111 Learnings from the Stock Market

Posted in Learning lessons from the Stock Market - 14 March 2011 - No comment

Inspirations, to be a successful trader / investor.

Control what you can, Manage – what you cannot control.
Take the action, what you have decided. Don’t change your mind. Be disciplined.
Trade what you see, not what you want to see.
The market will do what it will do. Just follow price and don’t worry what any one has to say.
Fear and hope drives the market.
Nothing new ever occurs in the market.
Follow the trend.
When the ship starts to sink, don’t pray – jump.
Personal views on the economy should not influence my trading decisions.
It is better to be more interested in the market’s reaction to new information than in the piece of news itself.
I learned not to take other’s opinion and view but, to trade my own view.
Big movements takes time to develop.
The chartists are astrologers of the stock markets.
Leader stock of today, May not be the leader of tomorrow.
Never buy a stock, Only to obtain dividend.
Never permit speculative trade to turn into investments.
Split your profits right down the middle and never risk more than 50% of them again in the market.
If everyone is worried about the same thing, it is most likely already priced into the stock.
A hold is as good as buy.
Never get emotional attached to stock.
Prices will do what they do, and it’s our job as traders not to predict anything – but to react accordingly.
Don’t listen to the news. The market doesn’t care what you or anyone else thinks.
Never add to a losing position.
Time spent on research is more valuable than time spent watching the market while it is open.
It’s important to know when to ignore the “noise” of fundamental data that does not support the prevailing trend.
Plan your trades. Trade your plan.
Money can not be made everyday from the market.
Use the stop lose as a weapon to minimize loss and protect the capital in stock market.
The market is always right.
The market is a master, neither you nor the experts.
Turn off the external influencers – analysts and pundits claiming to know tops, bottoms, and directions.
Thinking is more important than knowing.
I finally realized and accepted that trading is a probability game.
Trading without a carefully constructed plan is means of losing money.
Markets are not casino, where you throw a quarter and expect luckily to get rich, trading is a business and as a business you need to have a plan and follow it.
Stick to your trading plan – know your rules and follow them or quit the market for long time.
Successful “systems” can break down and watch out when they do.
To avoid intervention of others opinion, traders should not disclose their own position in the market before position is closed.
To be true to yourself and not trade with other peoples methods. That I have to discover my own methods of trading system.
Test new ideas and strategies before implementing them with real money. Once they are tested in real-time, start small and only add capital to successful strategies.
Money management is the most important factor in success. Do not take big positions over capacity.
Cut losses and admit defeat when appropriate.
Know my plan before making any trade and where I’m going to exit in case I am wrong.
Trade execution and risk management are far more important to success than finding the best stocks.
Risk and reward must be evaluated before every trade.
Lost opportunities are easier to make up than lost capital.
For every trade, you must have a plan B.
Markets can be irrational longer than you can remain solvent.
Markets are rarely rational or logical. Emotion, perception and liquidity rules the market.
Be greedy when others are fearful.
To think more like a market maker.
Buy the dips in up trending markets.
Sell on the tops in down trending markets.
Gut wrenching times are often most profitable times to invest.
Success comes with patience.
Buying pull-backs on up-trending stocks worked better than chasing breakouts.
Forced trades are usually loser trades.
There is no investment rule that always work.
The best investment is one you did not make.
Invest in yourself.
Gains that accumulate over time can be taken away in a moment.
When in doubt, knock it out.
Revenge trading is a great way to lose lots of money.
Successful traders buy into bad news and sell into good news.
Successful traders are not afraid to buy high and sell low.
Do not buy the stock, Because it is low priced.
Remember that a bear market will give back in one month what a bull market has taken three months to build.
Capital preservation always trumps capital accumulation.
To protect investment principle and reduce risk, keep losses as small as possible and try to make big profits.
If you don’t control fear, you’ll miss opportunities.
Resist the urge to get too cautious just because markets are strong.
When investing in a theme, eliminate the non-performing positions and increase the investment in those that are. Get out when the theme seems to be falling out of favour.
To trade successfully, you must be comfortable taking risks.
Good trading and investing is all about risk management, not prediction.
Understand the mental accounting for your money.
Understanding that there are different cycles in the market.
You must be adaptive in order to be successful as a trader.
It is better to enter a number of small positions than going “all in” at one time.
Proper position sizing can make the difference between profits and losses, usually trading less can make more money.
The bad news for the economy (share market) is good news for interest rates.
Any known forthcoming news has been discounted by the market.
If a market doesn’t do what you think it should do, get out.
Learn to trade both sides of the tape. Be able to comfortably go short as much as you go long.
Remember that a bear market will give back in one month what a bull market has taken three months to build.
How helpful it is to use correlation among various markets as an indicator.
Investment and trading are increasing simultaneously.
Crisis situation in stock market always provide an opportunity.
Stochastic / RSI can be useful to spot timely entry points which offer attractive risk / reward set-up.
Learning to draw and use “trading channels” has been proved very useful.
Keep it simple as possible, I’ve learned about not using too many indicators.
I learned not to get sucked up in the day-to-day churn of news and opinion.
I learned that I am my worst enemy when it comes to trading.
To reduce the amount of capital I risk on each trade.
It is best to enter and exit the share market at the right times instead of staying invested all the time.
Diversify your capital in different assets and also divide your trading capital in different stocks.
Never over-trade.
Do not follow the crowd, they are always wrong.
Remember, Bear market have no support and Bull market have no resistance.
Asset allocation is more important than individual stock picks.
You must find what you like to trade the most, like stocks, commodity, futures and which time frame best describes your trading style and accommodates your life style.
Learning how to play poker has helped me become a better trader
I am not as good as I thought about me.
I am not ready to trade for myself. I would not hire myself to manage my own assets right now and need more practice. This is an ego blow to myself, but I have to put my ego aside.
It seems to get more difficult with the more I know.
How important it is to keep a trading journal.
Don’t take the market home.
Don’t be lazy about record keeping.
The more time and dedication I put the more successful I am.
The market is controlled by few to the disadvantage of many.
Lose your opinion – not your money.
learn the difference between betting and investing.

A person must not only look at the market when ever they feel like it, a part-time trader, or making trading just a hobby, or have an excitement trading with market, if a person is interested in making money from the stock market. Trader / investor have to keep on learning. Learning never stops. The more you learn the better investor / trader you become.