Quit Talking, Start Doing- IBM  

Posted by Book Eater

Start young, think big and stick to it.

There ain't no reason why CNBC is topping ratings in its shows: “Fast Money” and “Kudlow and Co.” I'm one of their new fans. It’s coz the show has full of conviction and have full of “balls” to say their thoughts out loud. It can be right and it can be wrong. It doesn’t matter. At the end of the day, we lie a thousand times to each other and it becomes the truth. They deliver the markets with so much passion, so much energy and so much excitement; it gets viewers to act either in the stock market or in currencies, or at least in their thoughts on making their own opinions and staking a thing out of it. I especially love it when they’re debating. It’s fun to watch plus it’s the only show I know where making money is so much fun. You just voice out your vote and boom! Or doom!
I go to write the importance of doing, instead of knowing because we always like to talk. Talk is cheap. We don’t lose anything when we say “Hey, I wanted to short oil, or I wanted to short EUR when it was breaking 200 day MA.” The question is.. did we? Eventually, its what we do, not what we know. Or it is what we induce others to do. .. that makes us richer or poorer. I say this because I recently read this book by Napoleon Hill entitled “Think and Grow Rich.” It’s an old 1954 book but wisdom doesn’t really age. Talk, while cheap, can give confidence to people who already wanted to do something themselves,(say short EUR or the commodity currencies such as NZD and AUD against the USD). Confirmation of strategy with our peers helps induce us to either “bet more aggressively” on our conviction trades and die with it when it goes wrong. This also happens inversely. When the market is not acting right and giving us volatility moves intraday or the next single day, we get scared. Our cushion is gone and we could be taken out. When we’re not earning money and we’re still holding our positions, we’re being contrarians for the primary reason of not cutting our losses yet. That’s why at some point, we have to use technical levels such as our support and resistance plans so that we stick to our plans before leaving the “battle”. Volatilities will be sharp in bear markets, and although our position is correct, our plays can be wrong. My idol Jesse Livermore used to say that to me through his books. “My position was right, but my play was wrong.” We can sometimes be shaken out of our positions and if we don’t follow our trading plans to cut at a certain level, to take profits at a certain level, the more we trade, the more we get frustrated.

Trading is fun. It is lively and highly stimulating. It’s also frustrating and stressful. But as long as your core intention is to keep score, be on top, the money will just flow assuming you have the discipline to follow good risk management. It’s just harder when volatilities can kill you with your position sizes or the magnitude of the surprise gaps.

People in the markets each have their own beliefs. Their votes are essentially the money they’re putting in their buy and sell orders. Your money is your vote. Your talk is unimportant. Quit talking, start protecting, start doing. That’s the IBM commercial and I am happy that the market doesn’t pay talk. Market only pays to those who have balls to make their stakes.

US market rallied due to the sharp strengthening of USD against all other currencies as well as the continued downtrend in oil. This shows this market still has legs to go up. All this talk about humdrums in China and Hong Kong post Olympics (which I personally don’t believe from the reasons they give in their articles) but that I wouldn’t contest if that’s the reason why market is going down. The most important thing is to be in the game and to live to fight (trade) another day. You cannot be right unless you have a position on and position size is key to that end. We will just get vindication on Monday and the coming weeks ahead.

My talk is that I don’t know the right timing of the short term bottom where I won’t be shaken out off my position but I am going to do position trading for an inevitable rally long term on China. It will be too lengthy to elaborate which stocks in China plus I’m not sure if people will listen to me anyway. Perhaps the easy investment program of doing peso cost averaging is the most hassle free and yet most rewarding as well that I shall submit to doing after the short term rally has finished.

- Nix

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