Never Lose Again

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TheRumpledOne
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Postby TheRumpledOne » Sun Mar 22, 2009 8:42 pm

10 Unbreakable Rules
Stockscores.com Perspectives for the week ending March 21, 2009

Trading successfully requires winning the constant battle against your emotions. Normal people have a hard time beating the stock market because their emotional responses to fear and greed get the better of them. To help win these battles, there are some rules that should never be broken. Here are ten rules that I think are important, break them at your own peril:

1. Never Average Down
Averaging down is the practice of increasing your position in a stock when your initial position is losing money. Some misguided traders think that they can trade their way out of a loser by buying more at cheaper prices, allowing their average cost to go down so that their break even point is lower. Admittedly, this practice will work a lot of the time. The problem is that when it does not work, it can completely wipe you out. Without capital, you can not trade.

2. Never Believe in Dreams
Dreams are for Disneyland, they have no place in your trading. The stock market does not serve free lunch, there is no easy money and fast and easy profits in the market are just short term loans. If you do not have a well tested and thought out trading plan then you will lose eventually. I have seen many people make large sums of money because they got lucky but eventually gave it all back.

3. Never Take Trades with a Negative Expected Value
I have seen many traders make money on trades that they should not have. They think they are smart trades but they are really only lucky trades. If you make $1000 on a trade where you risk losing $5000, is that really a good trade? Good trades are those where the upside potential outweighs the downside risk, a trade that will make you money if you do it many times. To understand the expected value of a trade, you have to know the probability of success and the potential profitability if you succeed. A trade that has a 90% chance of making $1 and a 10% chance of losing $10 is not better a trade worth taking. A trade with a 20% chance of making $10 and a 90% chance of losing $1 is worth taking.

4. Never Trade on Public Information
The stock market is efficient most of the time. That means it does a good job of pricing in all available information. A stock that is worth more because they announce a major breakthrough in their business will see its stock price go up to reflect that new information. Once the market has priced in that new information, there is no reason to base a trading decision on it.

5. Don't Listen to Biased Sources
There are a lot of people telling investors what they should do and most of them have a bias. Company insiders, stock promoters, newsletter writers, message board posters, media reporters, financiers, brokers, friends and shareowners all have the potential to be biased. I will never understand why people phone the investor relations department at companies to ask about the business. Do they expect company staff to tell them bad things? The market itself is the only source you can count on to be truthful, listen to what the market says through the stock chart.

6. Don't Ignore Your Portfolio
People don't like pain and when they fear losses in their portfolio they often choose to ignore it. Putting your head in the sand does not make the problem go away, you are better to face the truth and do something about it. If your stocks are going down too much, sell them.

7. Don't Trade to Make Back Losses
Since we don't like pain we will often do whatever we can to make the pain go away. A dangerous time to trade is right after a big loss because we are desperate to make the pain go away. As a result, we take marginal trades, we trade like gamblers. This usually leads to more losses.

8. Don't Be Patient With Losers
No one is right all of the time in the stock market. That means losing trades are part of trading. What is important is to not let your losers grow in to big losers because big losers require many wins to pay them off. When the market tells you that you are wrong, get out of the trade and take the loss.

9. Don't Think You are Smarter than the Market
The stock market is the combined opinion of millions of investors, many of them very smart and very well capitalized. Do you think you are smarter than that? When you look at a stock chart you are looking at the outcome of the many opinions cast by investors. Learn to read a stock chart so you can understand what the market is telling you.

10. Never Stop Learning
I have been trading for 20 years and I am still constantly learning new things about how the markets work. The basic principles and methods that I use have not changed a lot, but how I apply the basics is constantly evolving. Keep your approach simple but always adapt to the changing market.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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TheRumpledOne
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2009.03.22 DRAIN THE BANKS!

Postby TheRumpledOne » Sun Mar 22, 2009 8:59 pm

2009.03.22 DRAIN THE BANKS!

Image

Join me in my FREE www.PalTalk.com chat room, the TWO PERCENT CLUB, as we drain the banks this week.

Free MT4 indicators and chart template attached.

DRAIN THE BANKS!!
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TRO_DTB.zip
(35.05 KiB) Downloaded 132 times
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby prochargedmopar » Sun Mar 22, 2009 9:46 pm

Hey TRO,
Could you combine the 5 dyn fibs into one code(indicator).
You might call it something like
TRO_DYN_FIBS_SR_5x5

Or TRO_DYN_FIBS_SR_TRAIL_X5

We would still have the option to turn off the triggers, set levels to 0, and change colors ect.

Be easier than having to change settings when setting up charts.

OR JUST USE YOUR MASTER DRAIN THE BANKS TEMPLATE........
Trying to make your job difficult as your making me trade ONE PAIR.
LOL!!

I must say, If I see a #3 pop up on the H1 chart of another pair, I may be tempted.
I'll let you spank me AFTER I'm done getting my 40 pip trade.
Procharged.
Last edited by prochargedmopar on Sun Mar 22, 2009 10:44 pm, edited 1 time in total.
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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prochargedmopar
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Postby prochargedmopar » Sun Mar 22, 2009 9:48 pm

BTW,
What is the 144 and the 500 iperiods suppose to signal?
Reversals.......?
#1BODY in direction of profit #2INCREASE lot size Obsessively
My Losses cause me Great Laughter!
Trading Bible here> therumpledone/the-ideas-that-i-trade-by-t3256/page1670

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TheRumpledOne
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Postby TheRumpledOne » Sun Mar 22, 2009 9:51 pm

NO combining.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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es/pip
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Postby es/pip » Sun Mar 22, 2009 11:02 pm

:D

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TheRumpledOne
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Postby TheRumpledOne » Sun Mar 22, 2009 11:09 pm

Image

I updated the TRO DRAGON MONEY MANAGEMENT to use my fill function so you can specify any corner and the column will adjust accordingly.

I have way too many indicators to update.
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IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

User avatar
TheRumpledOne
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Postby TheRumpledOne » Sun Mar 22, 2009 11:10 pm

"es/pip"

What did you do and why did you do it?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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kc8flq
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Postby kc8flq » Sun Mar 22, 2009 11:17 pm

MightyOne wrote:
They can ban me I don't care :roll:

I suppose I could set up a site and charge every one thousands of dollars to learn what I am teaching, but it would not be worth my time.

The only thing I want is for people to say that they are now trading for a living and that I helped get them there.



I may not be trading for a living yet, but with your charts and guidance I will be someday soon and YOU will be a major influence of that. The picture is clearing a bit with the last cpl weeks worth of explanations.

KC
Give a man a fish.... feed him for a day...
Teach a man to fish.... feed him for a LIFETIME!!!

rolska
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Postby rolska » Sun Mar 22, 2009 11:17 pm

Wow!!!! Poor banks.......
I see $'s in my pocket.
You guys rock!

Thanks a million
Rolf
=D>

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