we have to.

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Money for average is easy since you just need a job for your primary value, labor, white or blue ones. However if you want to get more you have to take the risks to get less than average.

How many market players compensate their losses in the market by their labor money? It seems all of genius type of market players do so. Why? They know sciences and what they have to do in the office, which often than not are useless in the market.

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Too many don't know the logic of “the more things change, the more they stay the same.”

Just think about RIO. In resource booming time, RIO just took over the over-value's business in the resource sectors. Its share price shot up to $135 and more in 2008 and then dropped down to $35 in the same year.

What did the buyers at the peak lose? It was about or more than 70%! That loss may have made RIO's shareholders even older and wiser than it made the boss of RIO. Why? The salaries are increased very much. The bosses in RIO don't lose too much.

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Intriguingly, the disastrous boom and bust of 2008 also came roughly 35 years after the previous cycle of insanity in 1970s and the consequences seemed worse. Perhaps it takes about 35 years for the investors who remember the last “New” craze to become less influential than those who do not.

I don't think it is a scientific conclusion. But if this intuition is correct, the intelligent market players should be particularly vigilant at about 2043 around. The problem is most of old and experienced losers in the market have gone and new ones just don't have the experiences.

Could I live for the next 20 years? I don't know! However I love the fairness in the market and believe we only can get the fortune by doing what we should do even we could not say we would get the fortune.

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Too many market players wonder another GFC would be ahead very soon. Maybe but the probability is very low. Why? Who dare to buy after they lose the shirts?

It would be the time for years the old market players gone and new generations are still in the way to grow up physically!

 

It is amazing...

Since 1920s' great booming and busts, how many old and new booming and busts have been made? Could we expect the boom and bust would stop appear? It is the same question would you expect days and nights would be gone?

It is amazing to see the repeat format of booming and bust. All of them have been made in a completely different atmosphere of regulation and prohibitions. You can not trade the inside news but there are still 85% of market players are the losers.

The market is the place where it is able to duplicate so much of the excesses and errors of the 1920s and 1930s even the magnitude could be less or much less. Everything could change but human nature for quick money is never easy to change.

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Do you like a fortune tomorrow morning? One of my best friends just tell me he thought I was crazy since I want to change my mental framework for slow money accumulation. If we have to put efforts and time why do we come to the market, he asked?

I just could not say any words any more. I just could not expect he could change and win. The market changes and he would never change. Could you believe he would change even I hope he could as I hope on myself?

How long are the days and nights in the market? Could you tell that? If not, how could you avoid to be cheerful when the Sun shines brightly in the way it drops into the darkness?

 

New Regulation and new delusion

After each of market great crash, most of market players would be hurt terribly and all of funds would be in big losses, which would push the public away from the market and a lot of market players would be depressed and run away from the market. If you question this observation, you could count the number of posts here and read the posts here to sense the market mood.

It is natural after big crash there will be new regulations and new prohibitions on what could be done not not in the market. The specific abuses of the 2008 will be fairly adequately banned from the market. But it is probably too much to expect that the urge to speculate will ever disappear, or that the exploitation of that urge can ever be abolished.

Market extra excessive delusion would find its way for back to the market. Everything can be changed but human is hard to be changed. We need to know about these “Extraordinary Popular Delusions,” and to keep as far away from them as possible in the future market playing.

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After the crash all of funds perform very poorly. If we take the peak as reference point, most of funds could not give their clients any positive return so far.

However if we are trying to be fair, the overall performances of funds is not at all disastrous. However usually none of good funds after crash was large, and the average size was very limited. It was true for the stocks. In the V-shape recovery, a lot of pinnies surprised the market too.

Thus, there is a strong indication that smaller size is a necessary factor for obtaining continued outstanding results if people could buy at the lowest points or around the lowest points of the market bottom after crash.

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It needs to be highlighted that there may be special risks involved in looking for superior performance from small size funds or dirty-cheap fishes(pennies).

All financial experience up to now indicates that large funds and blue chips, with soundly managed, can produce at best only slightly better than average results over the years.

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If they are unsoundly managed they can produce spectacular, but largely illusory, profits for a while, followed inevitably by calamitous losses. However there have been instances of big funds or blue chip that have consistently outperformed the market averages for ten years or more.

We need to know these good funds or blue chips with so good performances have been scarce exceptions, having most of their operations in specialized fields, with self-imposed limits on the capital employed. This self-imposed limits are important since it is a way to lower the costs.

 

It is not about the math!

A mathematician ask a question such as “if you have 10 dollars and one just was burnt on the fire and gone, how many do you have left?”

One market player, who looks not very good in math, answers, “None.”

“Well,” says the mathematician, “you sure don’t know your subtraction.”

“Maybe not,” this market player replies, “but I darn sure know what happens if I burn my money in the market.”

Who is right? How do you do for your stop losses? A lot of market genius until die would not have clue how logic of the replies from this market player. Do you think market is a place for number playing only?

 

Perfect and almost perfect

All of us want to play in the market perfectly. In most of time genius and a lot of market players do almost perfect. However if you do almost perfect, why did you lose your shirts? In ordinary life, we are far less perfect but the life is also almost tolerant for our imperfect behavior. So we could make bugs and fix the bugs while we move forward.

However in the market almost perfect is not perfect. There are great difference between them. Market could be imperfect but when it wants you to be perfect but you are not, your chips would be wiped out from the table.

We could not be perfect. Who is perfect and doesn't need the food and toilet. Because of the imperfections, most of market players could win for sometimes and pay back all in one time.

How many market players won in perfect before GFC and lost most of their capital in the crash? Few could not suffer erratic swings in performance. The intelligent market player must choose the stock with great care in order to avoid ending in disappointment. There could be some big fat mess.

 

Passive and active? Which better?

Are you a passive investor? Are you intelligent investor? Do you know you could be passive on something always but you could not passive to get a good mental framework? Passive should be linked with conservative and safety first. Passive should be about the trivial matters but no any passive mind for vision, strategic, and safety would get chance to have fortune.

Most market players simply buy a stock that has been going up fast. Most market players enjoy to assume that it will keep on going. And why not? However when the market players try to find the reasons for the future going up, they fall in the ruins. Psychologists have shown that humans have an inborn tendency to believe that the long run can be predicted from even a short series of outcomes. Do you believe that? Would you take a train just because some puffs come from the engine room?

From our own experience that some plumbers are far better than others; some Engineers would continue to fix the bugs others could not; some good restaurant would keep o serve their customer with the excellent tastes. Some market players would keep to get their money from the market; and some of us would buy in peak always.

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Skill, brains, and hard work are recognized, rewarded, and consistently repeated, all around us. However if you get a 50% return this year, could you be sure you could get that return this year and all of the years? Some of our posters implied they could. Do you believe them?

Unfortunately, in the financial markets, luck is more important than skill. If a market player happens to be in the right corner of the market at just the right time, he will look brilliant.
But all too often, what was hot suddenly goes cold and his IQ seems to shrivel or discounted by 50%.

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If you have ever played in the market in IT boom and bust or the peak before GFC and GFC, you would wonder what this stupid guy is talking about. He is insane. Actually what are you viewed by others is not important if you cold win something every year.

In 1999, that the market’s hottest market sector, technology, turned as cold as liquid nitrogen, with blinding speed and utterly no warning. Please do remember if you play in the market just on their past performance is one of the stupidest things to a market player.