Category Archives: System

What remains …

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… is the tough stuff. 

You’ve taken care of the easy stuff. 

It’s been taken to its logical conclusion. 

It’s either flowing with you in the background, enhancing you, or it’s been put permanently to rest by you, in a form that will also always add to you. 

You don’t notice it anymore. 

It was easy, right!?

Easy stuff doesn’t push you to the wall. 

It gives pleasure. 

One gets used to pleasure. 

After a while, one doesn’t notice the source anymore. At least, one doesn’t notice it too consciously. 

Situation is different with the hard stuff. 

It’s hard, as in difficult. 

It pains you. 

It pushes you to the wall. 

You are challenged.

You don’t forget something that challenges you. 

This something remains with you, before your eyes, all the time. 

You are trying to find a solution. 

Your system is working overtime to convert this hard stuff into easy stuff. 

For some hard stuff, you find the conversion. 

Taken care of…

…and gone. 

Other stuff refuses to convert. 

Yes. 

You have it here in a nutshell. 

What is this folder made of?

Folder?

Yeah, folder. 

What folder?

The folder containing the hard stuff that refuses to convert into easy stuff. 

Oh, that folder, right. 

Yeah, what does that folder contain?

Hard stuff that refuses to convert into easy stuff?

Yeah but in other and more understandable words now…?

The biggest tests in your life?

YES. 

Leading to the biggest lessons learnt if by chance you are able to push out even one hard-folder-component into the easy-stuff-folder?

Exactement.

Le Kicque

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There’s probably no such word in the French language. 

Well, then, I just made it up. 

Why?

Meaning, why in the world would I concoct a French word, and that too something like le kicque?

The fact that I’m learning French plays a role. 

So does the constant questioning. 

I constantly question myself at every stage. 

Things come to a point, where I find myself asking the question : “Does this still give you le kicque?”

Or, “is this new activity giving you le kicque?”

Fine, then do it. 

If it’s not giving you a kick, don’t do it. 

Every formal thing is perhaps wrong about le kicque. 

It probably should have been la kicque. 

However, informally speaking, la kicque doesn’t feel or sound right to my mind. 

La kicque doesn’t suit my mind’s style and the way it wants to use le kicque. 

The full effect of the French accent is felt by my mind with le kicque.

When it’s putting the question forward, mind goes all French with intonation and accent. 

The question has full impact. 

I have to answer. 

Yes?

Do it. 

No?

Don’t. 

I’ve come to a stage where I find myself only pursuing activities which give me le kicque.

If I’m doing anything else, which does’t give me “the kick”, it’s because I have to do it and have no choice in the matter. 

If I find some optional activity which isn’t loaded with le kicque, I drop it immediately. 

Am I embarrassed that I’ve concocted an idiotic-sounding-grammatically-all wrong-word that would probably insult the French purists?

No. 

Why?

Because its not about the French. 

It’s about me. 

It’s about how I handle myself. 

It’s about guiding oneself through a yet undefined path. It’s about defining one’s path. 

Along the way, one builds bridges. 

Le kicque is one such bridge I’ve built for myself. 

I’m not ashamed of my bridge.

Nor am I embarrassed about it. 

I love my bridge. 

I share my bridge here so that it might help another person. 

If this bridge even helps one more person, the purpose of writing this piece will fulfil itself. 

The Next Step Rumination

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This happens to me. 

Often.

Most of the time, I don’t know the answer. 

So, what is it that happens?

This question pops up : “What is the next step?”

When does it pop up?

When a preceding step has come to its logical conclusion. 

Step, by step, remember? That’s how you build your castle.

Ok, how do I react?

It’s a very normal question by now. 

It’s popped up thousands of times. 

I’ve gotten used to it. 

I think hard. 

Is something coming?

No?

I let it go and delve into some recreational activity. 

Am learning French nowadays, btw. Am blown over by the availability of learning materials. 

Is something coming?

Yes?

What is coming?

Does it sound logical?

Meaning, is it the next logical step?

I think hard. 

And again. 

Till I either discard the idea, or…

… till I take this new next and logical step. 

That is how the cookie crumbles. 

This happens to you too. 

If not, you are missing a trick. 

If so, have you recognised and acknowledged the phenomenon?

Do you have a response?

Yes?

Great.

No?

Perhaps my own response to the phenomenon can give you a hint or two.

Small Shoots to Big Trees

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What do I see around myself?

Lots of small shoots. 

Wherever I look, there are small shoots. 

Does this make me happy?

You bet. 

Why?

Why not?

I mean, you don’t see any trees. 

So?

You’ve been at it for a while.

So?

All you’re seeing is shoots. Does that satisfy you? None of your efforts is a big tree in all this while.

That’s a very narrow-minded, greedy and fast-buck remark. 

Explain. 

For each of the shoots I see around me, twenty efforts have died their death. However, one shoot managed to entrench itself. This one shoot is firm, and goes very deep into the ground. It’s roots have become very strong. It is now ready for the world and has decided to show itself over the ground.  Over the next many, many years, with my meticulous nurturing, this very shoot shall grow up into a mammoth tree with unprecedented positive consequences.

I see. And, you’re saying that you see many such shoots around yourself?

Yes, many many.

Wow.

Yeah, i’ve been busy. I’ve tried and discarded many things. What remained didn’t want to leave me. It got planted and grew roots. Now that the shoots are growing, they are mostly on auto-pilot. Some need tending to once a day, some once a week.

Does that give you empty spaces in between?

Yes.

How do you fill these empty spaces?

I do, and I don’t.

Meaning?

Unless something new refuses to leave me, I don’t wish to plant another tree.

Why?

I’m happy enough tending to what I have.

So you’ve reached the…what’s that called?

Sweet spot?

Yes, you’ve reached the sweet spot. But nobody knows about you. You’re not famous or anything.

That’s why the spot is sweet.

Meaning?

Nobody disturbs my privacy. I can go where I choose. Do what I want. I don’t need to share my time with anyone if I don’t want to. There are no compulsions imposed upon me. 

Do you think you will be famous one day?

When these shoots grow into big trees, that might happen.

Do you want it to happen?

I want my trees to grow. Not sure today about fame. It kills personal life. I like my life and its pace.

Any regrets?

Sometimes, I get lonely. It’s the nature of the path. Despite family and a decent social life, loneliness is still there. Applied finance requires a lot of alone-time. 

How do you deal with that?

I start tending to a different shoot. Financial. Non-financial. Recreational. Creative. Gap gets bridged, and then the loneliness is gone. 

Fancy schmanzy or just plain Vanilla?

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There’s expenditure and there’s expenditure.

Meaning?

Let’s say you start some work. It can be market-related, for all I care. What do you do first?

Prep.

How do you prep?

Studying up. As long as I can manage.

And then?

Courses, workshops, the deal.

Local?

Naehhh. I try to keep it national though.

International?

Haven’t required it till now for market work.

Ok. What happens next?

I hit the market concerned. Low-key at first. 

Why?

That’s when you make the most mistakes. That’s why. 

I see. Motive?

I want to learn from my mistakes and not repeat them.

Rather than from an instructor?

Of course. This is the market, remember. This is about you. Not about the instructor. This is about knowing your own shortcomings related to a particular market, and about adjusting and fine-tuning yourself to the market to trade it optimally. This is about fitting the market concerned in a tailor-made fashion into your own life without disrupting your own life. 

Wow! Well, then, congratulations. You’re a prime candidate for doing it the plain vanilla way. 

Is there any other way to do it?

Oh, there’s the fancy schmanzy one. 

Kindly describe it. 

Well, it mostly entails unnecessary expenditure along with necessary expenditure. There’s more unnecessary expenditure though. 

I see. 

One is normally too lazy to study up. Or, one doesn’t have the get-go in oneself to approach the subject on one’s own. 

Sure, can happen. 

One flips from instructor to instructor in search of the holy grail. Expensive software, international trips, five-star hotels, the whole shebang. In the end one has spent a bomb. To end up trading the instructor’s perspective. Finally realising that the markets are about oneself, and unless one is trading one’s own perspective, one is sure to lose. Or not realising this (!) and continuing to flip instructors and instructions. Finally burning out and giving up on the markets. 

Sad though. All necessary software is available free of cost on the internet. One can do inexpensive internet courses to widen one’s horizon. These can involve one-on-one instruction too. Video-conferencing. File sharing. Threads. Assessments. The works. Live-market training. You name it. All travelling and extra expenses cut out. Few hundred dollars for the whole course. 

I already acknowledged your plain vanilla acumen. I’m just trying to tell you that most others prefer the fancy schmanzy way. 

I prefer to stay in the market and not burn out. I’m in the market to make a steady income. 

Well, that you will, my dear friend. The plain vanilla way doesn’t promise any hype, but it does promise income. 

Happening…or not happening?

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Is that the question?

Hmmmm. 

Valid question. 

On any particular day, we are confronted with this question. Multiple times. 

Life itself throws this question at us often, at pivot-points or crossroads. 

Well, why should the markets be left behind? You guessed it. They portray this behaviour…also. 

Take the cmp of an underlying. 

Is it crossing resistance? Breaking support? Forming a pivot? Peaking? Bottoming? What have you. 

Is whatever’s happening happening or not happening?

What do you do?

Aha. Got you there. Who said anything about doing something? The question about doing something is a wrong question. 

However, it becomes a practical question, because, well, who has patience today?

Yeah, who’s willing to wait and watch, right?

So, in all practicality, what do you do?

First you try not to ask the question. You just observe. 

Then you get jumpy, and do ask the question, simultaneously answering it by telling yourself to wait and watch. 

Next you’re seen egging the markets on for an outcome. 

That’s not good. 

Markets are not going to behave as per your wishes. 

Ok, so here’s the game-changer. 

Change your activity. 

Yes, do something else. 

Put your system on auto-pilot, and engage your mind elsewhere. 

Like I’m writing this article here. 

What’s happening in the backdrop?

My USDINR trade is going nowhere. 

Couldn’t catch a decent portion of the move on the GBP breakout, and now I can’t seem to get a new trade triggered.

My stock-screener refuses to find me a stock in the agri-sector which is to my liking.

My iPad’s gone all wonky and is acting pricy about photo and music syncs. 

Family-health-insurance-premium due…

… got to get that nomination going on my demat…

… AC gas leak…

… document sorting overdue…

… and so on and so forth. 

Meanwhile, I write this article. 

I’m at peace. Writing relaxes me. It benefits the reader too. It’ll live on after me. It is positivity in action. It gives me a sense of purpose. I forget about all the things that are happening and / or not happening. 

That’s what you are going to do. You are going to find an activity that takes you away, to another plane, for just a while, while your other stuff is still undecided. 

There are some things, though, that one needs to make happen. Sometimes one needs to keep pushing. Non-pursuance would be like giving up. 

In this event, you keep banging your head against a wall. 

Two things are going to happen. 

Either you are going to get hurt and back off…

… or, the wall is going to break down.

Yes, I do admit, that there are some very select areas in life that where one decides to bang full-on. 

We’re not afraid. When push comes to shove, we’re all there and ready for some head-banging. 

However, wrt all the other not-so-drastic things, we’re conserving our energies and going to our happy-and-safe-place till these not-so-drastic things are yet undecided. 

Yeah, we’re happier and healthier that way. 

Going for the Jugular

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It’s time.

Why…is it time?

And, time for what?

It’s time to go for the jugular.

Meaning?

There comes a time, when, after working hard, struggling, doing the whole jig, the rigmarole, you achieve your basics. 

Well done. Pat on your back. 

Then you secure these basics. 

Forever. 

If you can. 

Wonderful. More pats.

Worry factor is now out of the equation. 

Your family is secure. 

Food, safety, education, all basics intact.

Fantastic. You deserve an award. Not that anyone’s going to give you one. Frankly, nobody could care less. Never mind. You know in your mind that you’ve achieved a milestone, and that’s enough for you. 

Whats the next step…

…for you?

Jugular. 

What is this jugular?

Multiplier.

X-factor.

Call it what you will.

What does this mysterious thing do?

Better question is, what is it capable of?

You’re looking to multiply your networth. 

Isn’t everyone?

This is different.

Why?

Because it is coming as a logical conclusion, and not as a first-step with no experience and no secure basics. 

You’re keeping your head-earned basics secure. 

Nothing is touching these. You’ll be surprised at the kind of courage secure basics give you to act further. 

Next, you’ve identified an area where your skill-set can be leveraged into huge profits with minimal risk. 

Specifically in the market, these areas are abundant. 

So what exactly will you be doing?

Playing on a minuscule portion of your net worth. Let’s say not more than 2 %.

Leverage.

Stoploss.

Profit-run.

Position-sizing. Scaling up upon profits. Scaling down upon losses. 

Overcoming your demons. 

Fear.

Worry.

Hypertension.

Exuberance.

Hubris.

Complaecency. 

Going beyond. 

Multiplying.

Going for the jugular. 

The Benefit of Quantum upon Quantum

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Underlying equity. 

How do you protect against fraud and / or investor-unfriendliness?

You’ve done your research. 

All good. 

Stock is a buy. 

Meets your parameters. 

What’s the next step?

Protection. 

You buy quantum upon quantum. 

You don’t plunge into the stock with all you’ve got to give. 

No. 

You put in a quantum.

Then you wait. 

Better opportunity arises.

Fundamentals haven’t changed. All still good. 

You put in another quantum.

Quantum…

…upon quantum. 

That’s how you keep entering the stock till it keeps giving you a reason to enter. 

Year upon year. 

Between quanta, you’re studying behaviour. 

You’re looking for investor-friendliness. 

Your next quantum is only going in if investor-friendliness continues.

No more investor-friendliness?

No more quanta.

You wait.

Will investor-friendly behaviour resume?

And you wait.

Is it coming?

Yes. 

Good. 

Upon buy criteria being met, next quantum goes in. 

Not coming?

At all?

Ok. You’re looking to exit. 

Market will give you a high to exit. That’s what markets do. They give lows, and highs. 

Wait for the high. 

High?

Exit. 

What’s bothering you today?

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Get it out of the way.

Why?

Bother takes a toll. 

Focus goes away. 

You don’t wish to see your trade. 

That’s a pathetic condition to be in…

…as a trader. 

When you’re in a trade…

…you need to monitor the trade. 

How will you monitor a trade…

…if you don’t feel like looking at your screen?

What’s causing your indifference?

Bio-chemistry. 

Resulting from?

The spot of bother.

That’s why, get it out of the way.

Trade gone wrong?

Kill it.

Spouse problem?

Address it.

Child matter.

Deal with it.

Bring your environment to an immediate logical conclusion…

…if you can.

Why?

You’ll trade like a king…

…or a queen…

… whatever title you prefer. 

You’ll see clearly. 

You’ll want to open your terminal. 

Your ideology will be aligned with your trade. 

You’ll be making money. 

That’s why. 

Holding the Line

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Your systems are in place.

They’re implemented. 

Basics are going. Life basics. Family basics.

Then you’ve got your income basics. They’re safe. They generate income. This income goes towards comfortable upkeep of your family. Some of it is saved. 

Your investment portfolios are firing. Savings have built these up. You don’t touch these, but keep adding to them upon opportunity. 

You’ve just finished implementing all your trading systems. 

Some of these are on auto-pilot. 

The other ones demand a little of your time each day. 

They keep you sharp and all there. 

Nothing much. 

Just fifteen to twenty minutes each. 

Skin off your teeth. 

You tackle them with your bed-tea. 

In other words, you are set as far as being income plus plus plus. 

Good. 

Now what?

Now you need to hold the line. 

What does that mean?

It means everything. 

It means no blow-ups…

…no crazy decisions that impact folios and family…

…basically nothing insane coming from you that will threaten your hard-earned situation or worse. 

Holding the line means making sure basics stay intact…

…folios keep growing…

…and new systems keep developing that add to these. 

It’s really that simple. 

When you hold the line, your next step either maintains status quo or adds to you. Preferably, it adds to you.

However, the simpler something is, the more difficult it is to follow. 

What are the demons that can slay you?

Over-confidence.

Over-ambition.

Hubris.

Greed.

Showmanship. 

Debt.

One-up-on-the-Joneses-ideology. 

This stuff looks pretty harmless at first, but is enough to give rise to cracks. 

Cracks grow… 

…till you’ve either come back to your senses and filled and sealed them…

…or till they’ve destroyed you right down to beyond your basics. 

Yeah, a full blow-up is never really far away, once cracks start to appear. 

Therefore…

…while holding the line…

… you keep reminding yourself about what you’re doing…

…why you’re doing it…

…and that you’re never going to blow up, come what may…

…and that you’re going to keep holding the line, come what may…

…and that your next step is always going to add to you.

Happy Holding!

🙂

Control

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Longevity.

We look for it in the markets too. 

It’s natural.

Our first instinct is to survive. 

Our second instinct is to survive well. 

In the markets, both these instincts are addressed by our definition and understanding of control. 

Are we control-freaks? 

There’s no harm in admitting it, it’ll save us from losses. 

Well, if we are, we’re better off seeking another career where control-freaking is an asset.

In the markets, it’s not.

Yeah, surprise surprise, Mrs. Market is gonna keep hitting our stops again and again and again, till we get tired of second-guessing her and just sheer quit.

Or, if we’re adamant too, she’ll just drive us bankrupt. 

Are we giving her complete leeway?

Well, then she’ll drive us bankrupt anyways, with no stops in place.

Mrs. Market works against us when we exhibit extreme behaviour wrt control.

Let’s fine-tune control.

We’ll find the median for stop-size.

Something that’s workable.

We then move with her.

If she moves in our direction of the trade, we keep raising our stop with her, from a distance, quietly.

Control, mild, unadvertised.

She’ll stop us out eventually, perhaps after some profit.

Good. 

As in, workable. 

When she goes berserk in our direction of the trade, we’ll ignore her and just let her do her thing.

Minimum control.

No definition of targets.

Stop is far away. It’s deep in profits, and being raised quietly. She’ll need to stop us out with a big swing against us. Yeah, deep in profit, we’ve kept a large leeway between stop and CMP.

We’re not micromanaging her.

Motive?

We wish to allow her to go even more berserk in our direction of the trade.

We’re daring her too, as in “come and get our stop, if you have the guts to fall this far”.

Control.

Very subtle.

We’re controlling our environment, while simultaneously ignoring her.

Very workable. 

We’ll live long in the markets. 

Scaling Up

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When you find a system… 

… that works… 

… what’s the next step? 

Plunge? 

Wait. 

Look left and right. 

Meaning? 

Look at your basics. 

Are they in place? 

Meaning? 

No worries about food on the table? 

No worries about kids’ education funds?

Basic family luxuries in place? 

No? 

Get these together and going. 

Yes. 

Ok. 

Go for it. 

Scale up. 

Your decision to scale up should at no time endanger your basics. 

You’re scaling up from  your extras.

You’re scaling up with stops in place. 

If your stops are hit, you’ll change your system till it works again. 

You will not borrow from your basics. 

You will wait for your extras to accumulate, and divert these into scaling up. 

Having gotten all that out of the way, let’s cast a glance at the concrete process. 

1x is working, or so you say. 

In fact, you’re sure 1x is working. 

Ok. 

Now do 2x.

Working? 

5x.

Can you take it? 

Do you sleep well at night? 

Fine. 

10x.

Working? 

Family life intact? 

Basics intact?

Fine. You take it from here. 

Where do you plateau? 

Right before a level where something might get disturbed. 

It’s really that simple. 

Happy scaling up! 

🙂 

Wealth-Generators often go Contrarian

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You knew that too, right? 

Sure. 

Going contrarian is a buzz-phrase. 

We hear it again and again…

… till we begin to start thinking… 

… that we know what it means. 

Well, try going contrarian. 

Yeah, try actually doing it. 

You’ll see what I mean. 

It’s real hard. 

Going against the crowd takes all the strength you might have… 

… and then some. 

Most humans aren’t able to go contrarian. 

Most humans aren’t wealthy. 

When there’s blood on the streets, there’s no telling how much more there will be. 

Under such conditions, the contrarian investor lets go of his or her hard-earned money into an investment, knowing perfectly well that the Street might even value the investment tomorrow at a huge discount to today’s price.

That’s ok too, says he or she.

Why?

Because homework’s been done.

Underlying is strong.

Debt-free.

Management is stellar.

Balance-sheet is robust.

Projections are paramount.

That the world is pricing the investment wrongly is a problem with its vision.

Underlying is not going under. With above credentials, this alone matters.

Times change. Vision of the majority changes. Investor makes a killing. Cashes out some, principal and what have you. Leaves lots of free-standing shares… forever… or till parameters change.

Wealth-generators repeat this behaviour-pattern many times in their lives.

They’re not afraid of going against the grain.

They know otherwise.

Also, the money they use has been freed up.

Its being out of action for a long time is not going to change their lives even a bit.

They will have the last laugh.

Wealth is the reward of going contrarian. 

Wealth vs Income – the What-When-Why? 

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Income… 

… comes into your account… 

… on a regular basis. 

You spend a good part of it to keep your ball rolling. 

If you save even a fraction, well you’re good, because this ain’t really an age of savers. 

Saved income goes into an asset. 

The asset either generates more income…  

… or, it generates wealth. 

What is wealth?

Wealth is not income. It doesn’t come into your current account regularly. 

Wealth accrues. 

Wealth compounds.

Wealth multiplies. 

Wealth grows in a skewed fashion, like an exponential curve.

You don’t look at your wealth-generating asset everyday. Once a month is more than enough. 

Wealth funds big events. 

Wealth likes time, to grow. 

Wealth separates you from those who are hungry. Hunger is not limited to food. 

Have you understood the nature of wealth?

What do you strive for, income or wealth?

That’s a huge question.

I’ve answered it for myself.

It’s taken 12+ years to find the answer.

I’ll tell you.

I now strive to create wealth.

Why?

Because income has become just a number to my mind.

Yes, that’s the answer for me.

Learning to define the quest for income or wealth requires the appropriate state of mind.

When income becomes just a number to your mind, addition to it doesn’t satisfy you anymore.

Yeah, the kick is missing…

…the thrill-factor…you know what I’m talking about. 

In an effort to rekindle this missing element, you then look to create wealth.

There’s enough additive securing you. 

You start going for the multiple. 

🙂

MP vs MoS : the lowdown on Trade-Entry

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Margin of Safety (MoS)… 

… hmmm… 

… wasn’t that in investing? 

Well – surprise – it’s in trading too. 

You can enter a trade with MoS. 

How? 

Ok.

ID the trend. 

Wait for a minor reversal.

Let the reversal continue towards a pivot, or a support or a what have you. 

During this reversal, whenever you feel that you have considerable MoS, well – enter. 

Why shouldn’t you wait for the pivot to get touched? 

Things happen real fast at a pivot. Upon a pivot-touch, you can lose your comfort-zone even within minutes. 

Two vital things can happen at a pivot. 

Either there’s a quick bounce-back, or the pivot gets broken. 

Bounce-back means your trade is now in the money, and that you can go about managing your trade as per your trade-management rules. Wonderful. 

Pivot-break is not a worry for you. 

Why? 

Because you’ve placed your stop slightly below pivot, after the noise. 

Upon pivot-break, you get stopped out. You take the small hit and move on to your next trade. 

Eventually, things heat up. 

There is movement. 

Tops get taken out. 

Fast money can be made. 

How do you enter here? (Needless to say, for shorts, everything is to be understood reversed). 

Momentum play (MP)… 

… is the weapon of choice. 

You set up a trigger entry after a top or a resistance or a what have you, and wait for price to pierce, and for your entry to get triggered. Then you place your stop, below top or resistance or what have you. 

MP vs MoS is a matter of style. 

If you’re not comfortable changing your trading style to adapt to times, that’s fine too. Stick to one style.

If you’re conservative, stick to MoS. 

In a frenzy, however, MoS might almost never happen. 

In a frenzy, entry will be triggered exclusively through MP.

Take your pick. Adapt. Do both. Or don’t. Do one.

You call the shots. 

This is about you.

Adding No-Action to your Repertoire

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Action with positive outcome vs…

… no action vs…

…action with negative outcome…

…hmmmm.

Sometimes we become oblivious to actions with negative outcomes.

Society preaches to be active.

We listen.

We feel that doing something means a step forward.

Well, it ain’t necessarily so.

Many times, and especially in the markets, it actually pays to do nothing.

The most successful investors in the world will tell you, that the biggest money is made while sitting. They’ll also tell you, that almost no one has learnt how to sit.

They’re right.

Meanwhile, I’m telling you, right here and right now, that you can sit comfortably upon your investment without jumping only if you’ve bought with margin of safety. Think about it.

Also, the most successful traders in the world will tell you that the number one action that saves money in the markets is no action. Yeah, when markets move sideways, which is about 60%+ of the time, trades tend to get stopped out both ways, and the trader loses money repeatedly. At such times, it’s better not to trade.

What’s vital here?

Recognition.

Recognize that it’s a time for no action.

Then, do something else.

For this to be practical, make trading and investing your bonus activities.

Meaning, that if your bread and butter depends upon another mainstream activity, you can easily switch off from trading and investing for a while, at will, and without any negative impact upon your basics.

Also, you need to be versatile enough to have fall-back activities lined up, which switch on where trading and / or investing switch off. These need to take over then, and keep the mind occupied.

The danger of not going into no-action mode is the continuous committing of actions with negative outcomes.

That’s precisely where we don’t want to be.

 

 

 

 

 

 

 

Did you invite the f-word?

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The next trade… 
… yeah… 
… take it. 
What? 
Can’t? 
Why?  
Afraid of what might happen. 
That’s the whole thing. 
You see a setup – you trade the setup.
When you see a setup, there are no more what-ifs, supposings or anything. Then, it’s just you and the trade. Take the trade. 
No room for f-(ear). It’s the new f-word.  
How do you drive fear out of the equation? 
Risk a miniscule fraction of your networth per trade. 
Don’t make trading your bread and butter. Make it your bonus. 
Don’t allow anyone else’s negativity to creep in. Don’t talk to people. Trade on your own. No room for tips. 
Don’t listen to your broker. Tell him what to do.
Don’t trade under compulsion. 
Enjoy your trading. 
Once in the trade, lose the mini-bias that got you in. Now, just manage the trade. 
Stop hit? You’re out. 
Run? 
Raise stop. 
Running? 
Keep raising stop. 
Losing some of your notional profits? Market throws you out?
Good. That’s a proper exit. 
See, fear wasn’t allowed to the party. 
Look for next setup. 
Position-size your entry. 
Take the next trade. 
And so on and so forth. 
Not upto trading?
Ok. Don’t trade. Till you’re up to it.
 
Demons out of the way? 
 
Up to trading again? 
 
See the next setup?
 
Take it.

Does your Exit hurt you?

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Good. 

Good? 

Yeah. Good. 

A proper exit – hurts. 

Huh? 

What about exiting on a high? 

Sure. 

Go ahead. 

Exit on your high.

Who’s stopping you? 

However… 

… who’s to say that the high won’t become higher? 

Exactly. 

No one knows. 

So, while the uncertainty about the high becoming higher is still out there – smarty – why are we going to not let it play out? 

Exactly. 

We are going to let it play out. 

Purpose? 

A new high might be posted. We then make more profit. 

Or, trade starts going against us, and we start to lose some of what we’ve gained. 

Hurt starts. 

When you can’t stand this hurt anymore – exit. 

That’s a proper exit. 

It’s leaving a bad taste in your mouth in the end. That’s when you know it’s a proper exit. 

You’ve stomped out the possibility of a new high. 

You’ve taken what the trade has to give. 

You’ve let the hurt set in. 

You’ve let the trade arrive at its logical conclusion. 

Now, you are exiting. 

Congratulations, you are exiting properly. 

Continue like this and you’ll become a great trader. 

What, have I let the cat out of the bag? 

Don’t worry, one can say it a million times and 99% of all traders will still continue to exit improperly. 

It’s human nature. 

Human nature works against the mindset of a winning trader.

Building Your Own

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You do. 

In the process, you learn. 

More experienced ones advise. 

Fine. 

You listen to their advice. 

Ok. 

Stop. 

Think. 

What experience are we talking about?

Their experience.

It’s great for them.

It might be good for you. 

To a point. 

To learn the ropes. 

You need to take it from there. 

Markets are such. 

They give each player a unique experience. 

Why? 

Because each human has a unique psyche. 

You are you. 

You should play like you.

That’ll ultimately teach you how YOU can win. 

Winning is also about implementing adapted systems that suit you and your curriculum in every small and large detail. 

Proper winning might take years to manifest after you’ve ironed out all the niggles in your character that pertain to the market. 

I’ll give you some examples. 

It’s taken me twelve years to tune my multi-faceted life towards the markets in such a manner that I now trade regularly. 

It took me ten years to discard all the tech-overload and work with the bare-required-minimum.

Seven years was what I needed to realize that I was my best friend and my worst enemy in the markets. 

Now, if I need to learn something new, I go it on my own. If it’s still out of reach, I get an instructor. Only to the point I can walk alone again. 

When you’re walking alone, you learn to listen to your common-sense. 

Your systems develop inside you. 

As you keep acting, these keep fine-tuning. 

Soon, because you’re persistent, these develop winning ways. 

Wishing you a successful market-foray, whatever market you are in! 

🙂 

Dealing from a Position of Weakness 

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When you’re losing… 

… you downsize your position. 

Why? 

To save your corpus. 

You lower the risk. 

Is risk quantifiable? 

You bet. 

Risk is no abstract entity without a body. 

In a trade, your risk is defined by your stop to stack-size ratio and the size of your one position. 

When you’re losing, you either lower the magnitude of your stop, or lower the quantity of your one position. 

Till when?

Till your corpus crosses par and then some. 

At par, you trade normal. 

Normal stop. 

Normal quantity. 

What is normal? 

Depends on you. 

What is normal for you? 

That’s what goes. 

Why the caution when below par? 

Lots works against you at this time. 

Sheer math for example. Downsizing sets this right. 

Emotions. 

Whoever’s got a remedy for those is king already. 

You. 

Your body-chemistry is affected. You’re sluggish. More prone to error. Nobody’s got a remedy for you, except you. Wait for your body to heal before trying out that perfect cover-drive, or what have you. 

Winning or losing in the markets depends a lot upon psychology, chronology, systems, strategy, application and adaptation of style. 

I like to call this “getting one’s meta-game together”. 

Let’s go people. 

Let’s get our meta-games together. 

Then we can scale it up. 

🙂