Your Almost Daily Bit of Wall Street Wit & Wisdom

Evil queen

h/t Disney

“That monitor is not your friend.  It’s basically a mirror, looking at all the psychological imperfections it can find in you…it makes you want to do overtrading…you act on impulse, it leads to errors, it leads to exhaustion, and the worst thing that happens is it leads to frustration.  And the frustration is where it starts tearing at the old trader’s soul.  Try to plan the trades that you really want to do.”
— Larry Pesavento

Don’t stare at the market.

Don’t act on impulse.

Don’t overbuy a position.

Don’t add to a losing trade.

Don’t overtrade.

Plan your trade.

Know what you’ll do if you’re wrong.

Know what you’ll do if you’re right.

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Happy Friday and enjoy your weekend!

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

“Most people don’t want the truth. They want a secret. So if that’s what you want, I’ll give you the only secret you will ever need—there are no secrets.”
— Nick Maggiulli, @dollarsanddata

There is no holy grail for traders, but there are great tools to help you.  With knowledge, courage, discipline, and hard work you can put probability on your side.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

“I’ve always felt ideas were a dime a dozen.  If you had one that didn’t work out, you should not fight too hard to save it, just go find another.”
— Daniel Kahneman

That can be applied to trading.  Examine your decision-making process.

As a general rule, never add to a losing position.  Hone your money management survival skills, so that inevitable losing trades don’t knock you out.  You want to be there to reap the benefits of your big winners.

After all, there’s always opportunity in options.

Best regards,

Steve

PS Check out Michael Lewis’ The Undoing Project, about groundbreaking psychologists Kahneman and Tversky.