Join our investing community

Trading When you feel upset...

Discussion in 'Shares' started by wdongli, 11th Mar, 2012.

  1. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    People are emotional. Few could handle the emotion properly when upset or over-excited, which usually exist when some abnormal events happen.

    Sorry a human error, click a wrong key, deleted most of words. I have introduced a lot of constructive and protective methods to write concise and helpful posts for involvement and myself, but still could not stop the human errors and upset the fragile feelings terribly times by times.

    However it is a risk which have very littel real consequences. Just leave it as it was and move forward to update my mind.
     
    Last edited by a moderator: 11th Mar, 2012
  2. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    How do we buy, hold, and sell? What should be the reasons to do so? They are about goals and methods to get our profits with affordable risks and be sure we could get the profit goal in 2 years, 5 years, 10 years, or the whole of lite time.

    Are you so clever to ignore them since if we could catch up a huge upleg, we just can get what we want? All of clever gamblers in Casino think as that. Most of gamblers could tell you how they beat the Casino times by times but they usually would not tell you they have lost all of their pensions or salaries every fortnight or month.

    Do you keep losing cleverly? It is not a problem if you enjoy. Enjoyment needs services and no service really could be free. I hate to be so clever as a gambler. How about you?

    ***
    Any action to make money needs capital. It is risk you could lose your capital rather than profit. You are still confused. It is not a problem you could leave it alone. I am crazy and I could not leave it alone so that I have to update my mind.

    Risk need to be identified and find structural ways to avoid, reduce, or take for better profit. How? We need clear mind about it rather than guess and feeling. You can trust anything but you have not to trust your feeling and guess.

    ***
    There are some ways to identify the risks and their consequences to your finance.

    1. Brainstorming:

    it is a easiest and no constructive way; most of market players don't like it since it always upset them than help them. The best way to avoid the brainstorming is to ignore any words upset you and just google what you like or support your good feeling. Why do you make trouble for your happy life which needs good feeling.

    2. Preliminary Process Hazards Analysis:

    Market playing actually could be seen as a process which take your capital, vision, gut, knowledge, stupidities or wisdom, views of the market, and so on as input, initialize the process to produce something, continue the process and display something for your supervision, control, data acquisition.

    Usually we try but few could do the job properly.

    3. Checklists

    Most of retail market players could do since it just needs patience and consistence and responsibility, but usually don't do.

    4. What-if/Checklists

    It is helpful but if you list many what-if you could be viewed as idiots by the crowd. They upset to question and questioned.

    5. Hazard and Operability (HAZOP) Study

    Few care about it

    6. Failure Mode and Effects Analysis (FMEA)

    It is a rocket theory to most of retail market players even they could be paid to do for others. They act as employee in the market. They don't do without payment in advance but they really want to get they don't deserve.

    ***
    1. Money could be got by your excellent working with some good enough lucks.
    2. Money could be got by pure lucks but usually could not be hold for too long.
    3. Money like to come to the prepared minds with the constructive ways to screen the unaffordable risks away.
    4. Money is much easier to lose or consume than we assume

    The rule is if the consequences of the risks would get your shirts away, you have to try all to avoid it. It is nothing about losses but catastrophes of your finance.

    Looking back for lessons, I have to admit it was a catastrophe to lose $400,000 paper profit, which could be sold to the villagers but I didn't... Why not?

    ***
    It is actually the root cause for people to use stopping losses since they assume if they could stop losses they would avoid the risks but they forget losses in the market is normal and sometimes the losses are the necessary for future profit.

    It is the logic blind point for them. Any blind and illogical ideas would cost your money.

    You have to stop the risks for unaffordable losses in future proactively rather than stop the affordable losses for any high probable profit. Who could stop losses to sell in Mach 2009? They effectively stopped the profit and recovery of their losses.

    What's for to sell after you have got nothing maintained in your portfolio? You actively work to close your door.
     
    Last edited by a moderator: 11th Mar, 2012
  3. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Is it a event to lose your shirt?

    Accidents usually happen while we are very happy and relaxed. Have you intentionally made a crash in the freeway in the cost of your life?

    In drama it is normal; in reality, few would do! Big losses usually happen when all feel very good but suddenly a trigger cause the fire everywhere. Who really expect to be trapped in a crashed tunnel without any lights?

    What's the consequence severity? I really don't know and don't mind before. Now I do feel I need to know it as an expert. Formally saying it represents the magnitude of the undesired impact of the hazardous event.

    ***
    Could we know the severity before a catastrophe happen or get to know the probability for this catastrophe? It needs to know how to assess the severity. It should be assessed based on the worst credible scenario by considering conditions specific to the hazardous event before it happens.

    1. Do the catastrophe have conditions at loss of containment? It would damage your portfolio as a whole rather than an individual capital with little percentage to your portfolio?

    2. What does crowd and environment act? What's the sentimental trend, its speed and direction, the crowd head temperature, economies conditions, and the height of the cake in the sky? Are the good time to buy, hold, and sell? Why?

    3. Could the risk be able to contaminate? What probability for the contamination? Where does it start, form the size to crash your portfolio, where it would move toward...?

    4. Is the risk flammable, explosive, or toxic nature for stock market you are in?

    5. What is your capital diversification and what is the average cost for the shares in your portfolio? Could you digest the risk without any damage to your portfolio?

    6. Do you have enough bond type defensive asset to contain the risk or set the limitation of the damage? What's your budget, the cash inflow and outflow for your corners in the market?

    7. Do you have leading warning system to let you recognize the risk in its catastrophe? Any noises in medias, any senses from viable analysis of experts, home-made indication, alarms and so on?

    8. Could you calculate the event escalation that is you have the time to escape before the hazard events cause the crowd stampedes each other? Have you tried to design the escape ways from the cheerful or desperate crowd?

    9. Have you exercised to know the escape routes and mark them clearly and accessible during event.

    10. Have you trained yourself on emergency response plans, hazard
    avoidance, safe area location, etc.

    Of course if you just put little money for your lucks, you could ignore all listed above.
     
  4. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Cracks in your defensive lines

    There are two extreme cases:

    1. no risk at all for what you want
    2. Too risky to lose all without matter how you try.

    Are there people who just enjoy the case 1 or struggle in the case 2? The answer should be no. All of us do something for profit between these two cases. So everyone has the experiences to get some profit and some lessons to lose the money.

    All of us want to get acceptable risks for unlimited profit. In reality most of people get pennies in profit and lose a few unaffordable or unpleasant amount of the capital.

    How could we get profit but have the risks in tight control?

    ***
    Traditionally wise people try to put self-protective mechanism into any buying, holding, and selling, which sometimes can stop some risks for fatal losses but still could not completely stop the risk bring the losses to us.

    Logically the mechanism to make profit is different from that the risks develop and contamination. So it is suggested to use separate layers to supervise, control, and mitigate the consequences of the losses.

    However no any risk supervise, control, mitigation could be perfect. Each layer could has its own cracks and these cracks open the door for risks to spread and damage our core capital. If a man loses the vengeance for the cracks, he works hard to get losses rather than profit.

    ***
    The failure of one layer leads to a challenge on the next layer. Actually to most of retail market players they don't know the layers let alone to enforce the protection layers for their portfolio.

    I never asked any question about protection layers before 2004. I put a protection layer for my buying but never think about how to introduce any protection layers for my selling. Most of time, I was upset or cheerful for what I lost or got. Protection was an exotic and luxury ideas actually to most of retail market player.

    Failure is normal in market, which is not risk itself. However when the consequences of the risks break down all of barriers naturally, we are in the blood and feel hopeless.

    Why do you cry for the tipping off you could image? You have been hurt by the GFC and the crashes in last year.

    ***
    I didn't put enough protection layers over my paper profit before April 2011. When the storm destroyed them, I didn't response properly. I didn't market the routes to escape without damage or with acceptable damage.

    Since I didn't put any necessary layers to protect the paper profit, I was defeated and the paper profit was taken away by Mr. Market ruthlessly. The consequence was very serious. It was the paper profit I could not sustain to lose physiologically and economically.

    It was idiotic. It was crazy. It was a matter very severe but no anyone else I could blame or curse. You should feel painful and you should take lessons after a fatal accident and knowing all were your fault.

    Fortunately I knew I didn't need anything but the last defensive line after the damage has been done.

    [​IMG]

    Could you hold tightly for your defensive line? Could you win back? I really didn't know but I just did what I believed right and I could do then. I were in emergency and failure to protect what I should protect. It was imperative to stop the spreading of damages and let myself calm down!

    ***
    Lessons cannot be got without deep digging for the root cause of the failure. It is impossible to be completed in days or months. It needs the promotion of the mental framework and based on the renewed mind to recheck and find the cause.

    Few understand the difficulty to get the lessons in logic and find some constructive ways to correct the causes and change the behaviors for safe profit generation!
     
    Last edited by a moderator: 11th Mar, 2012
  5. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Seriously saying...

    The risk control and reduction of the consequence severity should be done before we take action to get the profit. It could not be done by a officer who just comes to the office at 8am and leave the office at 4pm and enjoy his own life. I do feel I need to extend my knowledge in safety and fortunately I am working on designing a safety instrumented system for mining.

    So what are the core elements of a risk reduction strategy? What does it focus on?

    It should address inherent safety, preventive measures, and post-incident measures, such as limitation and emergency response measures. Actually if you have read the book, "The Snowball: Warren Buffett and the Business of Life," we should see the imperatives.

    ***
    We need to
    • Gain better understanding of the initiating causes of the hazardous events,
    • Determine whether the identified protective functions are the best approach to reduce the risk of the hazardous event,
    • Reduce the number and complexity of the protective functions, and
    • Identify where a single function is mitigating multiple hazardous events.

    What if we could not get what we want from above actions? Don't do anything until you could protect you from hazardous events for unaffordable losses.

    ***
    Why don't you stop the losses rather than do nothing?

    I don't accept it since its inherent logic faults. I want to stop the profit when it goes too far and would like to risk what I could afford for the profit to grow up! Of course if I want to do so, the buying is extremely important, the quality, not the quality about the business only but the discount to the value of the business.

    I want to get the protective layers to look after my profit and would like to update my mind to do better job for this strategy.

    ***
    Profit to me is the snowball now.

    You have to roll it in the fields where there are plenty of snow, a downward slop but the slopping angle should let you have the time to move the ball away for any risks destroying it, plan and necessary skills to control the rolling speed based on your body and conditions of the slopes.

    You need to find the field to roll it bigger. You need to look after the risks to melt it down. I am interested in snow effects in the profit making process now.

    ***
    [​IMG]

    The critical point is that no going back point.

    I am learning how to stop the rolling before this point and change the field for next rolling after putting some snow into my frizzier if thing out of the control.

    Do I need another frizzier or back up power for the freezer? Yes that is what I am trying to build.

    ***
    Market playing needs buffer or backup. Age is a factor no one should ignore.

    I would hold my line in the stock market, continue to buy the stuffs from sale on fire, ready to lock the profit, pay off the property investment loan, manage the houses by myself for the dependable cash inflow, be full time market student again, and then find the field to roll the snowball proactively.

    Why don't you put Senior Pension into consideration? I don't refuse it but I don't think I could get it with the snowballs which have been in my freezer for quite long time.

    I really don't want it and feel I should get chances more than it could provide.

    ***
    Why do you talk so details? I have read a lot. I need to the chances to digest for a clear goal or focus. I want to get all of illogical matter out of my mind based on the reality.

    Generally saying asset management is a very complicated system issue. We have to do a lot of book keeping or no-safety-relative matters to support our safe profit actions.

    We always hear someone tell us to be businesslike market players.

    ***
    A successful market player for long term needs the business framework and his businesslike mental framework. The mental framework is clearly the base of a good business framework for market playing business.

    It is my job which I would do in dance until I could no do anymore. How to be safe and get the cash income big enough for the job or better to get a lot for donation of poor child education.

    All start at the first step. I am still not ready for the critical first step. That makes me shamed since it means I miss some gift. I could not control it and I only could forget it.

    Each of us has our own living box. It is necessary for us to get out our box and get some views and actions to extend our rooms in the market.
     
    Last edited by a moderator: 11th Mar, 2012
  6. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    least effort pasth and safety

    It is observation that if anyone doesn't understand the risks and urgency to protect themselves in hazard environment or feels that the safety requirement in operations is too complex, he would not follow the operation procedures.

    It is very common, that operating environment, people often tend to follow the path of least resistance. If anyone perceive a difficult path, they may find an easier, though not necessarily correct, or safe one.

    Actually a lot of disasters in market places happen due to people's ignorance rather than stupidity and craziness. To play in the market safely you have to change your mental framework to question yourselves for safety even when everything seems very colorful.

    ***
    1. People-Oriented Errors
    Slips (lapses, omissions, execution errors)
    Capture error(take random as signal)
    Identification error(no idea whom you are)
    Impossible tasks(greedy for unachievable profit)
    Input or misperception errors(take words but don't understand the contexts)
    Lack of knowledge(don't know what you can achieve with what skills)
    Over-motivation or under under-motivation(greedy at peak and depress in ruins)

    ***
    2. Reasoning error
    Task mismatches
    Situation-Oriented Errors
    Environmental
    Stress
    Timing

    ***
    3. System-Oriented Errors
    Errors by others when you lose independence for your safety
    Procedural(fail to get vision, value, price, discount, probability, and affordability analysis, fail to pick up the scenario to balance between risk and profit,...
    Violations

    ***
    4. Human Errors in System Design
    Mistakes
    Specification errors(no clear goal and necessary function definition for risk management)
    Communication breakdown(Reality is replaced by the sentiment of medias. You living in different market from the real market)
    Lack of competency(member of the crowd and chase after cake raised by others)
    Functional errors
    Common errors in risk facility design

    ***
    Generally market needs the mind who have the skills, disciplines, and knowledge to design and practice from top to bottom and then root up to top.

    Few have all to do the required works in all of fields and would like to specified in a few areas for profits. Losing money is common and high pressure and feeling of defeating upset the mind and cause more human errors.

    However it is not just possible but probable for anyone to get profit with affordable risks. It is a procedure to know yourself, the advantage and limitation, what could be allowed by the market, and development of a practical procedure to be sure you are in the area you are the best with the view of top and bottom both.

    The challenge is how to rebuild your mental framework for you to be active, safe, profit driving, and very disciplined with the necessary knowledge.

    ***
    We are too easy to upset since others' view about the market is different from our own one. It usually is because we have a opaque goals for our market playing. You should be sure all of your goals are profits, in short terms or long terms.

    Anything if stop you to get these goals should be stopped. If you really want all of people around you follow your command stick, you should get enough profits and hire a group of people to realize your personal goals. Could you say NO to the job your bosses pay for?

    Team works and goal need the authorization. In business who pay you get the authorization to let you follow in the job scope. You don't pay for what you want to see and no one has the responsibility to follow you!

    To know it, you could save yourself from upsetting. All of us are freelance market players even most of us lose more than what we get.

    ***
    The goal of the market activities is no incidents, no harm to people, and no
    damage to your own asset but accumulate more by using your capital wisely.

    This goal can only be reached by going beyond compliance and establishing safety as a strategic business value. Success requires alignment of yourself, procedures to make the profit, and capital and resources, leading to more efficient and safe profitable performance.

    It is childish to beat anyone else if you just make losses and stop the losses. Don't blame anyone and anything if you could not make profit. You are idiotic in something without matter you admit or not!
     
    Last edited by a moderator: 12th Mar, 2012
  7. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    The culture and you

    It is evident that operating performance is influenced by the culture of the business. When your market business is just about yourself, you mind would define the performance of your market venture.

    What's the culture? It is the leadership, the discipline of you and your people(who get the payments from you not anyone else), thought, and action." What do you think about the risks, safety and how you organize or manege the risks and safety, define whether you would lose your shirts in the market.

    ***
    The safety culture or mental framework is the product of individual and group values, attitudes, competencies, and patterns of behavior that determine the commitment to, and the style and proficiency of, an way how you and your business to make the money, gambling or risking the affordable money for unlimited profit prospects.

    You have to learn and share perceptions of the importance of safety, and by confidence in the efficacy of preventive measures. Do you know the importance of safety and no-harm principle? I have more than 4 times to pay off my debts for my rental properties.

    ***
    I am a risk taker and tend to be greedy and forget I need to pay off the debt first and then I could live based on the rentals, from where I could start for better risk performance and try to double the basis financially. No tree goes to the moon in a day. Could you get a fortune without sufficient protection for what you have got?

    Accumulation of fortune needs the stages, right? Right who could not say it is wrong. How many times we refuse the obvious right but do the wrong things intentionally! Could you punish yourselves if you tend to take unaffordable risks? How to be proactive for the affordable risks and sure profit?

    ***
    We are not in a war with anyone else. It is a personal efforts to make your mental framework govern your behaves. If you could trade safely for a life, why don't do it? If you could not why do you pretend you could?

    Achieving excellence in the market requires that the outcome of the chosen risk reduction strategy meet or exceed expectations in a cost effective manner. Do you know the word, cost? Cost for profit not for anything else! Why do you waste your valuable time to beat my efforts of updating my mental framework?

    ***
    When you google to provoke personally, you set the background for your losing in the market. You do more for this kind of googling, you waste more your valuable emotion in wrong matters. When you keep to do the wrong things desperately what could you get in the market?

    An organization's culture or person's behave is ultimately driven by what management or he indicates is important; what is measured; and what is rewarded. Safe operation can only be sustained where it is recognized that the direct costs of an incident represent the tip of an iceberg.

    ***
    A decade passed by since IT booming.

    Could you wake up for your risk management and profit in the market? Don't take my words as personal provoking. I am not interested in it any more.

    Could you waste another decade for the useless and cheap feeling? I am shamed I wasted a decade in the stock market. Do you feel so? How could you correct your mistakes based on your losing experiences?

    Ends are related to means, intentions to capabilities, and objectives to resources. Don't forget your time and emotion are your valuable resources. What are they used for in the market?
     
    Last edited by a moderator: 12th Mar, 2012
  8. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    We all want the fortune now if possible but don't give the concern about its improbable feature. Fortune comes from lucks and management.

    If you dream to have the fortune, you could not give up your efforts but if your efforts could not contribute to a well designed mental framework, you could not manage your money as you roll the snowball successfully.

    ***
    Balancing safety and profitable goals can be a tenuous, delicate and complex act. It is undeniable that safety and profitable need compatible. It is indisputable that efforts in safety yield long-term benefits.

    However, these benefits are not as obvious nor do they produce the rapid results associated with the successful risk taking even the risks are high consequent and out of our capability to deal with.

    ***
    Most of us have no mental framework for safety and protection. Some even have a decade losing experience are still like the quick money and never prepare for things out of their control.

    Safety and protection are not cost free. Thinking about the reason why I refused to lock the big enough paper profit, I have to admit I was fearful and greedy.

    ***
    I was greedy since I really know when a dirty fish starts its shooting up it also starts the prepare energy to drop down by economic gravity. I was fearful since I really worry about I could miss the train and it leaves away without me. Future could not predictable.

    Some rules to get the enough profit into your vault have to follow. How many of $400,000 paper profit we could get which means 400 times return.

    It is very difficult you are not greedy and fearful in the market if we don't have the right mental framework. How to hold big enough profit and restart again, which is not a technical issue but those about your self-compatibilities and behaviors for a preset, achievable, and safe profits.

    ***
    Safe operations are always those which short the profit.

    It usually sell before the crowd cheers for the cakes in the sky, after the sale the price continues its upward trend, the seller with good profit just feels the train leaves without them.

    They feel they have made mistakes rather than cheerful for their profits. The safety could not let them happy and don't accept it is the cost for safety.

    ***
    Contradictorily the increased paper profit are real number. It could be numbered and touched on the screen. It gives feeling which is a high certainty of the money, could be measurable, positive effect to our feeling within a short time frame.

    We tend to extend the profit based on the pattern we could see. However most of time what we got was returned back to the market.

    We just don't want to believe it could be dirty again! Since we believe on the numbers but not the safety of the achievable profit goal for long term, we have to learn stop losses rather stop the profit.
     
    Last edited by a moderator: 12th Mar, 2012
  9. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Tangible and intangible benefits

    For protection and safety, many of the benefits are less tangible. When
    successful, the safety action can be blamed for its stop of your profit and let you lose the chance; when it fails, it is blamed for the incident.

    We want to be safe but we never give enough credit for them and admire the protective mechanism could help us to avoid into the hell; we don't admit they could help us to avoid unaffordable risks. We are not happy to lose the chances for more paper profit even it helps us to avoid the potential fatalities, injuries, crying in the ruins. When you could not give the safety enough credibility for your long term profit, you would not care about safety.

    We are all hungry for money. It puts pressure on us in a variety of forms, such as unsustainable profit forecasts, budget to let cost run and having not cash buffer for bad times. In the absence of a strong safety mental framework, we use the patterns in days to let our dream fly.

    ***
    Risk assessment can become skewed with credible safety target and concerns being dismissed without appropriate consideration.

    Erroneous assumptions concerning the chances and procedure robustness lead to complacency in the booming market. We like to accept the increased risk to lose the hard-to-get-again paper profit.

    Often, this is done in the absence of vision, gut, disciplines, analytical, and rigorous risk analysis and breakdown of logic and wisdom.

    ***
    Good market practices should be applied in preventing incidents.

    Periodic analysis on your mental safety mechanism should be conducted to determine if you could make enough preset profit in a safe manner. You have to get a benchmark to be sure your mental framework have stronger and stronger protection mechanism.

    You need to stop the profit which if you lose you would be very painful.

    ***
    Have you asked the question: why have you lost your shirts again without getting any lessons?

    Most of market players have no memory and accidents recur. Have you lost your shirts in IT bust? Have you lost your shirts in GFC? Have you lost your shirts in the last year? incidents occurs and is repeated.

    Why do you have poor memory? It is because

    1. you never think enough or do very little or insufficient failure investigation,
    2. you have inadequate communication with the people who have done great works to investigate the reasons about why genius fell down to the hell
    3. you are lack of information, knowledge, and skills to prevent your shirts losing

    A safety culture or mental framework does not rely on your profit or losses. It understands that the potential for incidents is an inherent part of your mental framework or culture.

    If we don't put effort for safety mental framework, incidents invariably occur and your shirts invariably are lost.

    ***
    Be sure you understand it is always hard to get money. Be sure effortless huge money is belong to the extremely lucky people only. Be sure you know it is hard to update your mind, which means blood and cell change of your bodies if you unfortunately don't have the safety gift inherently from some people and somewhere.

    Please also notice that mental framework updating is not a pleasant matters until you could go long enough. It could be the most painful part of the continuous
    improvement of your mind. It tends to shed light on the shortfalls and inadequacies of
    your mind as a whole. You could find you are much less wise than you believe and assume.

    ***
    However some in the market would take the safety and protective philosophy and try to fill out the gap which result in out of alignment with aspects of various good market practices.

    When unacceptable risk is identified, an action plan should be established with
    short-term and long-term measures sufficient to reduce the risk below your risk criteria. Efforts to improve safety and reliability yield long-term economic returns.

    If you work hard and could get what you want, your work is not hard.
     
    Last edited by a moderator: 13th Mar, 2012
  10. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Fail safe and protection layers

    Do you know the following basic facts?

    1. You have to make profit from your portfolio even some individual shares could result in affordable losses.
    2. You have no chances to be sure that all of your shares would make profit without risk to lose.
    3. You can make a reasonable profit from your portfolio.
    4. You could not exert any control and influence on a qualified business if your portfolio's capital is not big enough.
    5. You can only use your mental framework for proper behavior for a balance of operations between chances and risks

    ***
    You have to let your portfolio has the capability to take the risks and then chances for your profit goal.

    1. This capability has its fail-safe mechanism and ideally its profit capability should be protected with the buffers.
    2. These buffers would provide different protection layers and these layers should not fail at the same time unless the sky falls down onto ground.
    3. You have to know failure of your portfolio would be possible but should be improbable due to your highly protective mental framework now and highly protective organization.
    4. You should train yourselves for the possible organization with its value, vision, and goals under your leadership and constructive safety mechanism.

    You could fail to expand your wings and fly at your will but you should not stop to practice from top to the bottom and upward to the top, which will sharpen your mind and realize what you could realize.

    ***
    Don't worry it is too late for your concept design in the market. Never too old to do what you enjoy to do. It is fortune itself if you enjoy what you do.

    If you could sharpen your mind and get your hands ready, you just need a luck lock for your key. You and all of people else don't know otherwise the life game would be too bored. You are the key to open the lock for your fortune if the fortune belongs to you.

    Trust yourselves and don't question anyone's capability and resolution for the keys for their locks. Learn to give your best wishes for the people who want to get their keys and locks.

    Don't lower yourselves to blame or provoke anyone who dare to get his own key and lock. If you do so always, you would let people feel shamed to talk with you since you don't know the life and its logic.

    ***
    Have you seen the ideal protection layers before?
    [​IMG]

    Protection layers is to protect yourself while you look for the best return for your capital. Have you read "the art of war" before?

    A protection layer is a physical entity supported by your mental framework, which is capable of preventing a hazardous event from propagating into an undesired consequence.

    Do you know how they start from the inside and work outward, each or which builds on the next? The order of presentation also indicates the typical order of protection layer deployment as part of a risk reduction strategy.

    What's your inherently safer design? To me it is what you buy and how you buy so that the margin of safety get the inherent safety for your portfolio! If you could not buy for a safe profit, you would lose without matter you stop or not stop your losses.
     
    Last edited by a moderator: 13th Mar, 2012
  11. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Fail safe and protection layers

    The inherently safer layer is the most important, as it reduces or eliminates the inherent risk. When you are still in your concept design stage, this is what you should focus on. If you buy you have have confidence that you would get profit, such as 80% chance to get the profit. It will make you free to be a gambler!

    The next five protection layers act to control hazards and risks that could not be eliminated sine the limitation of your mental framework and the market environment.

    ***
    1. The control, supervisory, and preventive layers reduce the hazardous event frequency by taking action to achieve or maintain a safe state.
    2. Conversely, the barrier and mitigating layers are designed to minimize the consequence severity resulting from the hazardous event caused by system crash and your human errors.
    3. The barrier and mitigative layers generally result in secondary or residual consequences, which may or may not be acceptable.
    3.1> Stopping losses coudl find its position here.
    3.2> In some instances, the secondary consequence must be addressed using other protection layers. What if the damage has done?
    4. The limitation and emergency response layers take action after hazardous
    event occurrence. These layers are intended to reduce the consequence severity of the hazardous event, but their effectiveness in doing so is unknown.
    5. The emergency response layer musters response when the crash is impending.

    ***
    Protection layers must be independent when they are designed and managed to the rigor necessary to achieve the core attributes of your behaviors:

    1. independence,
    2. functionality,
    3. integrity,
    4. reliability,
    5. auditability,

    These layers can be viewed as "lines of defense" against hazardous events, while the core attributes establish the performance metrics. The independence of the protection layers from the initiating cause(s) and from other layers is very important.

    ***
    In the long run view, you need to develop the procedure to get all of layers ready for your portfolio. What's the businesslike market playing? If we could have the layers and let them look after our portfolio, we would have the chances to build the market castle for our future and realize our personal legend!

    Don't hand our heads to Mr Market and let it trade them in!
     
  12. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Inherent safe of your portfolio

    It is a concept and could be realized in market if we want and our mental framework good enough. Inherently safe comes from some very basic principles:

    1. Minimize: risk must has it limitation. The limitation is affordable losses of your capital or profit
    2. Substitute: not all of shares are safe. Some would be safe inherently at a given price and time. You can choose for the inherent safety.
    3. Moderate: Time, contexts, and construction of your portfolio can make the losses affordable
    4. Simplify: a simple buying with big enough real margin of safety make the portfolio management simple.

    ***
    Simplicity is beauty.

    If you could have a simple, logic, vital strategic holding, your portfolio would require little efforts to burn on the fire and human errors are less likely to destroy your capital and profit.

    You portfolio would be more tolerant to the wrong holding and selling if it is a simple and profitable buying. Logic is simple but hard to know enough with the real contexts and conditions.

    ***
    Anything would change when its environment changes. The use of a protection layer in lieu of inherently safer core are resulted in specified market environments.

    Given the wide range of random failures and systematic errors, it is not " if a protection layer will fail, but "when it will fail" and "what is the consequence of its failure." It is true to the inherent safe core too.

    Inherently safe core is most cost effective when applied to any buying, holding, and selling. The opportunities for inherently safe core diminish as market and economies move forward.

    Any risk gaps (i.e., differences between real risk and risk criteria) found during any time are more likely to happen when market sentiment is at its extremes.
     
  13. voigtstr

    voigtstr Well-Known Member

    Joined:
    24th Jan, 2007
    Posts:
    679
    Location:
    Hobart
    Is 11 replies by you, to your own thread, a new record?
     
  14. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Learn to write for our own wisdom and intelligence and others who have the open minds and like to see different views. Ah! you should have no chances to read what I post, shouldn't you? Where is your ignored list? Haha!

    Don't mind what I post but make profit for yourself. Our forum would be great if we all say what we believe are wise and act in the market in fail-safe mode. Human always makes human error. Let time tell all of us are the best even we are different to see a lot of matters.

    1. Write your posts for your self-interests only even we expect to share the wisdom and intelligence.
    2. Self-reliance means you are your own leader and wisdom and intelligence only could be got with digested ideas from someone else and yourselves.
    3. Cheer for your own wise ideas and correct your own biases by giving out what you thought.
    4. It is what market wants us to do and if we don't do so we would be losers.
    5. Losers have not right to say anything in the market.

    I read your posts and ponder what's right or wrong for myself and give my points for triggering great ideas in you and me, which is all I could do. If I want to do any more, I am idiotic since it would hurt all of us economically. Of course if you would like to pay I could follow what you say.

    You have to face yourself in the market and only you could decide whom you are. If you are the winner in your life, I am happy for you. If you are the losers in the market, it is you to make you be the losers.

    Good luck!
     
    Last edited by a moderator: 14th Mar, 2012