Another great thing about weekends

April 27, 2007 by admin · Leave a Comment
Filed under: Uncategorized 

Several weeks ago, I sent you a note about how weekends are
great for catching up on learning and reading and self-reflection.

Another great thing about weekends and even more important is
that this is the time when you actually get to live YOUR life, not
the work life.

Make sure that you take time to enjoy your family and your
friends. Have some fun, read a fiction book or watch that movie
that you’ve been wanting to see.

Life is way too short to go without living it along the way. We
only get one shot at this, so we need to make the best of every
opportunity to enjoy it.

There are tremendous benefits to taking complete 24-hour
periods where you totally disengage from your work or business
life. No email, no phone, no anything. Completely let your mind
be away from your work-related responsibilities for a full day.

Weekends are often the only opportunity we have to live life for
more than just a few hours. We can have one or two full days of
life on the weekends.

Instead of living for the future, live for right now and make some
memories, especially with people that you care about.

….a few thoughts on a Friday.

I hope you have a great weekend!

Cheers

Brian

Tags:

A trader walks into a bar…

April 26, 2007 by admin · Leave a Comment
Filed under: Uncategorized 

A trader walks into a bar looking really down, sits down
and orders a beer. He chugs it down and asks the bartender
for another.

As soon as he gets that one, he chugs it down too and asks
for a third.

The bartender asks him what’s up as he sets the third glass
down, and the guy says to him, “I did it again today. I
just don’t know what’s wrong!”

“What are you talking about?” asks the bartender.

“Well I just keep shooting myself in the foot, and I can’t
figure out why I keep doing it and how to stop. This is
really aggravating!

“You see, I’m a futures and Forex trader and I keep staying
my trades too long and giving back all my profits. Either
that or I’ll pull my stops hoping that the market will turn.

“It seems like every time I start getting my account ahead,
I do something stupid and wind up taking three steps back.”

The bartender leans over and says, “You need to talk to
that guy at that table over there. He’s a trader too and
he’s in here regularly having a grand old time.”

The guy looks over and sees the other trader laughing and
making toasts with his friends, having a much better time
than him, so he heads on over to the table.

“Hi. The bartender said you’re a trader too, and that I
should talk to you. How is it you’re always partying? I
seem to be drowning my trading sorrows most of the time.
What’s your secret?”

“Sit down and join us.” says the happy trader.

“I’ve seen you over there, and I used to be on that same
bar stool doing the same thing, wondering how to turn it
around and beating myself up at the same time. You see,
here’s the thing. You’re probably a decent trader, but
every now and then your emotions will kind of take over,
and you wind up doing something that you know you shouldn’t
do but you do it anyway. Am I right?”

“Yeah, but how do you get a handle on it? That’s what I
want to know. Staying disciplined is a whole lot easier
said than done!”

“It is when you try to fight your emotions. I used to try
to ignore them, suppress them or just forcibly control
them too. Doesn’t work.

“We’re human beings, man! Our feelings are part of who we
are! Once you start trading WITH your emotions, you’ll
find that they can actually help you trade BETTER than
before.”

“Okay, so how do you do that?”

“First thing you need to do is quit trying to do it on your
own. It’s next to impossible to pull yourself out of a
tough spot.”

“I was pretty lucky. A good friend of mine recommended that
I check out The Trader’s Guide to Emotional Management
and it was the best thing I ever did. My profitability
went up immediately and now I’m partying instead of
pouting. And, I feel a whole lot better about myself, too.

“After all, trading really isn’t that difficult IF you can
keep your head on straight and avoid trashing your
account.”

“So where can I get this Trader’s Guide to Emotional
Management?”

“It’s on the internet. Just go to

http://www.insideouttrading.com/tgem/

“Check it out. You’ll be over here having fun with us from
now on!”

“Thanks! I’m heading home right now to do just that! I’m
definitely ready for a change. What was the site again?”

http://www.insideouttrading.com/tgem/

“Cool! Welcome to the group! See you here tomorrow!”

——————————————————————

P.S. Share this with your friends! It will bring you good luck, seriously!
The concept of Karma is real and if your friend benefits, then that’s good
Karma and will come back to you!

http://www.insideouttrading.com/blog/

Tags: , , ,

Trading Systems and The Carnot Cycle

April 14, 2007 by admin · Leave a Comment
Filed under: Uncategorized 

Your goal is to maximize your profits and thus your return
on your trading capital. But how do you know if your
trading is truly optimized or if there is room for
improvement and more money to be made with it? If it
could be better, is it you or your system and how can you tell?

Trading systems, like automobile engines, are never 100%
efficient and there are parallels between the two that can
be useful to you. There are many concepts from Mechanical
Engineering which can be utilized in Trading. One in
particular is the Carnot Cycle.

The ultimate engine would convert every joule of the
chemical energy in the fuel to work as that is the engine’s
primary purpose. In the real world, a certain amount of
that chemical energy is lost to heat, friction, entropy and
other inefficiencies.

For any given trading system executed perfectly, there will
always be a certain percentage of trades that are not
profitable and a certain portion that are. Additionally,
most systems are based on lagging indicators and even “predictive”
systems still rely on historical data. No system out there will
pick the exact top and bottom of every market move, so the
size of actual gains and losses is also a factor in the
profit potential. So how can you tell what is the true
potential of your trading system?

Back in 1824 Nicolas Leonard Sadi Carnot developed a
thermodynamic model called the Carnot Cycle for engines
which provides the maximum output that can be expected from
any given type of engine. For example the Carnot Cycle for
a diesel engine shows the absolute maximum work output that
any diesel engine could attain.

This thermodynamic model was and is particularly useful for
combustion engine design because in very clear mathematical
terms, the Carnot cycle represents the ideal cycle
possible. It clearly identifies and illustrates the
greatest achievable efficiency for a given engine type.

Even a perfectly designed and manufactured diesel or gas
engine can only hope to achieve the efficiency of the
Carnot Cycle as calculated in the thermodynamic analysis.
There will always be losses due to heat and entropy.

Fuel efficiency in automobiles has substantial consequence
to all of us both direct and indirect as it impacts the
cost of transportation for both ourselves and goods we buy.

Efficiency in Trading also has both direct and indirect
consequence as it impacts both our account and our quality
of life. Profitable trading provides monetary rewards and
personal gratification, while inefficient trading can have
a severe negative impact on our self-esteem and our quality
of life.

Like the Carnot engine, you can determine the maximum
potential for your trading system through backtesting it
under ideal conditions, when every trade is executed
perfectly in the market of your choice according to the
rules and indicators of the system. Since most systems and
software make use of lagging indicators, it is important to
make sure that during backtesting you trade the system
exactly according to the system.

During this process, you can make determinations that have
direct financial benefit:

- what the true maximum profitability is for your system

- you would have a baseline or reference point for long-
term planning for your trading.

- see if you’ve had reasonable or unrealistic expectations
for your system and your profitability.

- if you find that your system is not capable of results
that are satisfactory to you, then you need to look at
possibly modifying or replacing your chosen system.

- if your system is capable but you haven’t been seeing the
results you expect, then you know to look for
opportunities for improvement in how you trade.

- if you find that you’ve been making specific mistakes due
to emotions influencing your trading, then improving your
emotional management would be the most likely way to have
a substantial impact on your results.

A focus on continuous improvement is a mindset and practice
that has direct financial rewards for traders that pursue it.

Regardless of the markets you trade or the system you use,
emotional management is imperative to realize the most from
your trading, as this is one of the most common
inefficiencies.

In Trading, inefficiencies are losses and missed profits and
add up considerably over the course of a year. Having a
clear understanding of what your system’s possible best is,
then identifying those inefficiencies in your trading is
empowering and rewarding both financially and personally.

Tags:

Are you using your power to get results?

April 9, 2007 by admin · Leave a Comment
Filed under: Uncategorized 

If you hired a mechanic to fix your car, you’d stay after
him until it was fixed, wouldn’t you?

If he said that he didn’t have time, would you say “Okay,
well get to it when you feel like it.”? No.

If he said that he didn’t have the right tool, then you’d
expect him to get what he needs, wouldn’t you?

If he said that he didn’t know how to address this
particular problem with your car, then you’d expect him to
get out the repair manual that shows him what to do, with
all the diagrams and step-by-step instructions.

No matter what his excuse, you don’t care, you want your
car fixed.

Well if your trading is falling short of what you want,
then are you accepting excuses, or are you going to do what
it takes to get it where you want it?

Remember the formula for results:

Decide - Learn - Act

- Decide on the outcome you want

- Acquire the information necessary to make that outcome a
reality

- Take action to produce the outcome

Now you already have the abilities necessary for this
formula, but if you are not getting the results that you
want, then you need to see which of these three abilities
you are not employing.

Have you chosen the outcome you desire? If not, then now
is the time.

Are you acquiring the knowledge to understand what needs to
happen and how to make it happen? Einstein said that we
cannot solve problems from the same level of understanding
from which the problems were created.

Are you simply failing to take action? One definintion of
insanity is to do the same things over and over but expect
different results. In order to produce a different
outcome, different actions must be taken.

Often times, a person will hesitate or procrastinate for
a variety of reasons. They’re not really reasons, though.
They are excuses and rationalizations, because if there is
something that you truly desire, then there aren’t really
any justifiable “reasons” for not fully pursuing it are
there?

If the problem is that your emotions are causing you to
make mistakes in your trading, then you should focus on
increasing your emotional intelligence until it is no
longer a problem.

If you are just not sure of what you need to do in general,
then the “Good Trading Checklist” that is included in the
Trader’s Guide to Emotional Management shows what the good
practices are in trading and explains how each of them
directly benefits you with regards to producing the results
that you want, plus how each protects you from emotions
getting in your way.

Stop making excuses and start making things happen. You
wouldn’t accept them from anyone else, so don’t do it to
yourself.

http://www.insideouttrading.com/tgem/

I hope your holiday weekend was enjoyable and this week
proves to be one of things moving your toward your goals.

Cheers!

Brian

P.S. Remember: Decision + Knowledge + Action = Results

http://www.insideouttrading.com/tgem/

Tags:

Coming soon: the Trading System Analyzer

April 6, 2007 by admin · Leave a Comment
Filed under: Uncategorized 

Coming very soon is a powerful tool that will lower your anxiety and boost your confidence tremendously. Many of the fears and stress that occur in trading come from a lack of confidence in your trading system, but so few traders know how to easily determine what their system is truly capable of producing.

That’s where the Trading System Analyzer comes in - you’ll be able to KNOW within minutes what your system should be doing, what it could be doing and if it’s been living up to expectations or falling short.

This powerful tool will be released very soon, so be checking your email inbox for details….

Tags: