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Trading What fail us?

Discussion in 'Shares' started by wdongli, 11th Aug, 2011.

  1. wdongli

    wdongli Well-Known Member

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    Extremely unluck and no desire and skill to manage ourselves, will fail us!

    I am not good in spoken English, right? I could keep to write so that it would become my first language to think and I could use the progress to check my mind updating! The selectivity is the management!

    No good CEO in your business, you will fail! Cannot afford to get Warren Buffett as the CEO of your business? Could you make you be a good enough CEO first?

    I never worked as a CEO before. Big problem but if I want to go further in the market what can I do? I have to make me a home-made CEO for my trading/investing business!

    ***
    Life, marriage, and anything you want, need some plan and management! Why could you go so well in your office?

    You don't update your knowledge for your investment. Your management of your trading/investing business is exposed as inadequate and worse. We need to be organized and then we could be disciplined. In a excellent self-organization, we can work to analyze and so that we could make our own judgment and decision independently!

    When we put the money into the market based on the feeling, we don't know we are working in a poor managed organization, our own trading/investing business. Poor management usually destroy more value than they add.

    ***
    Many of the most energetic people in business, from chief executives down, do not really have a job: rather, they pursue a number of projects. Yes we have to be operators in our own trading/investing business, but we could not be operators only!

    Management is an odd task. On the one hand, a buying and selling involves a
    team or a group functions which need you to implement: it is a cooperative and not a hierarchical arrangement. Could you make all of the necessary functions in your trading/investing business work together for the best outputs?

    ***
    Trading/investing should be projects to add value, which needs the innovation and ad hoc arrangements. The art of the manager of your trading/investing business is to focus all team members or functions on the few things that really matter.

    So when we say we need to be organized, disciplined, analytical, and self-reliant, that means we have to manage ourselves for the profit fiscally and in long term! It could not be done just based on what we believe in value, stopping losses, and systems. How could we put all necessaries together to add value and make the business or let our job done!

    We know what we want but fail to organize us efficiently and effectively, which fail our trading/investing in my view. What is the most fatal issues to you in the market? It could be anything! But could you get the first thing done and make profit for your trading/investing business?

    ***
    Your minds decide whom you are! Your tangible system is one kind of resource you could use for your market trading/investing business!

    In IT bust I felt I don't know the life logic and common senses good enough and a lot of other problems. No senses are the most fatal problems to anyone in the market! After getting some senses, we need to be never synchronized with the market sentiment. We need to change behavior. How? To be businesslike market player!

    Business knowledge is necessary and we could not get all into our pocket. So how to turn what we have known in our office in the application to make money in the market? If we could do so, we could get our behavior desired for the market much quicker.

    We may be lack in knowledge but not all. Some are critical but some could be added into our mind later. Which is the first and which is the last, would decide what you could get in the market!
     
    Last edited by a moderator: 11th Aug, 2011
  2. wdongli

    wdongli Well-Known Member

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    Basic for small business in trading/investing

    Bad money management destroys the money

    1. Before you buy something, ask yourself if you can afford it. What are the alternatives? Investigate second-hand options.

    2. Where do you put your money or cash-equivalent? It wastes your money to stash it in low-interest transaction accounts. It capitalizes on cash - invest it in a high-interest account.

    3. Please track expenses. Most spending can be foreseen. Draw up a monthly budget to maximise your regular wage.

    4. Don't wear too many hats. Learn to outsource a task, which is not what you focus on pursue money-making activities that you do well.

    5. Don't flash before cash. Some of us care too much about having the glossy and greatest status symbols. It can make your head hot.

    6. Don't repeat the same mistakes. Learn from your mistakes so they don't hold you back. Too often, the same mistakes are repeated relentlessly. Billions of dollars are lost through failure to learn what went wrong last time and to adapt.

    7. We need enthusiasm for our business. Without it the chances of success are remote. It's passion that will get you over the line,” he says.

    8. “Visualize” your goals, that will fuel success. A vital and often missing part of that process is conviction. No goal, plan for goal, and passion for goal, you will flounder.

    9. Fill the vacuum of knowledge and skills. Find what you need and get them in priority. Could you hire someone for your profit

    Going solo and not asking for help when you need it can stifle growth and mean you miss opportunities, says Green.

    10. Business is business. Don't find excuses for you to miss the goal of profit.
    Passion killer
     
  3. wdongli

    wdongli Well-Known Member

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    Fear and cash reserve

    All of us know we need to buy lower than that we sell at. In reality 20% of market people could not do so. There are a lot of issues which fail these 20% but main issues are caused by buying without margin of safety and selling in panic.

    In this bear market, the panic selling is quite powerful. It forced the bargain hunters to sell on fire. Generally saying it is the very good time to buy in long term prospective. XAO has got what it expected. The selling of DOW and actually it led the selling in panic. The fatal matter are

    1. have you got enough cash reserve in the last 22 months consolidation?
    2. how could you average the risks out if XAO turns worse?

    ***
    If war is a art and market is a war place, another question is

    How could you keep your winning position you have accumulated in the relative or absolute bullish market before it gets into anxiety?

    This question if kept to be asked in the bullish time, would result in the necessary prudence and you would have to lock the profit to get your business goals, direct or indirect ones. This is fatal for any market service business. Anyone fails to do so would result in cost run and no or too little cash reserves that needed when market selling finishes!

    Selling is the necessary step before the panic selling for your chances to get the cash reserve! It is not new or genius idea but if anyone fail so, he would burn money or be trapped as a dog! No cash reserves after everything has been sold on fire, you would have not gut to give the best service to warriors and lose the opportunities to reduce the cost for the coming bullish time.

    ***
    How to use the cash reserve is another fatal issues after great crash or market stampede. Market never play as we hope. We can calculate the risks but more or less we would be wrong.

    1. Buying at the bottom is at least better than at peak.

    2. Worst time is not a time point but a time period.

    In the days' horizon, it is impossible to get the things at lowest price but in years, it could be! I bought CTO at $0.066. If it would move up greatly, for example, $0.20, all of buying below $0.08 would be lowest prices.

    Market recovery is a process not a event. So to deal with the problems of a process you have to get your process to guide you how to deal with it first.

    We have to filter out the extremely negative spikes. That needs the time average or more complicated systematic way!

    3. Allocate the capital in time average and diversification to be sure safe!

    In the last few months the bargain hunters were dragged onto the the slaughter table by Mr Market. That is not new too. Each great crash would try all to destroy the guys without strategy, plan, and organization for safety!

    ***
    After all of market cry and feel the pains, it is critical to keep enough cash reserve. Crash is telling the people market is becoming valley of death.

    After crash, the dead market fishes, swans, and angles would greatly fill into the valley and give the chances for service people to play their part. However some points are still very risks. It is necessary to be selective! Tech never could replace the strategy, plan, and management of operations. But it is necessary to use the right one to make the service is less risk and more warriors could be serviced.

    Market warriors don't understand what is vital few and what is trivial many! They tend to use the similar tools to those in their office in the market! It is a fundamental mistakes.

    ***
    Great crash is a matter which happen ever few year. It is great if you could use it greatly! I dared to quit my job mainly because I could double my capital in GFC and its V-Shape recovery. Now I could not do my best to service the warriors since I made a series of mistakes since April.

    Very happy to see the panic selling have a pause. The sellers on fire have got what they want. I am targeting the coming bullish time for recover my cash reserve and buy in time average when next crash comes in! It is unavoidable even 20% don't care about it.

    I have to care about it since I have the responsibility to service the market warriors to make they happy or let them feel less painful. I cannot stop them joining the war but I could let them feel better!

    To service them better I should act different from them!
     
  4. wdongli

    wdongli Well-Known Member

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    Tech is great but must be used carefully!

    I was trained as an designer of the electronic control system. I loved the tech very much and never dare to forget the first rule: "Fail safe." This rule is not tech itself but is most important than tech itself! Before designing a great control system, you have to get the tech to be sure the designed system is "fail safe."

    Most of technicians don't understand the causes and effects of the input, output, and feedback, but do believe they can run a flawed system safely! It never happens. Business is a system and each person is a system too. All of systems have its inherent limitation! You could not run out of the limitation for a run with the characteristics, "fail safe." Once a system crash, the damage would need 10 times of efforts to repair or be fatal to send them into the rubbish dumps.

    It is easy to say you have to be organized, disciplined, analytical, and self-reliant, but you never get yourselves into the class for necessary education and get the necessary organization to guide yourselves behave so! It is far more than any tech system can do! We need to be more complicated than the system hardware you operate on! It is the logic and if you break this logic you could not be safe!

    ***
    I try to understand the features of the bear market in and after crash with the simple tech since I believe I have to develop my business senses to get myself organized, disciplined, analytical, and self-reliant.

    What caused the crash?

    The drama of US default storm, which made all around the world to worry. It was unprecedented. S&P downgrade of Treasury debt. European debt crisis. And concerns surfaced about French banks, which reportedly have substantial holdings of derivatives. It was worse in Australia. XAO has worries for more than 20 months and it had expected something seriously wrong and if no crash it doesn't dare to move his feet into the future, which I refused to accept but turned to be true!

    What the tech features in and after the crash?

    Technically, there were a few mild positives in Wednesday’s session in Nasdaq, which are shown in the changes of momentum, reduced volatility, and its MACD.

    [​IMG]

    DJIA also show a few mild positives, which warn the shorters greatly so the selling pressure was reduced in Wednesday too.

    [​IMG]

    These small positive pluses turned stronger. the late-day selling of Nasdaq in Wednesday went out just above its low for the day. It is known technically as an “inside day” due to its price range from high to low being inside the price range of the prior day. Such days normally reflect consolidation, and often result in a short-term reversal.

    What happen after crash in history?

    The nine-day descent culminating Monday was the third-steepest in at least the past 49 years. The other two sell-offs that exceeded the current decline occurred in October 1987 and October 2008.

    [​IMG]

    In 1987, the market found its low quickly after the sell-off, then traded flattish with an upward bias amid much choppiness over the subsequent seven months.

    [​IMG]

    The October 2008 showed the market ultimately finding its bottom five months later.

    History shows that bottoms which follow historically steep plunges are more of a process than an event. They take time to play out.
    Do you want to know the vital few? It is what I get from the history!

    ***
    If the market would rebounce back, how could I ride it in full? This time my task is much tougher since I used up my cash reserve. I need to mull and get my strategy right first and then I could use the tech for my strategical goal safely!
     
  5. wdongli

    wdongli Well-Known Member

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    Is it why you fail?

    My experience in market tell me all of my failure come with some sort of synchronization between my emotion and market feeling.

    1. When market cheerful, my head becomes hot so that cost run and cash reserve used up

    2. When market fearful and you have burnt the money enough, you could not stop but help crying.

    It is a great time for market warriors to find the material to support their crying. They need this support to let them feel better. You could feel painful but you could not cry since you know what is wrong with you. You cry since you feel it is not your fault but something out of your touch!

    I will be much more upset if I just cry and google around to find the thing I could cry loudly and look as though I am wiser!

    ***
    Human being never could be in the sunny days only. I always believe a man should face his problems and fix them for future.

    Why do you always cry? Life is to make not to waste to work hard for crying! Overoptimism is wrong but pessimism is wrong too. We naturally can live as a dog but we are not. You have to dance on tap to find the solution.

    1. Why are you so painful?
    2. What really cause you have to cry?
    3. Why don't all of people cry so loudly?
    4. What're your crying for?
    5. When do you cry so loudly and why do you cry this time?
    6. Do you know crying too long and too loudly would damage your health?

    IT bust, GFC, missing of the opportunities from Gold, V-shape recovery, and so on, make too many experienced losers get used to cry.

    ***
    When you focus on crying, the chances pass by in your hand. Get up, man! Let's work on to get rid of the chances to cry in future! However behavior is the accumulation of the experiences for long time. I know if you get used to cry, you will cry!

    Hope you don't cry anymore! I make mistakes but I don't cry! I will dance on tap to work out for solution even I could be really fool! I could be fool and hit my head against the wall; but after I feel pain I would choose to sit down; wonder at least how I could go around it; if I am lucky I could go around the wall with the help from life logic and education!

    Why do you fail, fools? Just cry or cheer but never sit down to think about how to go around your corners!

    Hit the wall with your head; too painful, cry as loudly and intelligently as you could; get recovered in crying from pains; cheer when market is cheerful!

    What will happen in future? Hit the wall and cry... again and again. Have you cried in IT bust? Have you cried in GFC? Have you cried in consolidation? Before the crying why you were so cheerful?

    Hopeless!

    A man could be stupid sometimes but should never be hopeless since hopelessness means useless! Useless means rubbish in English, isn't it?

    ***
    If you really don't enjoy to cry so loudly and want to fix your problem, stop to cry but try to update your mind and change your behavior! Don't know how to start?

    "The Development of Asia: Risk and Returns for Australia" (RBA: Speech-The Development of Asia: Risk and Returns for Australia) may let you see some light when all of the market cry for US and European debt crises! Decoupling theory went into extreme but somethings happen and the world is in structural shifting!

    Don't believe it? A closed mind could not stop crying. So people should leave you alone! You have the right to cry!
     
    Last edited by a moderator: 12th Aug, 2011
  6. wdongli

    wdongli Well-Known Member

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    Fatal if no vision!

    To be successful in the service business in the stock market, you need vision and mission, strategy, plan, tight control on your operation. But most of us don't have them in the market.

    What vision is to a market businesslike people?

    1. It is the way you will look in the future.

    Just look at the rear-view mirrors and google the data to rationalize what market is doing or what you feel?

    People need hopes. When you desperately to rationalize despair, you will be doomed. Hope is not wish but the anticipation of future with goodness or benefit, which has high probability to be got if enough efforts could be given on!

    People have biases to the future since there are gaps between our future image and future reality. This is the place we should put our efforts on.

    2. Vision is a long-term view

    This view need the ways to look in the future. Market are full of certainties. Wrong long term view would result in getting lost in the way.

    In the darkness, if you don't have the right way to look in the future, you could see darkness everywhere in future.

    So you need to get your way to get vision right, don't you? It is sad a lot of genius use some systems without any vision. So there are too many genius fall down in their way!

    What is the mission?

    It is the fundamental purpose, which needs clear reasons why it exists and tell what it does to achieve its Vision.

    It is sometimes used to set out a "picture" of the future you would like to get. You need to know the details of what is done and answers the question: "What do we do?"

    Few has the mission with clear and right vision.
    Few would like to get the way for their independent long term views
    Few would link what they have done with the future and then could not answer what they do!
    Few could not feel panic or euphoric then!

    Why do you fail?

    You fail in the basic logic how to drive your market vehicle to your desired destination.

    You don't fail because what you use. You fail in your own business!

    All of great traders and investors say so but few really like to listen. They are the master to use cliches creatively in their daily life. Actually there is a air gap between cliche and wisdom!

    When anyone loses vision, what could he get in the market?