The Three things in trading that will kill you

(Last Updated On: May 26, 2014)
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Three things in trading that will kill you.

 

Laziness

 

Complacency

 

Emotional trading

 

Think about these items as most retail traders I run into at various trading events have these common traits.

 

1.  Laziness is not innovating or learning on your own. Implementing from research papers or books does not make you successful. It is just a form of a building block you need to tweak for your long term robust profits.

 

2. Many people just get comfortable when they have a profitable ride. Once the market turns, they are usually losing money or no longer profiting. The best part: They don’t know why because they use something as a crutch for their trading techniques.

 

3. Emotional trading can pretty well make you physically sick if you get too stressed over it.

 

The important lessons I take away from all this:

 

1. Learn the math on your own. Learn how the numbers (market data really) flow to see the relationship between all the different parameters.

 

2. Pure math does not lie. Think about it. Math helps build bridges, airplanes, etc. So why can you not apply it in the markets? Do you really want to believe in some so called expert analyst sitting on a financial news show who bases their  intuition on a hunch? Again, math allows you to quantify market forecasts.

 

3. All those toolboxes, packages, and software libraries I got caught up in are just noise or distractions. Build the algorithm from scratch to quickly master your required math skills in probability, statistics, calculus, algebra, etc. You will be able to see things others cannot which gives you a HUGE edge over all the other ‘sheeple.’ Studying the videos on Khan Academy has got me to this recent path of reasoning.

 

So what should you take away from all this?

 

Focus on simple tools that focus on your algorithms and nothing else. This includes that Financial or Econometrics Toolbox. Forget those fancy libraries or packages, Can you really depend on them? Are they efficient? Are you actually learning the ‘under hood’ logic on why the result is what you get? If not, you may get slaughtered in the next market downturn. Best part? You won’t know why but hey, it is not my money.

 

 

 

Also:

 

The crucial lesson to be learned in being a successful quant wannabe or a high speed trading software engineer – See more

 

It is the market pros who prey off the uninformed also known as morons. Watch the video learn how this guy did it:

 

Confirmed! Ex Goldman Sachs Anton Kreil reveals how sheeple mentality of UNPROFITABLE retail traders get slaughtered by a pro trader – See more

I also hope these lessons set you off in the right direction.

 

Thanks Bryan

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!
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About caustic

Hi i there My name is Bryan Downing. I am part of a company called QuantLabs.Net This is specifically a company with a high profile blog about technology, trading, financial, investment, quant, etc. It posts things on how to do job interviews with large companies like Morgan Stanley, Bloomberg, Citibank, and IBM. It also posts different unique tips and tricks on Java, C++, or C programming. It posts about different techniques in learning about Matlab and building models or strategies. There is a lot here if you are into venturing into the financial world like quant or technical analysis. It also discusses the future generation of trading and programming Specialties: C++, Java, C#, Matlab, quant, models, strategies, technical analysis, linux, windows P.S. I have been known to be the worst typist. Do not be offended by it as I like to bang stuff out and put priorty of what I do over typing. Maybe one day I can get a full time copy editor to help out. Do note I prefer videos as they are much easier to produce so check out my many video at youtube.com/quantlabs