This TED talk is really impressive. Not only is the content so relevant, but his delivery is captivating.
Expectancy is suggested to be an even more important metric than accuracy to evaluate your trading performance. I see it a bit like a contractor’s day rate – the pay per unit of invested time with effort and experience being factored into the charge. Only that expectancy denotes your pay per trade with invested time and effort being rewarded (or not), and it is more of an average rather than a guaranteed amount per unit.
Proper risk management is still a bit of a mystery to me. I have come across bits and pieces of advice talking about stop losses, probabilities, position sizing etc. So far, I have only really practised honouring my stops instead of letting losers run away with my money.
When reading Reminiscences of a Stock Operator, I gained the impression that Livingstone didn’t use any technical indicators, just pure ticker action, experience and knowledge of the impact of certain events on the stock market. I might be wrong in this assumption. However, the idea strikes a chord with me.
Frequently, I see people post on social media something along the lines of, “What do you think of this or that indicator?” Some experienced traders seem to rely on their favourites.
This book was mentioned by a few of the interviewees on Chat with Traders. Eventually, I decided to get a hold of it and see what the fuss is all about. I snapped up second hand copy – probably the best investment of 4 GBP since long!
Reminiscences of a Stock Operator by Edwin Lefèvre was first published in 1923, but seems to provide timeless insights into the workings of the stock market. It is written as if it was an autobiography recollecting the experiences of a stock trader who the author calls Larry Livingstone. Apparently, it is based on the famous trader Jesse Livermore.
This is the second time in these first few months of trading that I am forcing myself to take a break. OK, it’s generally time to unwind. It’s summer – time to kick back a little and go for a wee holiday.
They say, you shouldn’t trade when your head is not in the right place. I have closed out almost all of my real and paper trades; just so that I can stay away from it all with a peaceful mind.
And then what?
Kreil provides a whole host of insights, explains the workings of the retail trader’s universe and confirms my own doubts about gurus and social media. Even though I don’t want to give away too much of the content, I have extracted his advice on vetting educators because it’s probably one of the first pitfalls newbies can get sucked in. Find it at the end of this post.