Monday 16 January 2012

'Dissipating money'. The chaotic systems dissipating energy to microscales applies to markets.

markets .. traders .. making money .. detached from people's achievements ..

Five Fatal Flaws of Trading You Must Know

"If you don’t have a defined trading methodology, then you don’t have a way to know what constitutes a buy or sell signal. Moreover, you can’t even consistently correctly identify the trend."

..defined trading methodology .. what constitutes a buy or sell signal ..

buy or sell signals .. from the whole .. a whole world of events ..taking place .. isolate ..some signals .. detached .. completely

".. whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above."

nothing to do .. with what triggers .. kicks .. and goes on .. in that world called markets .. it could have being anything .. apart from trading equities or anything traded .. never involved .. always outside .. outsiders ..

"So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously."

..lack of discipline .. follow it religiously ..

"Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations."

... the financial industry .. misnomer .. if ever .. uneducated investors .. how can they be called investors .. what does it mean to invest .. you do not invest .. apart from the so many times derogatory being termed .. gamblers .. the term invest is connected with .. creating something .. help to create .. a service or a product .. the so-called ..investors totally detached with that process ..

"In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them — and achieve them — you will fend off the Hand."

.. the Hand ..

... shoot for a 0% return your first year .. in year two, try to beat the Dow or the S&P .. may not be flashy but they are realistic .. you will fend off the Hand ..

"Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit — and more importantly, do it consistently."

.. ninety percent of all traders lose money ..

"It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds."

.. that invisible hand from depleting your trading account funds ..

"I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction."

.. markets trend only 20% of the time .. the other 80% of the time the markets are not trending in one clear direction ..

"That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you’re a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week."

.. only two or three compelling tradable moves in a market during any given year .. there are only two or three high-quality trade setups in a given week ..

"All too often, because trading is inherently exciting (and anything involving money usually is exciting), it’s easy to feel like you’re missing the party if you don’t trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade."

.. because trading is inherently exciting (and anything involving money usually is exciting) .. is that .. what remains . from the traders .. nothing else moves them .. to what extent .. do they intervene .. in the affairs of the markets .. is their ..intervention .. contribution .. negligible ..

though ..negligible ..regardless of whether they are or not .. still .. do they provide .. the so-called .. edgy fingers .. what makes the markets .. volatile .. unpredictable .. nervous ..

"How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don’t worry about missing an opportunity today, because there will be another one tomorrow, next week and next month…I promise."

.. lack of patience .. missing an opportunity today .. what triggers .. edgy fingers .. nervous markets ..

"Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% – 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50 – $150 on any given trade."

.. the big boys (i.e., the professional traders) .. limit their risk on any given position to 1% – 3% of their portfolio .. for every $5,000 .. risk only $50 – $150 .. on any given trade .. risk, is taken as .. for any given trade .. investing .. all their trades .. taken as risk ..

"Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn’t even address the size that they trade (i.e., multiple contracts)."

.. under-funded .. the size of their trade .. their impact .. negligible .. for any nervousness .. attributed .. to markets .. afforded .. it requires a massive input .. in the market .. something that only the big boys ..can put ..afford .. so the swing would be noticeable .. so other traders can pick out .. and augment ..

energy dissipating to the micro-scales .. money funnelled to ..traders

traders absorbed by the system .. their presence, not chaotic .. non-dissipating(?) .. chaos ..dissipates energy .. because there is chaos .. the butterfly wing-flap .. corridors .. flows of energy .. massive flows of energy .. energy in markets ..equated with money .. money gained or lost ..

..energy ..dissipating to the ..microscales .. the ..traders .. representing the ..microscales .. where the .. big boys funds are dissipating to .. their efforts .. and the advice given in this post .. just what is needed for these traders to .. incorporate into the system .. to adjust to the system .. to make the appropriate funnels .. to become the microscales .. to tap into the system .. to which the energy is dissipated ..

..would the collapse of the big boys .. Merrill-Lynch .. and others .. can be explained in that manner .. or even the sovereign debts .. now-a-days .. and if so, that makes you wander .. what is their size .. how many of them .. are there .. would their increase, with the advent of internet, the enablement by technology .. has anything to do .. with the size ..of the money lost .. by any of the big boys .. or from the sovereigns ..

.. the continuing trouble in the markets .. an indication that their numbers .. augment ..

the big boys .. aversion to risk ..

.. the caution mentioned .. the 1% to 3% of their portfolio .. of the big boys .. do not affect the markets .. even for the big boys size of accounts .. so .. in a sense ..or essence .. risk is removed .. they create trades .. trends .. that are sure things .. without risks .. they create the conditions so they can put sizeable funds to gain .. secure returns .. and certainly they will do that in a concerted way .. more recent .. the situation with Nigeria .. and the price of oil .. unrest in Nigeria .. oil producing country .. a recipe .. for a surge in hiking prices ..

and what can not .. or better .. why wait .. total or towards total eclipse of chance .. defined or/and described as a tendency ..

..instead of waiting for things to happen .. why not .. make them happen .. a little nudge here and there .. and there you have it .. an unrest out of the blue .. teams .. in volatile areas .. creating trouble .. markets-induced upheavals .. the big boys instigated by .. something that ..traditionally was the job for the US army .. creating wars .. out of nowhere ..

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