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What Can Model Airplanes Teach You About Trading?
I was devastated!
I just couldn't believe it. I was 10 years old and my dreams were shattered. I never wanted to look at another model airplane again!
But I'm getting ahead of myself. Let me start at the beginning.
When I was about 8 years old my older brother got interested in model airplanes. He had one that was connected to a control handle by fine wires. It flew around in circles whilst he stood in the middle controlling it.
[This was just before radio-controlled planes became popular -that's showing my age!]
And occasionally he would let me fly it.
The first time I flew his plane I was hooked!
I can still smell the fuel and hear the high pitched wine of the engine as I caused it to rise and dip as this fast moving object tried to pull my arm off!
I wanted one for myself. But I guess my parents thought I was too young. So it was some time later and after saving my pocket money for what seemed an eternity that I finally got to buy my own model aircraft kit.
I can remember going into the hobby shop and choosing which one to buy. And then rushing home to get started on putting it together.
I was so excited as I opened the box. And I got all the balsa wood and other materials out on the kitchen table and studied the plans.
The first task was to cut the sides of the body of the plane out of balsa wood. It was a big plane and so the body was quite long.
The first time I did this I was doing it freehand.
So I borrowed my Dad's big metal ruler. And I carefully cut along the line that I had marked on the wood.
But it was still crooked!
I tried once more and then I gave up. And I never made a model airplane again!
You see I wanted my first model plane to be perfect. But I realized that I couldn't achieve that. And so I gave up.
Years later I can still remember the frustration and disappointment that I felt at that moment.
Now what is the point of my telling you about my childhood traumas?
Novice traders often fall into the trap of wanting everything to be perfect before they place a trade. They want all their indicators to line up and they demand a perfect candlestick setup pattern.
Perfectionism has no place in the stock market.
Now, I'm not saying that you shouldn't try and be the best trader you can be.
But accept that you will never know all there is to know. And that you will have to make your trading decisions based on imperfect information.
And despite that realize that you don't need to be perfect to be successful.
Misguided perfectionism robbed me of pleasure as a 10 year old. Don't let it rob you of trading success.
Ordinary People Making Extraordinary Profits!
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The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn't worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.
Can?t Stand The Heat
It seems that every day I turn on the TV and find a Poker game. Texas No Limit seems to be all the rage these days. I love watching it. When I discuss this with others, their response is always the same, "You should play." Ah, but what they don't know is I stay out of the kitchen. As far as risk to reward ratio. That's a gamble I'm not willing to take. I prefer to invest my money. Sometimes I gamble in the stock market, but as long as I stay within my comfort zone (long term), I don't mind.
Analyzing Growth Stocks: An Important Focus For Any Investor
Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find. Still, we need to look at the big picture once in a while. Since so much has changed lately, this may be a good time to "take stock". Many have reevaluated their investment strategies. The problem is that many of these reevaluations are moving people away from their goals. As the market has dropped, rather than moving toward buying at the cheaper prices, we've seen people move away from stocks, a strategy which has little long-term benefit.
Long Term Financial Vehicles
Investing in long-term financial vehicles give you the most gains but it also puts your funds at greater risk. There is much truth to the saying, "there is no gain if there is no risk". Still you can reduce your chances of losing your hard earned money, by researching and taking time to understand what you are buying. Would you purchase a house you've only just seen on the outside? Both of these are serious investments and you need to arm yourself with the basic knowledge about the subjects.
The Three Little Pigs Went to the Stock Market
Three little pigs went to the market to stock up for the future.
Stock Chart Reading
As an investor you will want to check out any equity before you buy it. Many investors go to Morningstar which is one of the largest providers of mutual fund information in the world. It is assumed that their information is correct. After all that is what you are paying for.
Mutual Funds: The Modern Den of Thieves!
Mutual funds were created with the idea that one person can specialize and manage the investments of a large pool of money from multiple investors. Before the great depression mutual funds were called investment pools and mutual fund managers were called pool operators. The bull market of the 1920's created a time of economic prosperity akin to the 1990s. The conceptualization of the pyramid scheme occurred at this time as well.
Advantages and Disadvantages of Mutual Funds
Outlined below are some of the advantages and disadvantages of mutual funds. Every investment has advantages and disadvantages. But it's important to remember that features that matter to one investor may not be important to you. Whether any particular feature is an advantage for you will depend on your unique circumstances.
The Skinny on Mutual Fund Investing
Mutual fund investing is a lot like Thai cooking. Everyone has heard of it, most know a little something about it, but very few actually know how to do it and do it well. To invest in mutual funds wisely, it is important to have a good grasp on what mutual funds are, how they work, and what the risks involved may be. The fact that mutual fund investments are often considered safer than stocks, options, and other investments often misleads people to think that their investment in mutual funds are risk free. This, as you will see, is not the case.
Exchange Traded Funds Primer
Exchange Traded Funds (ETFs) are a group of passive index funds that trade on an exchange like an individual stock. At the time of writing there are 162 ETFs with $220 billion in assets under management trading on U.S. exchanges.
A Triple Dipper: How to Make 3 Profits on 1 Stock Trade
This is a rather simple strategy with which I am sure a lot of seasoned traders are very familiar, possibly under some other name with which I am not familiar. I wanted to write about it because I don't see anyone talking about it anymore. Since the big hey-days of day trading and, of course, the burst of the Internet bubble of 2000, there seems to be a lack of patience that this strategy needs to work.
Having lived aboard a sailboat for 2 years I was stricken when I saw the movie "PERFECT STORM". I know these are things you want to avoid at all costs. Even little storms can play havoc with your life style on a boat.
Race Horses and Mutual Funds
For years investors have been taught to look into the composition of a mutual funds. In other words the "experts" want you to take the time to analyze the stocks within the mutual fund portfolio, categorize them by industry group and try to understand the objective of the fund manager. This is nonsense.
There is a current movie entitled "Eternal Sunshine of the Spotless Mind". It is about a man who has had a painful love affair and will do anything to rid his mind of those pain thoughts of a former love. He sees an advertisement that offers just such a service. It seems his former lover has the exact thoughts and she goes through the same treatment. Guess what? They meet again, do not recognize each other, and fall in love again.
Trade Stocks for Real
I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Back testing and paper trading seem to be the most over emphasized techniques offered by market theorists, educational elite, market novices and/or market fakes. While learning the pure basics, I can see why a novice investor may want to paper trade; to see the results of the developing system but I will warn that these results are completely false. The results will not contain the emotional decisions that go along with risking your own cash. Anyone and I mean anyone can paper trade successfully. It's simple, place a trade and hope it goes up and if it doesn't, you have no worries because you can't lose. The emotional imbalance that occurs when you really start to lose money is not present. Don't fool yourself by believing the results of your paper trading or virtual simulation portfolio. These things may give you some confidence in your system but they don't prove a damn thing in the real world. The real world, specifically the stock market, is run by emotional human beings. People make decisions that are irrational and base their trading decisions on fear and greed. Paper trading lacks fear and greed because there is no gain and no loss; therefore there is no consequence to deal with.
Are you one of those many people who dread reading their 401K statements? You have been watching it decline for about 2 years and are wondering if will ever stop. Just about everyone says the market will come back. Brokers say you are in for the long haul so don't worry. Any account that drops to a 50% loss has to go up 100% to get "even" and that is a very difficult phenomenon. If you have an 80% loss as has already occurred in the Nasdaq you would need a 400% rally to get "even". At 90% you have to see a 900% rise to that mythical "even".
Learn to Calculate a Stock?s Pivot Point
Stocks breakout from properly formed bases everyday but many investors don't understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory. William O'Neil, the founder of Investor's Business Daily is considered the pioneer of the pivot point in modern times. As Jesse Livermore explains in his book (1941), the pivot point can also be described as the point of least resistance. When a stock breaks the point of least resistance, we are presented with an opportunity where a stock has the greatest chance of moving higher in a short period of time, especially when volume accompanies the breakout.
Hot Stock Investing ... How to Pick Hot Stocks with Momentum Stock Trading
Profitable day traders recognize that momentum trading is among the fastest & most effective ways to harvest BIG piles of cash in the stock market.
Is The Bear In The Cage?
For the last few weeks we have seen the stock market averages going higher and higher each week yet the economic news is still very bad. Is this bear market coming to an end? Will the stock prices and mutual funds go back up to where they were?
Because you don't feel too sure about which stock or mutual fund to buy you decide to become a member of an investment club. Each of the members contribute a certain amount of money each month and then meet to decide what to buy or sell.
Analysts - Do They Really Know The Stock Market?
When you become interested in a stock or mutual fund you can call your broker and he will send you reports on how the company is doing, what their management is like and what might be the projected earnings for the company and how the industry is doing. Great information.
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