Trading Psychology: Traits of a successful stock market participants.
If u don't have it then inculcate it through hard work & perseverance.
This would be my suggestion.
1/ 3 groups of variables defined: 1. Personality traits 2. Cognitive traits 3. Biographical variables
2/ Based on the above 3 group of variables there are 6 traits which r found to most important ones in a successful stock market participant.
1. Capacity for sustained focus:
Fast thinkers : fast pattern recognition.
Deep thinkers: great deal of research.
One of the above.
3/Trait 1:
Daniel kahnemann: thinking fast and slow. Same kind of analogy talked in this book.
Both requires sustained attention.
Traders or investors: based on above.
Distinctive successful traders r either strong as fast thinkers or deep thinkers and not average of both.
4/
Trait 2. Originality & creativity:
If u look at same things as other traders, u wud do same things as others and get the same results.
Either look at different information or look at same information differently.
5/
Not playing the same game is big part of success.
Gathering new data, putting together in new ways.
Peter lynch said that individual investors have big advantage over others.
6/
Trait 3. Learned from mentors and other great traders:
Mentoring is the dominant path to success.
Sports: Olympic players, chess players, artists in paint studio. Its a cross field.
% of successful moments go higher.
7/
Master- Apprenticeship relationship. U cannot become a great golfer by reading books on golf. The process needs to b structured and modeled.
Role modeling/mutual learning.
8/ Trait 4 Mental resilience:
Treat loses as learning experience
Keep reasonable risk mgmnt
Learn wht u do differently, what u did wrong
Use loss to make better of urself
Its tough for people successful in other parts of life while u have more than 50% failure rate in the market
9/ Trait 5. Attention to detail:
Ideas are not all-important
Structure that idea into a good risk management package to get into that It's a great detailed arena
Timing, sizing, structuring the idea
1% inspiration & 99% perspiration
Detailed orientation is learned via mentoring
10/
Trait 6. Always working to improve their game:
Markets r ever-changing.
Periods when they r trending & less volatile.
Anyone's approach to trading has a self-life. Which is called edge?
U need to be evolving with markets.
Always research and development going on.
11/
Beginning traders find holy grail/setups, they r fooled by them.
Adapt to market conditions. Open-mindedness and flexibility.
Routinizing innovation at all levels.
12/
Inborn important capacity:
-Focus
-Intelligence
-identify particular strength, cognitive. Leverage those strengths vis a vis financial markets strategy.
Hereditary is relevant.
People with a short temper, mood challenges, distracting behavior may face a challenge.
13/
A not fast thinker can b successful investors. Not playing the right game is folly.
From good to great these r the top 6 quality in great traders.
****The End****
• • •
Missing some Tweet in this thread? You can try to
force a refresh
A lot of distribution days piled up in a short time recently. Pattern: Inverted Flag. A close below 17613 with above avg vols wud confirm a downtrend and the start of panic selling. Rather one can say it's at a major support zone.
NSESMLCAP: At a major junction. 2 weeks to decide
Important key: Major winners of the Covid rally are either in STAGE 3 or entered STAGE 4. Major tops are seen in many past winners, more tops coming soon. The next 2 weeks are very crucial. AUTO & INFRA to stand out in strength.
NIFTYAUTO: Some scope here. Many auto stocks are setup strong with major earnings this week.
Not listening to the market is a flaw
Listening to people, watching TV: Bad habits
Stage Analysis: Break the market into 4 stages. 1. STAGE 1 2. STAGE 2 3. STAGE 3 4. STAGE 4
2/n
Sometimes the simplest system is the best system.
Ideal buy point is when stock comes out of stage 1 & enters stage 2
Stage analysis works completely against the normal market participants
Psychology=Inverse(What needs to b done in the market)
Stages are determined wrto KMA
3/n
B.O. sud b accompanied wit vols
Establish position from stage 1 B.O and retest.
Look for stocks with no upward resistances
Bigger the stage 1 base the better
The sector is important: can dramatically improve returns
Check for 2 years of resistance.
TSLA, 2019(6 yrs base).
FAZE3: Real Round Cup & Base formation at the peak.
Outlook: AR2021
By Rule of 72:
At 18%, The Income wud double in 4 years.
The Income growth seems conservative.
Fundoos:
~Highest ever Quarterly revenues since inception.
~Topline & Bottomline Acceleration
~Seems to be a breakout in Earnings in the last 3 years.
~Being a small player seems to take the Margins hit.
Two things I have seen yesterday but not quantified yet.
1. Most of the NIFTY50 or biggies r below 50dma and looking to kiss 200dma.
But, the Index is hanging above 50dma for some strange reasons.
2.
Internally the stocks falling below 50dma in the whole universe has widened
There wud b tons of breakouts reversals to be seen.
Some choosy sectors/names would run.
Most good to great results r discounted specially in IT & PHARMA.Textiles stocks r giving fab results & the moves r discounting the earnings breakout above multi-year average.
Lastly, I am seeing vintage stocks or stocks with long bases which I have been tracking for long Breaking out now.
Case: TEJASNET
It has been in key list for way too long. Last 4-5 days r continuous circuits and cleared the trigger point convincingly.